Electricity tariff dues and insolvency resolution: statutory charges payable on billing were not wiped out by the resolution plan.

Electricity-related fuel surcharge and special fuel surcharge were treated as statutory dues under the tariff framework, with liability arising on issuance of bills rather than merely on prior consumption or regulatory quantification. On that basis, the approved resolution plan under the Insolvency and Bankruptcy Code did not extinguish the disputed charges as pre-insolvency claims, and recovery remained permissible under the billing cycle and tariff orders. The Insolvency and Bankruptcy Code was also held not to displace the Electricity Act in the absence of a real inconsistency, so the two statutes were capable of harmonious construction and the regulatory recovery mechanism continued to apply.

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Issues: (i) Whether fuel surcharge and special fuel surcharge were pre-insolvency liabilities extinguished on approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016. (ii) Whether the Electricity Act, 2003 and the Insolvency and Bankruptcy Code, 2016 are in conflict in relation to recovery of the disputed charges, or can be harmoniously construed.

Issue (i): Whether fuel surcharge and special fuel surcharge were pre-insolvency liabilities extinguished on approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016.

Analysis: The dispute turned on whether the impugned charges had already become due before commencement of the insolvency process or whether they arose only when bills were raised by the distribution company. The Tribunal treated the charges as statutory dues governed by the tariff framework under the Electricity Act, 2003 and held that, in the facts of the case, liability to pay arose only upon issuance of bills. It relied on the principle that electricity charges become due when billed, and not merely on prior consumption or prior regulatory quantification. Since the bills for the disputed amounts were not treated as existing dues incapable of future billing, the clean slate principle under the approved resolution plan did not wipe them out.

Conclusion: The charges were not held to be extinguished pre-insolvency claims, and recovery was held permissible in accordance with the billing cycle and tariff orders.

Issue (ii): Whether the Electricity Act, 2003 and the Insolvency and Bankruptcy Code, 2016 are in conflict in relation to recovery of the disputed charges, or can be harmoniously construed.

Analysis: The Tribunal found no direct inconsistency between the two statutes on the facts presented. It held that the overriding clause in the Insolvency and Bankruptcy Code operates only where there is a real conflict, and that a mere invocation of overriding effect is insufficient without identifying a specific inconsistent provision in the Electricity Act. The Tribunal further held that the regulatory framework requiring recovery through bills and instalments had to be given effect, and that the disputed dues, being statutory in nature, fell to be recovered under that framework.

Conclusion: The statutes were held to be capable of harmonious construction, and the argument of overriding conflict was rejected.

Final Conclusion: The appeal failed on both issues, and the impugned order directing payment of the disputed electricity dues was sustained.

Ratio Decidendi: Where electricity-related statutory charges arise under a regulatory tariff regime and become payable only upon billing, they are not automatically extinguished by approval of a resolution plan unless they were crystallised and subsumed in the insolvency resolution process, and the Insolvency and Bankruptcy Code overrides the Electricity Act only in the presence of an actual inconsistency.

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