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TMI Blog2017 (10) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... ose making huge bill of lakhs of rupees to get output from that industry, then to our understanding, supply of electricity is used as input for manufacturing purpose to get output from the factory and it obviously to make profits. Essential service is a service for survival of human kind, but not for making business and earn profits without making payment to the services used. When company is using it for making profit, then the company owes to make payment to the services/goods utilized in manufacturing purpose. Since it is not the defense of the debtor company that this electricity is used for lighting purpose, and admittedly using for running manufacturing business, those service will not fall within the ambit of Section 14(2) of mora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make payments as demanded by the Applicant herein except a part payment of ₹ 48,07,402 towards dues that arose from January 2017 till August 2017. Applicant's Counsel submits that as on 18.01.2017, the total outstanding arrears of electricity bill payable by the Corporate Debtor for High Tension Consumer No. 184279045210 is ₹ 1,25,83,970 and High Tension Consumer No. 184819033250 is ₹ 1,55,43,090 total aggregating to ₹ 2,81,21,060. Since the Corporate Debtor made payment of ₹ 48,07,402 on 18.08.2017, the total outstanding arrears payable by the Corporate Debtor as on date has aggregated to ₹ 2,38,00,650. 3. The Applicant's Counsel states that distribution companies have to purchase power fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial service is included in IRP costs under Regulation 31 of IBBI (CIRP) Regulations, this Applicant is entitled to make its claim under the head of IRP costs ahead of all other costs covered under the aforesaid Regulation. Therefore, the Counsel submits this service is to be treated as essential service not as an input to the output produced or supplied by the Corporate Debtor. The Corporate Debtor Counsel further submits that this company is operating as going concern on EBITDA loss since before commencement of the IRP and continuing to do so. The Corporate Debtor closing cash balance as on 26.07.2017 is ₹ 1.9 crores, of which payments amounting to ₹ 77 crores towards statutory dues and other creditors have to be released by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to in section 14(2) shall mean - (1) Electricity; (2) Water; (3) Telecommunication services; and (4) Information technology services, to the extent these are not a direct input to the output produced or supplied by the corporate debtor. Illustration - Water supplied to a corporate debtor will be essential supplies for drinking and sanitization purposes, and not for generation of hydro-electricity. 11. By reading this Regulation, it appears that electricity, water and telecommunication services and Information Technology service are to be considered as essential as long as these services are not a requirement to the output produced or supplied by the Corporate Debtor. Under this regulation, an illustr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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