2023 (8) TMI 196 - AT - Insolvency and Bankruptcy

Seeking refund of security deposit - adjustment was done while the moratorium was in operation or not - HELD THAT - It is found that firstly the Appellant did not file any claim and secondly, it did not choose to appear to contest the application. After the liquidation order was passed on 21.01.2020, all tangible or intangible, movable or immovable properties as evidenced in balance sheet of the Corporate Debtor, being a part of the liquidation estate in terms of Section 36(3) of the Code, could not have been utilised by the Appellant by invoking general terms of supply of electricity. The electricity bills incurred by CD during the moratorium period were paid and the Appellant after the commencement of liquidation unilaterally adjusted the outstanding bills. There are no merit in the present appeal and the same is hereby dismissed.

Summary

Issues involved:
The appeal against the order allowing the refund of a security deposit by the Adjudicating Authority.

Summary:
The appeal was filed against the order passed by the Adjudicating Authority allowing the application for refund of a security deposit. The Corporate Insolvency Resolution Process was initiated against the Corporate Debtor, and the Resolution Professional filed an application for liquidation, which was granted. The Appellant provided electricity connection to the Corporate Debtor, and disputes arose regarding the load and payment of charges. The Appellant alleged non-payment of charges, while the Respondent claimed low production leading to non-payment. The Adjudicating Authority allowed the refund of the security deposit during the moratorium period, without granting interest. The Appellant argued that the adjustment was made at the request of the Resolution Professional before the liquidation order, while the Respondent contended that the adjustment was made during the liquidation proceedings. The Tribunal found that the Appellant did not file any claim or contest the application, and unilaterally adjusted outstanding bills after the liquidation order. Considering these facts, the appeal was dismissed.

This case involved disputes over the refund of a security deposit during the Corporate Insolvency Resolution Process and liquidation of the Corporate Debtor. The Tribunal examined the actions of the parties, the timing of the adjustment of the security deposit, and the implications of the moratorium period on such transactions. The decision highlighted the importance of following legal procedures and agreements, especially in insolvency proceedings, to ensure fair treatment of all parties involved.