TaxTMI 
TaxTMI 
2026 (6) TMI 1372
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....ate Insolvency Resolution Process (CIRP) was initiated in terms of an order passed by the NCLT dated 22 July 2022 as amended on 27 July 2022. Pursuant to the Resolution Plan, the petitioner by letters dated 29 January, 2025 and 12 February, 2025 respectively had requested WBSEDCL to provide construction power to the premises of the petitioner. By a response dated 6 May, 2025, WBSEDCL demanded that outstanding electricity dues payable by the corporate debtor be paid by the petitioner as a pre-condition to any fresh electricity connection. By such communication, WBSEDCL required that the petitioner pay an amount of Rs. 1,29,73,806.48/- on account of outstanding electricity charges and a further sum of Rs. 1,27,00,838.30/- as on 18 December, 2024 on account of LPSC before effecting any new connection. 3. Being aggrieved by the impugned communication, the petitioner has filed this writ petition on the ground that in view of the Resolution Plan, WBSEDCL had no lawful authority to claim any amount on account of outstanding electricity charges or on account of LPSC. During the course of hearing and in the Written Notes of Submissions, WBSEDCL opted not to press the claim of outstanding....
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....ed Jaishree Steels (P) Ltd. v. W.B. State Electricity Distribution Co. Ltd., 2023 SCC OnLine Cal 2356 to contend that the liability to pay LPSC arose from the continuous non4 payment and default, running from the due date of payment rather than freezing on the date of the original principal bill. It was further contended that while the IBC moratorium under section 14 of the Code protects a corporate debtor during the CIRP period, it does not provide permanent immunity against statutory liabilities which crystallize or are explicitly demanded after the expiry of the moratorium period. It was also contended that the distribution licensee is legally obliged to enforce the Terms and Conditions of Tariff Regulations, 2011, and has no discretionary power to waive the dynamically accrued LPSC, since it is a statutory levy triggered automatically by a consumer's default. In this connection, reliance was also placed on Shree Rajasthan Syntex Ltd vs Chief Engineer Commercial Ajmer & Anr, 2025 SCC OnLine NCLAT, to contend that statutory claims under the Electricity Act, 2003, which arose after the Insolvency Resolution proceedings, remain fully viable and cannot be extinguished or modifie....
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.... the respondents. This section only states that once a resolution plan, as approved by the Committee of Creditors, takes effect, it shall be binding on the corporate debtor as well as the guarantor. This is for the reason that otherwise, under Section 133 of the Contract Act, 1872, any change made to the debt owed by the corporate debtor, without the surety's consent, would relieve the guarantor from payment. Section 31(1), in fact, makes it clear that the guarantor cannot escape payment as the resolution plan, which has been approved, may well include provisions as to payments to be made by such guarantor. This is perhaps the reason that Annexure VI(e) to Form 6 contained in the Rules and Regulation 36(2) referred to above, require information as to personal guarantees that have been given in relation to the debts of the corporate debtor. Far from supporting the stand of the respondents, it is clear that in point of fact, Section 31 is one more factor in favour of a personal guarantor having to pay for debts due without any moratorium applying to save him." 107. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those dec....
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....period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued." (emphasis added) 10. In view of the Resolution Plan duly approved by the NCLT, any relief or concession to the corporate debtor with regard to the outstanding electricity charges or LPSC connected thereto prior to the CIRP cannot be reopened in such an indirect and circuitous manner. This is the sweep of the Code. The petitioner who is the successful resolution applicant and has taken over the corporate debtor company on the basis of the 'clean slate principle' cannot be saddled with the hydra heads of pre CIRP dues of the corporate debtor popping up. (Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. (Supra) @ Para 107 and West Bengal Statte Electricity Distribution Co. Ltd. vs. Sri Vasavi Industries Ltd. and Anr. (Supra). In such circumstances, there is no merit in the contention of WBSEDCL that though the earlier dues are not recoverable on account of outstanding electricity charges, the claim for LPSC (for the pre CIRP stage) can still be demanded from the petitioner. The finalization of the Resolution Plan and the ....
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....er sum by suit, cut off the supply of electricity and for that purpose cut or disconnect any electric supply line or other works being the property of such licensee or the generating company through which electricity may have been supplied, transmitted, distributed or wheeled and may discontinue the supply until such charge 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 elect....