IBC override on pre-CIRP electricity dues bars independent recovery after resolution plan approval

Pre-CIRP electricity dues could not be enforced independently after approval of the resolution plan, because the Insolvency and Bankruptcy Code, 2016 prevailed over inconsistent electricity supply regulations under Section 238. The approved resolution plan governed the treatment of claims in CIRP, and the requirement to clear outstanding dues for a new connection could not override that statutory scheme. The Tribunal therefore treated the electricity regulations as inapplicable to defeat the plan, and rejected the demand for separate recovery of pre-CIRP dues.

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Issues: Whether pre-CIRP electricity dues could be insisted upon or treated as surviving claims after approval of the resolution plan in insolvency resolution proceedings, notwithstanding the electricity supply regulations.

Analysis: The Tribunal held that the resolution plan had to be tested under the Insolvency and Bankruptcy Code, 2016, and that the Code has overriding effect over inconsistent laws by virtue of Section 238. It relied on the principle that a resolution plan once approved in CIRP governs the treatment of claims, and that statutory electricity supply regulations cannot be enforced in a manner that would defeat the Code. The reliance on the electricity regulations requiring clearance of outstanding dues for a new connection was found inapplicable in the face of the approved plan and the overriding statutory scheme. The earlier decisions cited were treated as supporting the same position that electricity dues are to be dealt with within the insolvency framework.

Conclusion: The demand to enforce pre-CIRP electricity dues independently of the approved resolution plan was rejected, and the appeal failed.

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