Critical supply during CIRP depends on payment of current dues; non-payment can justify lawful disconnection despite moratorium.

Electricity supply treated as a critical input during CIRP remains protected only if current dues are paid; the amended Section 14 scheme of the Insolvency and Bankruptcy Code, 2016 makes non-payment a valid ground for disconnection or other lawful coercive steps despite the moratorium. The Explanation to Section 14(1) preserves licences and similar benefits subject to payment of current dues, while Section 14(2-A) extends protection to essential supplies needed to keep the corporate debtor as a going concern but expressly excludes unpaid moratorium-period dues. The earlier view treating disconnection as barred by moratorium was said to be inconsistent with this statutory scheme.

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Issues: Whether electricity dues arising during the corporate insolvency resolution process had to be paid as current dues, and whether non-payment permitted disconnection of supply despite the moratorium.

Analysis: The dispute turned on the amended scheme of Section 14 of the Insolvency and Bankruptcy Code, 2016. The Explanation to Section 14(1) protects licences, concessions and similar benefits from suspension on the ground of insolvency, but only so long as current dues are paid. Section 14(2-A) further protects supplies that are critical to preserve the value of the corporate debtor and manage it as a going concern, but expressly carves out an exception where dues for such supply during the moratorium remain unpaid. The electricity supply in question was treated as a critical input for maintaining the corporate debtor as a going concern, and the unpaid charges were current dues arising during CIRP. The earlier view that disconnection proceedings were barred by moratorium was found inconsistent with the amended statutory scheme and the binding interpretation already adopted in the cited precedent.

Conclusion: The electricity dues were payable during CIRP, and non-payment justified coercive steps including disconnection in accordance with law; the impugned orders were unsustainable and were set aside.

Final Conclusion: The appeals were allowed, the protection against disconnection was withdrawn, and the respondent was directed to clear the outstanding electricity dues within the stipulated time, failing which lawful coercive action could follow.

Ratio Decidendi: Under Section 14(1) Explanation and Section 14(2-A) of the Insolvency and Bankruptcy Code, 2016, continuation of a critical supply during moratorium is conditioned on payment of current dues, and non-payment permits termination or coercive recovery in accordance with law.

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