Pre-CIRP electricity dues cannot block a fresh connection for an auction purchaser under insolvency law.

Pre-CIRP electricity dues cannot be insisted upon as a condition for granting a fresh electricity connection to a successful auction purchaser, because such liabilities are to be dealt with in the insolvency process under the Insolvency and Bankruptcy Code. The Tribunal noted that the licensee had not filed its claim in time, the relevant assets had already been exhausted, and inconsistent electricity supply requirements could not override the insolvency regime. The result was that the demand for pre-CIRP dues was impermissible, and the purchaser was entitled to a new connection on payment of only the lawful dues applicable to a fresh connection.

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Issues: Whether pre-CIRP electricity dues could be insisted upon as a condition for grant of a fresh electricity connection to the auction purchaser, and whether the impugned order holding the purchaser liable for those dues was liable to be set aside.

Analysis: The dispute turned on the interaction between the insolvency regime and the electricity supply regulations. The Tribunal noted that the corporate debtor's relevant documents showing change of name were available with the department, the department had not filed its claim in time, and the available assets had already been exhausted, leaving no meaningful recovery under the waterfall mechanism. It further relied on the settled position that the Insolvency and Bankruptcy Code has overriding effect over inconsistent electricity supply requirements, and that pre-CIRP liabilities cannot be foisted on the successful purchaser as a precondition for restoring or granting electricity supply.

Conclusion: The demand for payment of pre-CIRP electricity dues as a condition for a new connection was impermissible, and the impugned order was set aside. The respondents were directed to give the new connection on payment of only the lawful dues applicable for a fresh connection, without insisting on pre-CIRP dues.

Ratio Decidendi: Where an electricity claim relates to the pre-CIRP period, the distribution licensee cannot insist upon payment of those dues for grant or restoration of supply to a successful auction purchaser, because the Insolvency and Bankruptcy Code prevails and such liabilities must be dealt with in the insolvency process.

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