Approved Resolution Plan Overrides Past Electricity Dues, While Security Deposit Remains Required for Supply Restoration

Security deposit was treated as a valid pre-condition for restoration of a high-tension electricity connection, and supply could not be restored without compliance where the requirement secured payment of dues. An approved resolution plan under the Insolvency and Bankruptcy Code extinguished past claims, and inconsistent electricity supply regulations could not be enforced to demand pre-approval arrears. The distribution licensee's claim for past dues after approval was therefore not maintainable, while the security deposit requirement remained enforceable unless lawfully waived.

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Issues: (i) Whether electricity connection could be restored without insisting on security deposit. (ii) Whether the electricity distribution company could insist on payment of past dues after approval of the resolution plan.

Issue (i): Whether electricity connection could be restored without insisting on security deposit.

Analysis: Security deposit was treated as a pre-condition for sanction of a high-tension power connection. The requirement was linked to securing payment of electricity dues and could not be dispensed with for restoration of supply to a heavy industry requiring substantial power.

Conclusion: The issue was decided against the appellant and restoration without security deposit was not permitted.

Issue (ii): Whether the electricity distribution company could insist on payment of past dues after approval of the resolution plan.

Analysis: Once the resolution plan was approved, past claims stood extinguished. The Insolvency and Bankruptcy Code had overriding effect under Section 238, and inconsistent electricity supply regulations could not be enforced so as to defeat the approved resolution plan. The claim raised after approval was therefore not maintainable.

Conclusion: The issue was decided in favour of the respondent and insistence on past dues was not permitted.

Final Conclusion: Both appeals failed. The order partly allowing relief on past dues and refusing restoration without security deposit was sustained in substance, and the applications stood finally concluded.

Ratio Decidendi: An approved resolution plan prevails over inconsistent statutory or regulatory claims by virtue of the Insolvency and Bankruptcy Code's overriding effect, and a distribution licensee cannot insist on extinguished past dues to defeat implementation of the plan; security deposit requirements for supply restoration remain enforceable unless lawfully waived.

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