TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>NCLAT rules resolution applicant not liable for pre-CIRP electricity dues under Section 60(5) IBC</h1> <h3>Punjab State Power Corporation Limited Versus Akums Lifesciences Limited (Formerly known as Parabolic Drugs Limited)</h3> Punjab State Power Corporation Limited Versus Akums Lifesciences Limited (Formerly known as Parabolic Drugs Limited) - TMI ISSUES PRESENTED and CONSIDEREDThe core issues considered in this judgment were:a) Whether the National Company Law Tribunal (NCLT) has jurisdiction to decide issues after the approval of the resolution plan.b) Whether disputes regarding the demand for payment of arrears relating to the Corporate Debtor by the Successful Resolution Applicant (SRA), after the approval of the resolution plan, can be dealt only under the Electricity Act, 2003, and the Rules made therein, and cannot be adjudicated under the Insolvency and Bankruptcy Code (IBC), 2016.c) Whether the SRA is liable to pay the arrears of electricity dues for the pre-Corporate Insolvency Resolution Process (CIRP) period of the Corporate Debtor, even though no claim is filed by the electricity company in CIRP and no such provision is made in the resolution plan.ISSUE-WISE DETAILED ANALYSISJurisdiction of NCLT Post-Approval of Resolution PlanThe relevant legal framework is Section 60(5) of the IBC, 2016, which grants NCLT jurisdiction over matters relating to the insolvency resolution of the Corporate Debtor. The Tribunal interpreted this to mean that NCLT has the authority to adjudicate disputes arising from or relating to the insolvency of the Corporate Debtor. The Supreme Court's decisions in Gujarat Urja Vikas Nigam Limited vs. Amit Gupta & Company & Ors. and Arcelormittal India Pvt. Ltd. v. Satish Kumar Gupta & Ors. were cited to support the view that NCLT holds exclusive jurisdiction over such matters. The Court concluded that NCLT has jurisdiction to decide issues related to pre-CIRP outstanding electricity dues.Adjudication Under IBC vs. Electricity ActThe Tribunal examined Section 238 of the IBC, 2016, which provides that the provisions of the IBC override other laws. This was supported by precedents such as Paschimanchal Vidyut Vitran Nigam Ltd. v. Raman Ispat Private Limited & Ors. and Madhya Gujarat Vij Company Ltd. v. Kalptaru Alloys Pvt. Ltd., which affirmed the supremacy of the IBC over the Electricity Act, 2003. The Tribunal held that disputes relating to the resolution of insolvency of the Corporate Debtor, including payment of pre-CIRP electricity dues, fall under the jurisdiction of the IBC and can be adjudicated by the NCLT.Liability of SRA for Pre-CIRP Electricity DuesThe Tribunal found that the SRA, having taken over the Corporate Debtor, is not liable for pre-CIRP electricity dues as these were not included in the resolution plan, and no claim was filed by the electricity company during the CIRP. The Supreme Court's rulings in Tata Power Western Odisha Distribution Ltd. & Anr. Vs. Jagannath Sponage Pvt. Ltd. and Southern Power Distribution Company of Andhra Pradesh Ltd. vs. Gavi Siddeswara Steels (India) Pvt. Ltd. and Another were referenced, which held that power distribution companies cannot insist on payment of arrears for restoring electricity connections. The Tribunal concluded that the SRA cannot be held liable for pre-CIRP dues, which were extinguished upon approval of the resolution plan.SIGNIFICANT HOLDINGSThe Tribunal preserved key legal reasoning, emphasizing that:- NCLT has jurisdiction to adjudicate disputes arising from insolvency resolutions, as per Section 60(5) of the IBC.- The provisions of the IBC, 2016 override those of the Electricity Act, 2003, as per Section 238 of the IBC.- Once a resolution plan is approved, it is binding on all stakeholders, extinguishing pre-CIRP dues unless claims are filed during the CIRP.The final determination was that the appeal was dismissed, and the impugned order nullifying outstanding electricity dues for the pre-CIRP period was upheld. The Tribunal found no merit in the appeal and ruled that the SRA was not liable for the pre-CIRP electricity dues.
TaxTMI 