TaxTMI 
TaxTMI 
2022 (9) TMI 143
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....the Appellant herein). 2. The Adjudicating Authority by the impugned order directed the Respondent not to take over the Distribution Franchisee Agreement (DFA) and to continue to supply uninterrupted electricity to the Corporate Debtor and the Resolution Professional was directed to pay the outstanding dues during the CIRP period within 90 days. Aggrieved by the order insofar as it directed the Resolution Professional to pay the outstanding dues during the CIRP period, the Resolution Professional has come up in this Appeal. 3. The brief facts of the case necessary for deciding this Appeal are: (i) The Corporate Debtor Lavasa Corporation Limited entered into Distribution Franchisee Agreement ("DFA") with Maharashtra State electricity Distribution Company Limited (hereinafter referred to as "MSEDCL") on 15.03.2011, under which, the MSEDCL was to supply electricity at certain injection points from where the electricity was to further supplied to consumers in the township through distribution infrastructure of the Corporate Debtor. (ii) The DFA expired on 24.10.2019. The MSEDCL informed by letter dated 09.07.2021 about its intention not to renew the DFA and that....
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....djudicating Authority in paragraph 20: "20. In view of the above, this Bench is of the considered view that the Applicant is directed to pay the outstanding dues to the Respondent during the CIRP period within 90 days from the date of pronouncement of the order and also the Respondent to supply uninterrupted connection of electricity to the Corporate Debtor to keep the Corporate Debtor as a going concern and not to takeover the Distribution Franchisee Agreement." (vii) The Resolution Professional aggrieved by only part of direction by which Resolution Professional was directed to pay outstanding dues to the Respondent during the CIRP period within 90 days has come up in this Appeal. 4. The learned Counsel for the Appellant challenging the above direction of the Adjudicating Authority directing for payment of electricity dues during the CIRP period has submitted that the Corporate Debtor lacks necessary funds to make complete payment to the Respondent and it has been making payment on monthly basis to the extent possible. It is submitted that Resolution Plan has already been approved by the Committee of Creditors ("CoC") and is pending consideration before the A....
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.... the submission of the parties and have perused the record. 7. The only question is to be considered in this Appeal is as to whether the Adjudicating Authority was right in issuing direction to the Appellant to make payment of outstanding electricity dues during CIRP period within 90 days. The CIRP against Corporate Debtor has commenced on 30.08.2018 by order of the Adjudicating Authority and during the moratorium period the Respondent has continued to supply the electricity to the Corporate Debtor even though DFA came to an end on 24.10.2019, when Respondent issued notice to take over the Distribution Franchisee Agreement. Thereafter, the Resolution Professional filed the IA No.1661 of 2021 seeking the directions as noticed above. In the Application, which was filed by Resolution Professional, it was categorically pleaded that continuance of Franchisee Infrastructure is essential to maintain the value of the Corporate Debtor for the incoming Resolution Applicant. Consequently, the prayer was made by the Resolution Professional for direction to the Respondent to continue supplying electricity. The pleading in IA No.1661 of 2021 makes it clear that continuation of the electricity....
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.... Statement of Objects and Reasons. The Statement of Objects and Reasons as contained in the Insolvency and Bankruptcy Code, Second Edition 2021, are as follow: "Statement of Objects and Reasons The Insolvency and Bankruptcy Code, 2016 (the Code) was enacted with a view to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order or priority of payment of Government dues and to establish and Insolvency and Bankruptcy Board of India. 2. A need was felt to give the highest priority in repayment to last mile funding to corporate debtors to prevent insolvency, in case the company goes into corporate insolvency resolution process or liquidation, to prevent potential abuse of the Code by certain classes of financial creditors, to provide immunity against prosecution of the corporate debtor and action against the property of the corporate debtor and the successful resolution....