TaxTMI 
TaxTMI 
2026 (1) TMI 160
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....pellant i.e. Maithan Alloys Limited, who is the Auction Purchaser, under Section 61 of the Insolvency and Bankruptcy Code, 2016 ('Code') against the Impugned Order dated 16.04.2024 passed by the National Company Law Tribunal, Kolkata Bench ('Adjudicating Authority') in I.A. No. 723 of 2023 in C.P.(IB) No. 176/KB/2018). 2. Eastern Power Distribution Company of Andhra Pradesh Limited is the Respondent No. 1 herein. 3. Mr. Samir Kumar Bhattacharya, Liquidator of the Corporate Debtor is the Respondent No. 2 herein. 4. The Appellant submitted that the Liquidator informed Respondent No. 1, on 05.06.2021, of the Appellant's status as the auction purchaser of the Corporate Debtor, clarifying that no monies were payable to Respondent No. 1 under the waterfall mechanism of Section 53 of the Code. The Appellant contended that Respondent No. 1's inaction since June 2021 indicates its implicit acceptance of this position, thereby precluding any subsequent claims against the Appellant. 5. The Appellant submitted that State Bank of India filed IA No. 924 of 2021 before this Appellate Tribunal in C.A. (AT) (Ins) No. 1245-1247 of 2019 to record the Joint Settlement Agreement dated 24.05....
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.... Code. The Appellant contended that these directions were lawful and aligned with the Appellant's rights as the purchaser. The Appellant submitted that Respondent No. 1 challenged the order dated 05.10.2021 before this Appellate Tribunal in C.A. (AT) (Ins) No. 961 of 2021, which was dismissed vide order dated 26.05.2022, upholding the Adjudicating Authority's directions while granting liberty to Respondent No. 1 to claim dues under Section 53. The Appellant contended that this order reinforced the Appellant's position and limited Respondent No. 1's claims to the liquidation estate. 9. It is the case of the Appellant that Respondent No. 1, vide its letter dated 25.10.2022, refused to refund the balance amount, citing a pending appeal before the Hon'ble Supreme Court, and demanded an additional Rs. 8,64,73,000/- as Adequacy Consumption Deposit. The Appellant contended that this refusal and demand were in blatant violation of the Adjudicating Authority's and this Appellate Tribunal's orders. 10. The Appellant submitted that it paid Rs. 9,34,91,770/- on 06.01.2023 and Rs. 2,55,865/- on 17.02.2023 under protest as Adequacy Consumption Deposits to prevent disconnection. The Appella....
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....the true-up of retail sale of electricity for the financial years 2019-2020 and 2020-2021, (iii) the true-up for the distribution business covering the third control period from FY 2014-15 to FY 2018-2019, and (iv) the true-up for the transmission business over the same control period. The Respondent No. 1 contended that this common order, being a statutory authority, serves as a binding directive that underpins the Respondent No. 1's actions in recovering outstanding dues, including the true-up charges of Rs. 3,16,08,440/- from the Appellant. 16. The Respondent No. 1 submitted that the common order dated 30.03.2022, explicitly relies upon the Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Wheeling and Retail Sale of Electricity) Regulation 2005 (hereinafter "Regulation 4 of 2005"), notified by the APERC. The Respondent No. 1 contended that this regulation provides the legal foundation for its claims, particularly through Clause 19, which mandates the Distribution Licensee like the Appellant to file proposals for the pass-through and sharing of gains or losses arising from variations in "uncontrollable" items (e.g., cost of power purchase....
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....ause 10.5 allows the Distribution Licensee to claim variations in "uncontrollable" items in the succeeding year, with financing costs accounted for any delay in true-up realization, and prohibits revisiting corrections unless exceptional circumstances arise. The Respondent No. 1 further submitted that this clause safeguards the financial viability of DISCOMs, including the Respondent No. 1, by ensuring timely recovery of legitimate costs. 21. The Respondent No. 1 submitted that Clause 10.6 requires the annual filing of gains and losses on "controllable" items, adjusted for uncontrollable factors, while Clause 10.7 mandates a review of aggregate gains or losses over the control period, with yearly sharing for the first control period. The Respondent No. 1 contended that Clause 10.8 further provides for pass-through of gains or losses due to force majeure, subject to the Commission's order, demonstrating the regulatory framework's adaptability to unforeseen circumstances, which supports the Respondent No. 1's actions. 22. The Respondent No. 1 submitted that paragraph 470(5) specifies that for service connections taken over under the CIRP approved on 16.12.2019, DISCOMs shall ac....
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....21 in IA No. 748 of 2021 before this Appellate Tribunal in Company Appeal (AT) (Ins.) No. 961 of 2021 which was dismissed by this Appellate Tribunal on 26.05.2022, upholding the Adjudicating Authority's directions. 27. The Appellant has also brought out that based on another I.A. bearing I.A. No. 712 of 2023 for refund, the Adjudicating Authority vide its order dated 16.06.2023 asked the Respondent No. 1 to refund the amount and thereafter, the Respondent No. 1 made partial refund of Rs. 16,83,91,560/- on 24.07.2023. The Appellant assailed the Impugned Order to the extent that it upheld Respondent No. 1's deduction of Rs. 3,16,08,440/- as true up charges based common order dated 30.03.2022 of APERC. It is the case of the Appellant that it is liable to pay dues of electricity post CIRP period and cannot be burdened with any pre CIRP period. 28. On the other hand, it is the case of the Respondent No. 1 that the Respondent No. 1 being a company wholly owned by State of Andhra Pradesh is required to follow statutory obligations to the regulations stipulated APERC, which derives authority under Electricity Act, 2003 having binding legal framework, which covers "determination" of v....
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....oint of Appellant is that since true-up charges are calculated on the base years of 2014 to 2019, the Appellant cannot be saddled with the true-up charges. On this issue, the Respondent no. 1 has brought out that the Appellant has become successful auction purchaser in terms of "Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. We note relevant portion reads as under: - "45. Final report prior to dissolution- (3) The liquidator shall submit an application along with the final report and the compliance certificate in Form H to the Adjudicating Authority for- (a) closure of the liquidation process of the corporate debtor where the corporate debtor is sold as a going concern." (Emphasis Supply) From above, it is noted that under this clause the Liquidator process is closed when the Corporate is sold on going concern basis, which implies that the Corporate Debtor survive and there is no need to dissolve the company in terms of Section 54 of the Code. It further implies that all existing rights and obligations and responsibilities including claims, licenses, permits of various authorities, etc., continues to operate in fav....
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.... (Liquidation Process) Regulations, 2016, once the successful auction purchaser like Appellant takes over the Corporate Debtor then subsequent to date of sales certificate, the Appellant is liable to pay the charges. We have noted that true-up charges were levied by the Respondent post Sale Certificate by the Liquidator dated 16.09.2021. It is further noted that the true-up charges as per regulatory regime of APERC (covered by Electricity Act, 2003) provides for multi-year tariff setting mechanism. 37. We do not agree with the contentions of the Appellant that based on Rule 470(5) of the common order dated 30.03.2022 of APERC., the Appellant is absolved of such true up charges payment. 38. Based on above detailed observations, we do not find any error in the Impugned Order. The Appeal is devoid of any merit and stand rejected. No cost. I.A., if any, are closed Comp. App. (AT) (Ins) No. 1537 of 2024 39. The present appeal has been filed by the Appellant i.e. Maithan Alloys Limited, who is the Auction Purchaser, under Section 61 of the Insolvency and Bankruptcy Code, 2016 ('Code') against the Impugned Order dated 23.04.2024 passed by the National Company Law Tribunal, Kol....
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....al in IA(IBC)/748(KB)2021; (c) If the respondent nos./contemnors failed to show sufficient cause, the rule issued as per prayer (b) herein above be made absolute and fine be imposed on the respondent nos./contemnors of Rs. 2,000/- and/or imprisonment for 6 months be sentenced and/or detention in civil prison for 6 months be ordered; 2. While disposing of IA(IBC)/723(KB)2023 we have already considered the Order dated 05.10.2021 in IA(IBC)/748(KB)2021, and passed the following Orders: - (a) We have considered the rival contentions and perused records. (b) In as much as the Respondent was bound to levy true up charges as mandated by APERC vide tariff order of 2022-23 (post sale) and the Applicant had failed to pay the amounts raised, we find no infirmity in deduction of Rs. 3,16,08,439.56/- as per break up supra. However, we would note that out of Rs. 25.05 crores paid in term of Order dated 05.10.2021, a refund of Rs. 16,83,91,560/- has been made to the Applicant adjusting to Rs. 03,16,08,440/-towards true up charges. (c) Hence, if the Applicant has paid Rs. 24.50 crores to Respondent No. 1, the said Respondent shall retain the following a....