TaxTMI 
TaxTMI 
2025 (2) TMI 1116
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....gs Limited", hereinafter referred as "Corporate Debtor" or as "Respondent"), wherein the Ld. NCLT nullified the outstanding dues payable to the Appellant for the period prior to initiation of Corporate Insolvency Resolution Process (hereinafter referred as "CIRP"). 2. The brief facts of this case as recorded in the order of Ld. NCLT are as under: i. The CIRP was initiated against the Corporate Debtor vide order dated 23.08.2018. The resolution plan was approved on 12.01.2021. The management and control of the company was transferred to Successful Resolution Applicant (hereinafter referred as "SRA") and the name of the company was changed. The SRA approached the Appellant to restore the electricity connection. However, the Appellant stated that an amount of Rs. 3,87,96,889/- is outstanding on account of non-payment of electricity dues by the Corporate Debtor. The SRA subsequent to approval of the resolution plan had already made payment to the Operational Creditors whose claims were admitted by the Resolution Professional. ii) In the impugned order in IA No. 164/2021 filed by SRA, the Ld. NCLT held that the resolution plan is already approved by the Adjudicating....
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....nnection was restored. The Corporate Debtor could not have invoked the jurisdiction of Ld. NCLT to examine transactions that have taken place between the parties post the approval of the resolution plan. vi. It was submitted that the issue relating to disconnection of electricity began on 04.12.2017, much prior to CIRP proceedings and was within the exclusive jurisdiction of the Punjab State Electricity Regulatory Commission (hereinafter referred as "PSERC"). The waiver of pending dues is not within the power of the Ld. NCLT and reference was made to decision in the case of "Vikram Sanghvi v. Bank of Baroda and Ors., 2021 SSC OnLine NCLT 298, paras 18, 20, 21". vii. It was submitted that the Corporate Debtor cannot seek refund on the basis of any subsequent order and is estopped from claiming the amount back. Reference in this connection was made to the judgment of Hon'ble Supreme Court in the case of "Paschimanchal Vidyut Vitran Nigam Limited and Ors. v. DVS Steels and Alloys Private Limited and Ors., (2009) 1 SCC 210, para 17". viii. It was submitted that non-consideration of claims existing in the books of accounts of the Corporate Debtor, in absence o....
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....der dated 07.07.2023 stating that the Appellant had failed to file its claim for pre-CIRP dues before Resolution Professional. It was submitted that the Appellant was aware of the CIRP and had not filed the claim in prescribed form. iv. It was submitted that there was no dispute that the amount of Rs. 3,87,96,889/- relates to dues of the pre-CIRP period. v. It was submitted that once the plan has been approved, all pre-CIRP expenses/debt got extinguished. The Respondent has already made payment to stakeholders in accordance with the resolution plan. As per Sub-section (1) of Section 31 of the IBC, 2016, an approved resolution plan is binding on all the stakeholders. The judgments in the case of "Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited, (2021 9 SCC 657" and in the case of "M/s Ruchi Soya Industries Limited v. Union of India and Ors." were cited in respect of the arguments that the dues of the pre-CIRP get extinguished on approval of the resolution plan. vi. It was submitted that as per Section 238 of the IBC, 2016, the provisions of the IBC prevail over any other law and the provisions of IBC shall preva....
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....standing anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of- (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and (c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code." 7. (iii) The plain reading of the above provisions of Section 60(5)(c) clearly indicates that the NCLT is empowered to adjudicate any question of priorities or any question of law or facts arising out of or in relation to the insolvency resolution of the Corporate Debtor. The Hon'ble Supreme Court in the case of Gujarat Urja Vikas Nigam Limited vs. Amit Gupta & Company & Ors., (2021) 7 SCC 209 has stated as under : "69. The institutional framework under IBC contemplated the establishment of a single forum to deal with matter....
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....on can be challenged before the appellate authority under Section 61, and may further be challenged before the Supreme Court under Section 62, if there is a question of law arising out of such order, within the time specified in Section 62. Section 64 also makes it clear that the timelines that are to be adhered to by the NCLT and NCLAT are of great importance, and that reasons must be recorded by either the NCLT or NCLAT if the matter is not disposed of within the time-limit specified. Section 60(5), when it speaks of the NCLT having jurisdiction to entertain or dispose of any application or proceeding by or against the corporate debtor or corporate person, does not invest the NCLT with the jurisdiction to interfere at an applicant's behest at a stage before the quasi-judicial determination made by the adjudicating authority. The non obstante clause in Section 60(5) is designed for a different purpose: to ensure that the NCLT alone has jurisdiction when it comes to applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings." 7. (v) The Hon....
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....y Coorporation Vs. Mackeil Ispat & Forging Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 1663 of 2023 dated 06.02.2025. We hold that NCLT has jurisdiction to decide the issue relating to pre-CIRP outstanding electricity dues. 8. (i) On the second issue, whether the disputes relating to supply of electricity and arrears of electricity dues can be adjudicated only under the Electricity Act, 2003, or can be adjudicated under the IBC, 2016, when the issue relates to resolution of insolvency of the Corporate Debtor, it will be relevant here to refer to Section 238 of IBC, 2016 which reads as under: "Section 238 : Provisions of this Code to override other laws. The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law." 8. (ii) This Tribunal in the case of Madhya Gujarat Vij Company Ltd. v. Kalptaru Alloys Pvt. Ltd., (2018) SCC NCLAT 550 decided on September 24, 2018 has held that in view of Section 238 of the IBC, 2016, the provisions of Gujarat Electricity Regulatory Commission (Electricity Supply Code and rela....
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.... the appellant in its turn is required to restore the electricity connection of the 'Corporate Debtor'. We find no merit in this appeal. It is accordingly dismissed. No cost." ( Emphasis Supplied ) 8. (iii) The Hon'ble Supreme Court in the case of Paschimanchal Vidyut Vitran Nigam Ltd. v. Raman Ispat Private Limited & Ors. in Civil Appel Nos. 7976 of 2019 has held that the provisions of IBC, 2016 override the provisions of the Electricity Act, 2003. The relevant portion of the judgment is reproduced below: "52. The views expressed by the present judgment finds support in the decision reported as Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs. In that case, Section 142A of the Customs Act 1962 was in issue - authorities had submitted that dues payable to it were to be treated as 'first charge' on the property of the assessee concerned. In the resolution process, it was argued that the Customs Act, 1962 acquired primacy and had to be given effect to. This court, after noticing the overriding effect of Section 238 of the IBC, held as follows: "55. For the sake of clarity following questions, may....
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....ivate Limited]." ( Emphasis Supplied ) 8. (iv) On the issue whether PSERC has exclusive jurisdiction over the Electricity dues, being statutory in nature under Electricity Act, we would also like to refer to the judgment of Meghalaya High Court in Reliance Infratel Ltd. and Anr. v. State of Meghalaya and Ors [WP(C) No. 238 of 2023] wherein the Court has affirmed the overriding nature of IBC Code, 2016 over the Electricity Act, 2003 and has held that IBC would prevail over Electricity Act. The relevant part of the judgment is reproduced below : "15. In this backdrop, what unfolded thereafter, was on the application of the petitioner No. 1, for a permanent power connection before the respondent No. 2, the same was declined vide letter dated 29.03.2023, on account of pending dues of the petitioner No. 1, i.e. formally Reliance Telecom, and the petitioner was called upon to clear all dues in order to acquire any new connection. At this juncture, it would be useful to refer to Section 238 of the I&B Code, which provides that this Code shall override other laws. The same is reproduced hereinbelow:- "238. Provisions of this Code to override other laws.- The p....
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....or other sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but no longer: Provided that the supply of electricity shall not be cut off if such person deposits, under protest,- (a) an amount equal to the sum claimed from him, or (b) the electricity charges due from him for each month calculated on the basis of average charge for electricity paid by him during the preceding six months, whichever is less, pending disposal of any dispute between him and the licensee. (2) Notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this section shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrear of charges for electricity supplied and the licensee shall not cut off the supply of the electricity." As such, the dues not attributable to the petitioner No. 1 after the effective date, and no claim having been made against the Corporate Debtor, and further Section 238 having an overriding effect on all other laws, the stand of the ....