TaxTMI 
TaxTMI 
2017 (12) TMI 1196
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....in CP (IB) No. 53 of 2017 admitted the Petition filed by ICICI Bank Ltd (Financial Creditor) in initiating CIRP in respect of the Corporate Debtor. This Adjudicating Authority appointed Mr. Sundaresh Bhat as 'Interim Resolution Professional ("IRP" for short) and thereafter the Committee of Creditors resolved to continue the IRP as 'Resolution Professional'. 2.2 It is the version of the Resolution Professional that he has received a disconnection notice bearing Reference No. Acctt/Rev/HT Disconn. Notice, dated 28.9.2017 from the Respondent No. 2 Electricity Company for non-payment of electric bill for the month of September 2017 wherein it is stated that the electric supply shall be disconnected if the outstanding amounts are not paid. It is the version of the Applicant Resolution Professional that as per Section 14(2) of the Insolvency and Bankruptcy Code, 2016 ["the Code" for short] the supply of essential goods or services to the Corporate Debtor as may be specified shall not be terminated or suspended or interrupted during the moratorium period. It is further stated that this Adjudicating Authority by order dated 1.8.2017 passed an order of moratorium under Section 13 of the ....
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....Distribution/Licensee to supply electricity, whereas Section 45 of the said Act gives power to recover the charges for supply of electricity. Section 56 of the Electricity Act gives power to the licensee to disconnect the power supply in case of failure of payment of electricity consumption charges. There is also a contract between the Electricity Company and the Corporate Debtor to pay the electricity consumption charges as determined by the Electricity Company and therefore there is also a contract which is enforceable. It is further stated that in case the Applicant did not pay the consumption charges there is likelihood of Electricity Company also becoming sick and it is not the object of the IB Code. It is further contended that the Hon'ble Supreme Court, in case of India Maize & Chemicals Ltd. v. State of U.P. [1997] 9 SCC 462 held that even a sick industrial company has to pay the charges for electricity consumed by it, otherwise its supply can be disconnected. Demand for payment of electricity charges cannot be considered as an execution of a decree. If the Applicant wants the electricity supply continuously then he has to pay the current bills raised by the Electricity Com....
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.... as may be specified shall not be terminated or suspended or interrupted during moratorium period." It is also necessary to reproduce Regulation 32 of the Regulations as follows; "Essential supplies 32. The essential goods and services referred to in section 14(2) shall mean - (1) electricity; (2) water; (3) telecommunication services; and (4) information technology services, to the extent these are not a direct input to the output produced or supplies by the corporate debtor. Illustration-Water supplied to a corporate debtor will be essential supplies for drinking and sanitation purposes, and not for generation of hydro-electricity." 7. In the case on hand, the 'electricity' is an essential good with reference to the Corporate Debtor. Section 14(2) clearly lays down that there shall not be termination, suspension or interruption of the supply of essential goods to the Corporate Debtor, i.e., ABG Shipyard Limited. 8. The contention of the learned Counsel for the Electricity Company is that there is nothing in Section 14(2) of the Code which says that Corporate Debtor is entitled for the supply of elect....
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....mpany is allowed to disconnect the electricity supply to M/s. ABG Shipyard Limited, Surat Unit, then there is no scope of managing the affairs of the Corporate Debtor as a going concern and it may also affect the Resolution Plan, if any, that is going to be filed and/or approved by the Committee of Creditors. On the ground of non-payment of electricity consumption charges, if electricity supply is interrupted, the business of the Corporate Debtor will come to a standstill. Likewise, if the authorities of a Municipal Corporation stop the water supply for drinking water purposes to the Corporate Debtor on the ground that water consumption charges are not paid, then also the Corporate Debtor shall not continue as a going concern. These aspects, if permitted, would make the purpose of Section 14(2) of the Code defeated in respect of essential goods and services. In the instant case, the Electricity Company by virtue of Section 45 of the Electricity Act, 2003, is claiming the charges due to it for the electricity supplied to it. The Electricity Company, exercising the powers under Section 56 of the Electricity Act, issued a notice of disconnection in case if the Applicant fails to pay t....
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....re that it had enacted the earlier Act and yet chose to enact the subsequent Act with a non obstante clause. In this case, however, the express intendment of Parliament in the non obstante clause of the RDDB Act does not permit us to take that view. Though the RDDB Act is the later enactment, sub-section (2) of Section 34 thereof specifically provides that the provisions of the Act or the Rules made thereunder shall be in addition to, and not in derogation of the other laws mentioned therein including SICA". That was a case where there was a repugnancy between Section 22 of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA); and Section 34(2) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB Act). In RDDB Act, overriding effect is given to the provisions under Section 34(1). Section 34(2) of the RDDB Act is an exception to the overriding effect wherein SICA is exempted from the overriding effect. Section 174 of the Electricity Act, 2003 reads as follows; "174. Act to have overriding effect, __ Save as otherwise provided in section 173, the provisions of this Act shall have effect notwithstanding anything inconsistent therew....
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....ompanies. That decision by the Hon'ble Apex Court is not applicable to the facts of the present case because the said decision does not deal with Section 238 of the IB Code. 11. The object of The Electricity Act, 2003 is to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalisation of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto. 12. The object of Insolvency and Bankruptcy Code, 2016 is to maximise the value of assets of Corporate Debtors and to revive the Corporate Debtors who are in default in payment of debts. The Electricity Act, 2003 deals with subject of electricity. The Insolvency and Bankruptcy Code, 2016 deals with Insolvency Resolution Process and Liquidation Process. Thou....