AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1008
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.... as Successful Auction Purchaser. Applicant filed an IA No.411 of 2021 seeking certain reliefs and concessions which was allowed on 04.10.2021. One of the reliefs and concessions granted was that all electricity charges accrued prior to liquidation commencement date shall stand permanently extinguished and any security deposit for connection shall continue in the name of Corporate Debtor. Respondent No.1 was directed to restore the electricity supply to the Corporate Debtor. An appeal was filed by the Respondent No.1 challenging the order dated 04.10.2021 being Company Appeal (AT) (Insolvency) No.1300 of 2022. When the Appeal came for hearing on 16.05.2023, Learned Counsel appearing for the Respondent No.1, who was the Appellant, made a statement that all dues with respect to the electricity connection of the Corporate Debtor has been collected and no further amount is due. It was also stated that the previous connection cannot be restored, hence, new connection in the name of the Corporate Debtor after compliance of necessary and legal formalities can be given. The Appeal was disposed of. After disposal of the Appeal, a fresh connection was granted to the Applicant No.1 and the se....
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....ws from the said order and the Adjudicating Authority committed error in taking the view that the Adjudicating Authority has no jurisdiction to adjudicate. It is further submitted that this Tribunal in order dated 18.12.2023 while deciding the application granted liberty to the applicants to approach the Adjudicating Authority to consider the claim of the Applicant for interest, hence, the Adjudicating Authority could not have refused to examine application on merits. 5. Learned Counsel appearing for the Respondents submits that after reliefs and concessions was granted on 04.10.2021 to the applicant, the Respondent No.1 had already initiated proceeding for recovery from erstwhile company who had taken electricity connection in which proceeding under the deposit made by the erstwhile company in the High Court the dues were satisfied, hence, in the Appeal which was filed by the Appellant challenging the order dated 04.10.2021, statement was made that dues of the Respondent No.1 has been satisfied. It is submitted that however, after the disposal of the Appeal, Appellant did not press for restoration of the connection rather insisted for taking a fresh connection and fresh connect....
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....follows:- "3. When the Appeal was taken today, Learned Counsel for the Appellant submits that Appellant has already recovered all dues on the electricity connection and there are no further dues to be recovered. He further submits that the electricity connection was disconnected permanently in 2017 and Appellant is ready to give fresh connection to the Successful Bidder provided that Application and/or Form are filled up. It is further submitted that security which was already deposited with the Appellant shall be continued in the name of the Corporate Debtor. It is further submitted that electricity shall be restored within six weeks if application/form is made within two weeks from today for the restoration of the electricity. 4. It is made clear that no financial charges shall be asked from the Corporate Debtor for giving fresh connection. 5. Learned Counsel for Respondent submits that there was some entitlement of interest on the security deposited. With regard to said, the Appellant may consider in accordance with applicable rules and regulations. 6. The Appeal is disposed of, accordingly." 9. The Appellant has filed the application being....
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....ut of the agreement dated 29.04.2006 for power connection executed between Respondent No. 1 and the erstwhile consumer M/s Spentex Industries Limited." 11. The Adjudicating Authority in the impugned order after noticing the detailed pleadings of the parties have rejected the application holding that there is no direct nexus between the non-payment of interest and sale of Corporate Debtor and its functioning as going concern, hence, application cannot be entertained under Section 60(5) of the IBC. The Adjudicating Authority in the impugned order in paragraph 8 (vi), (vii) & (viii) made following observations:- "VI. Therefore, the disputes unrelated to insolvency must be decided by appropriate forums not by this Tribunal. In the present case, the claim for interest is not directly linked to the insolvency resolution of the Corporate Debtor. Instead, it pertains to contractual obligations under electricity regulations, which either fall under the purview of the CGRF set up under section 42(5) of the Electricity Act, 2003 or civil courts. VII. In light of the above stated observations and judicial precedents this Tribunal is of the opinion that, the question as to ....
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....oticed paragraph 10 of the reply given by the Uttar Gujarat Vij Company where details of the fresh connection have been made. Request application for refund of security deposit was made on 16.06.2023 which was processed and security deposit was paid to the Appellant on 30.06.2023. 13. The reliefs and concessions granted to the Appellant by the Adjudicating Authority cannot be read to mean any direction with regard to payment of interest on the security deposit. The claim of payment of interest of security deposit cannot be said to have arisen out of liquidation proceeding. Reliefs and concessions which has been granted to the Appellant as extracted above cannot be read to mean that the reliefs and concessions also include claim of the Appellant for grant of interest on security deposit from the date when electricity was permanently disconnected in the year 2017. 14. Coming to the order which was passed by this Tribunal on an application which was filed by the Appellant in the disposed of Appeal on 18.12.2023 in IA No.4473 of 2023. This Tribunal noticed earlier order dated 16.05.2023 while disposing of the application. In paragraphs 5 to 8, following was observed:- "5....
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....t this Tribunal has not adjudicated on the merits of the question as to the entitlement of the Corporate Debtor to the Interest on the Security Deposit which has been sought by way of this Application. The Applicants are at liberty to take recourse in accordance with law before the Competent Court/Tribunal/Authority of jurisdiction to enforce their legal rights." 16. One of the submissions raised by the Counsel for the Appellant is that by virtue of Regulation 4.11 of the GERC Regulations, the Appellant was clearly entitled for interest on the security deposit which was made by erstwhile company. It is further submitted that this Tribunal in its order had already observed that claim of the Appellant for interest on security deposit be considered as per Regulation but Adjudicating Authority failed to consider the entitlement of the Appellant as per Regulation 4.11. Regulation 4.11 of GERC Regulations relied by the Appellant provides as follows:- "4.11: "The licensee shall pay interest on Security Deposit of consumer for the electricity supplied, at the Bank Rate (as on 1st April of every year) notified by Reserve Bank of India or such higher rate as may be fixed by the C....