Approved resolution plan extinguishes pre-insolvency electricity dues and bars inconsistent recovery against the successful applicant.

An approved resolution plan binds all creditors, including statutory authorities, and claims not included in the plan stand extinguished, leaving the successful resolution applicant entitled to a clean slate. Pre-effective-date electricity dues could not be pursued against the applicant or used to deny a new connection when the authority had notice of the insolvency process but failed to file a claim. The Insolvency and Bankruptcy Code overrides inconsistent recovery mechanisms under other laws. The writ petition was also treated as maintainable because the dispute concerned the legal effect of the approved plan and coercive action contrary to it, rather than a mere alternative-remedy objection.

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Issues: (i) Whether electricity dues allegedly arising prior to the effective date of takeover could be recovered from the successful resolution applicant and its affiliates after approval of the resolution plan; (ii) Whether the writ petition was not maintainable on the ground of alternative remedy and disputed questions of fact.

Issue (i): Whether electricity dues allegedly arising prior to the effective date of takeover could be recovered from the successful resolution applicant and its affiliates after approval of the resolution plan.

Analysis: An approved resolution plan is binding on all creditors, including governmental and statutory authorities, under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. Once the plan is approved, claims not forming part of the plan stand extinguished, and the successful resolution applicant is entitled to proceed on a clean slate. The respondent electricity authority had been notified of the corporate insolvency process and invited to submit claims, but no claim was filed. The attempt to recover pre-effective-date dues and to make supply contingent upon their payment was inconsistent with the approved resolution plan. Section 238 of the Insolvency and Bankruptcy Code, 2016 gives the Code overriding effect over inconsistent laws, and Section 56 of the Electricity Act, 2003 did not apply to dues that had already stood extinguished under the resolution framework.

Conclusion: The pre-effective-date electricity dues could not be recovered from the petitioner, and the demand and refusal of new electricity connection on that basis were unsustainable.

Issue (ii): Whether the writ petition was not maintainable on the ground of alternative remedy and disputed questions of fact.

Analysis: The relief sought was enforcement of rights flowing from the approved resolution plan against coercive action taken contrary to Section 31(1) of the Insolvency and Bankruptcy Code, 2016. In those circumstances, the existence of an alternative remedy under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 did not bar writ jurisdiction. The objections based on disputed facts were insufficient to defeat maintainability, since the core controversy turned on the legal effect of the approved resolution plan and the creditor's failure to file claims.

Conclusion: The writ petition was maintainable.

Final Conclusion: The demand notice and consequential refusal of electricity connection, insofar as they rested on pre-takeover dues, were set aside, and the writ petition succeeded.

Ratio Decidendi: Once a resolution plan is duly approved under the Insolvency and Bankruptcy Code, 2016, all claims not forming part of the plan stand extinguished and are binding on all creditors, including statutory authorities, so pre-resolution dues cannot be enforced against the successful resolution applicant by invoking inconsistent statutory remedies.

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