TaxTMI 
TaxTMI 
2025 (6) TMI 1602
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..... Dhanlaxmi Solvex Private Limited was having an industrial unit in Dewas, Madhya Pradesh and had borrowed loans from banks and financial institutions. Due to default committed by it one of the financial creditors, Dena Bank, initiated Corporate Insolvency Resolution Process (CIRP) under Section 7 of Insolvency and Bankruptcy Code, 2016, (IBC'16) against the company before National Company Law Tribunal, Indore, Bench at Ahmedabad. By order dated 02.04.2019, the NCLT allowed the application and initiated CIRP appointing one Shikhar Chand Jain an Insolvency Professional as Interim Resolution Professional. The CIRP could not be implemented and was declared failed. Thereafter, by order dated 27.02.2020, the NCLT ordered for liquidation of M/s. Dhanlaxmi Solvex Private Limited under Section 33(1) and 33(2) of IBC 16. A liquidator was appointed under Section 34(1) to initiate and implement liquidation process. 3. The liquidator issued notice for sale of liquidation estate under Section 36 of the IBC16. The petitioner participated in e-auction and was declared successful auction purchaser by the liquidator for a sum of Rs. 10,49,40,000/-. The liquidator issued letter of intent on 1....
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....imited and another, (2013) 10 SCC 60 and Southern Power Distribution Company Of Andhra Pradesh Limited Ltd. v. Gavi Siddeshwara Steels (India) Pvt. Ltd. and another, Civil Appeal No. 5716-5717 of 2023 decided on 06.09.2023. 6. Reply has been filed by the respondents and the learned counsel for the respondents has submitted that under Section 49/50 of the Electricity Act, 2003 the respondents are entitled for recovery of electricity arrears of the previous owner from the petitioner. The condition requiring new owner of the premises to clear electricity arrears of previous owner as a precondition to availing electricity supply has a statutory character. Since there are statutory rules, the respondents can certainly demand from the petitioner the arrears of electricity dues of the previous owner. Reliance in this regard has been placed on the decision of the Apex Court in Isha Marbles v. Bihar SEB and another, (1995) 2 SCC 648, Ahmedabad Electricity Co. Ltd. v. Gujarat Inns (P) Ltd. and others, (2004) 3 SCC 587, Paschimanchal Vidyut Vitran Nigam Ltd. and others v. DVS Steels and Alloys (P) Ltd. and others, (2009) 1 SCC 210, Dakshin Haryana Bijli Vitran Nigam Ltd. v. Paramount Polym....
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....The debt due has to be paid in terms of Section 53 of the Code. 10. The issue as raised in this petition as to whether in view of IBC 16 the petitioner would be liable to pay the outstanding arrears of electricity dues of the earlier owner, namely, M/s. Dhanlakshmi Solvex Pvt. Ltd. has already been answered in Paschimanchal Vidyut Vitran Nigam Ltd. v. Rarman Ispat Private Limited and another (supra) in which it has been held as under : 25. Upon initiation of liquidation, a liquidator has to be appointed, to carry out the liquidation process and manage other affairs of the corporate debtor. The RP, appointed to conduct the resolution process, is ordinarily appointed as liquidator. The powers and duties of liquidator are prescribed by Section 35. ["35. Powers and duties of liquidator.-(1) Subject to the directions of the adjudicating authority, the liquidator shall have the following powers and duties, namely: (a) to verify claims of all the creditors; (b) to take into his custody or control all the assets, property, effects and actionable claims of the corporate debtor; *** (d) to take such measures to protect and preserve the....
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....e time being in force, the proceeds from the sale of the liquidation assets shall be distributed in the following order of priority and within such period and in such manner as may be specified, namely: (a) the insolvency resolution process costs and the liquidation costs paid in full; (b) the following debts which shall rank equally between and among the following- (i) workmen's dues for the period of twenty-four months preceding the liquidation commencement date; and (ii) debts owed to a secured creditor in the event such secured creditor has relinquished security in the manner set out in Section 52; (c) wages and any unpaid dues owed to employees other than workmen for the period of twelve months preceding the liquidation commencement date; (d) financial debts owed to unsecured creditors; (e) the following dues shall rank equally between and among the following: (i) any amount due to the Central Government and the State Government including the amount to be received on account of the Consolidated Fund of India and the Consolidated Fund of a State, if any, in respect of the whole or any part of the period....
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.... the agreement read as follows: "This agreement shall be governed by the Electricity Act, 2003 with all its amendments, various other laws of India for the time being in force, but not limited to various regulations of UPERC, as applicable to the State of U.P. and shall be subject to the jurisdiction of the Court subordinate to the High Court of Judicature at Allahabad."] also mentioned that the parties would be governed by the 2003 Act. 46. A recent ruling of this Court in K.C. Ninan v. Kerala SEB [K.C. Ninan v. Kerala SEB, (2023) 14 SCC 431 : 2023 SCC OnLine SC 663] examined the circumstances in which such a "charge" could be constituted in law, and held as follows : (SCC para 107) "107. Consequently, in general law, a transferee of the premises cannot be made liable for the outstanding dues of the previous owner since electricity arrears do not automatically become a charge over the premises. Such an action is permissible only where the statutory conditions of supply authorise the recovery of outstanding electricity dues from a subsequent purchaser claiming fresh connection of electricity, or if there is an express provision of law providing for creati....
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...., as well as its Preamble, means that these dues are distinct and have to be treated as separate from those owed to secured creditors. 56. The views expressed by the present judgment finds support in the decision reported as ABG Shipyard Liquidator v. Central Board of Indirect Taxes & Customs [ABG Shipyard Liquidator v. Central Board of Indirect Taxes & Customs, (2023) 1 SCC 472 : (2023) 1 SCC (Civ) 251]. In that case, Section 142-A 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 IBC, held as follows : (SCC p. 496, paras 56-57) "56. For the sake of clarity following questions, may be answered as under: (a) Whether the provisions of IBC would prevail over the Customs Act, and if so, to what extent? 56.1. IBC would prevail over the Customs Act, to the extent that once moratorium is imposed in terms of Sections 14 or 33(5) IBC as the case may be, the re....
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.... [CIT v. Monnet Ispat & Energy Ltd., (2018) 18 SCC 786 : (2019) 3 SCC (Civ) 252], Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638], and Jagmohan Bajaj v. Shivam Fragrances (P) Ltd. [Jagmohan Bajaj v. Shivam Fragrances (P) Ltd., 2018 SCC OnLine NCLAT 413]]. 58. In view of the above discussion, it is held that the reliance on Rainbow Papers [STO v. Rainbow Papers Ltd., (2023) 9 SCC 545] is of no avail to the appellant. In this Court's view, that judgment has to be confined to the facts of that case alone. 11. In view of the authoritative pronouncement of the Apex Court as aforesaid, the respondents cannot insist on payment of arrears which have to be paid in terms of the waterfall mechanism for grant of an electricity connection. The remedy of respondents is under Section 53 of the IBC 16. Its dues have to be paid in the manner prescribed in the Resolution Plan as approved by the adjudicating authority. The demand made by it from the petitioner for payment of outstanding dues of the previous owner was hence wholly unjust....