Insolvency forum lacks jurisdiction over electricity security deposit interest claims with no direct nexus to liquidation proceedings.

A claim for interest on an electricity security deposit was held not maintainable before the insolvency adjudicating forum where it arose from electricity regulations and had no direct nexus with the insolvency or liquidation process. The earlier insolvency-related reliefs covered restoration of electricity supply and continuance of the security deposit, but did not grant interest, and the prior order had left entitlement open for remedies in accordance with law. Regulation 4.11 of the Gujarat Electricity Regulatory Commission (Security Deposit) Regulations, 2005 was found not to assist the auction purchaser on the facts. The claim was therefore left to the appropriate electricity forum or civil court, and rejection of the application under Section 60(5) of the IBC was upheld.

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Issues: Whether the claim for interest on the electricity security deposit was maintainable before the Adjudicating Authority or could be pursued under the insolvency proceedings and the reliefs earlier granted.

Analysis: The reliefs earlier granted related to restoration of electricity supply and continuance of the security deposit, and did not include any direction for payment of interest on the deposit. The later claim for interest arose from electricity regulations and not from the liquidation process or from any breach of the earlier insolvency-related order. The prior order of the Tribunal also did not decide the merits of entitlement and left the parties to seek remedies in accordance with law. Regulation 4.11 of the Gujarat Electricity Regulatory Commission (Security Deposit) Regulations, 2005 was held not to assist the successful auction purchaser in the facts of the case, and the grievance was treated as one for the appropriate electricity forum or civil court.

Conclusion: The application for interest on the security deposit was not entertainable under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, and the rejection of the claim was upheld.

Ratio Decidendi: A claim for interest on an electricity security deposit, when it has no direct nexus with the insolvency or liquidation process and is founded on electricity regulations, is not maintainable before the insolvency adjudicating forum under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.

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