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TMI Blog2017 (12) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... that it amounts to absolving the Applicant or the Corporate Debtor from paying the electricity consumption charges. But it is not so. The Electricity Company can claim the power consumption charges as an ‘Operational Creditor’ from the assets of the Corporate Debtor on par with other operational creditors based on priorities given in the Code and the Rules and Regulations. Therefore, the Corporate Debtor or the Applicant is not absolved from paying the charges. The claim of the Corporate Debtor to pay the electricity consumption charges shall be taken into account by the Resolution Professional along with other Operational Creditors following the priorities given under the Code, Rules and Regulations. In view of the above discussion, there shall be a direction to the Dakshin Gujarat Vij Company Limited, Piplod Division Office, not to disconnect the power supply to M/s. ABG Shipyard Limited, Surat Unit, during the moratorium period. However, Dakshin Gujarat Vij Company Limited is entitled to make a claim for electricity consumption charges with the Resolution Professional and the Resolution Professional shall receive such claim, and process it along with other Operational Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nafter referred to as the Regulations ]. It is also stated that Section 238 of the Code gives overriding effect to the provisions of the Code. It is also stated that if any Creditor violates the provisions of Section 14 the Creditor is punishable as laid down in Section 74(2) of the Code. It is farther stated that if the Electricity Company disconnected the electricity supply to the Surat Unit of the Corporate Debtor 200 employees working in that unit would lose their livelihood. 3. On this Application, Notice was given to the Respondent. The Electricity Company appeared through Counsel and filed its Reply, wherein it is stated as follows; 3.1 The Electricity Company issued a Bill for consumption of electricity for the month of September 2017 amounting to ₹ 6,62,254.11 ps., for H.T. Connection No. 10208 and another bill amounting to ₹ 87,251.25 ps., for the H.T. Connection No. 10226 for consumption of electricity for the month of September 2017 on 18.9.2017. It is stated that Applicant has to pay the same within 10 days of the date of the bill but the Applicant failed to pay the same. Therefore, the Electricity Company issued notice dated 28.9.2017 under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Electricity Act, 2003. The Electricity Act, 2003 is a Special Act and it is a complete code. The provisions contained in Section 14(2) of the Code are therefore not applicable to this case. Regulation 32 of the Regulations is not applicable to the Distribution Licensee because the Electricity Company is not suspending or terminating or interrupting supply of electricity in case if the Applicant make payment of current bills for consumption of electricity. It is further stated that Section 174 of the Electricity Act, 2003 gives overriding effect over all other laws. It is not stated in Section 238 of the IB Code that the provisions contained under the Electricity Act, 2003, more particularly Section 56 thereof will have no effect or that the provisions of Section 238 of the IB Code will prevail over the Electricity Act, 2003 or shall have overriding effect over it. 4. Admittedly, the Corporate Debtor is undergoing Corporate Insolvency Resolution Process. Admittedly, the Electricity Company supplied electricity to the Corporate Debtor. Admittedly, the Corporate Debtor has to pay the electricity consumption charges to the Electricity Company for the months of September, 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the Corporate Insolvency Resolution Process from recovering any kind of debt due by the Corporate Debtor even at the stage of execution in any Court of Law, Tribunal, Arbitral Panel or other authority. 8.2 The words other authority used in Section 14(1)(a) of the Code necessarily include the electricity authorities, may be the licensee or the distributor. Therefore, the moratorium order passed by this Adjudicating Authority gives protection from all other authorities including the electricity authorities. 8.3 Section 14(2) of the Code says that there must be continuous supply of essential goods during the moratorium period. The intention of the Legislature in introducing sub-section (2) of section 14 is to see that the Corporate Debtor function as a going concern . It is also the duty of the Resolution Professional to see that the Corporate Debtor function as a going concern. Section 20 of the Code says that Interim Resolution Professional shall make every endeavour to protect and preserve the value of the property of the Corporate Debtor and manage the operations of the Corporate Debtor as a going concern. Section 23(2) of the Code says, the Resolution Professional s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f items in List-3 Concurrent List. Serial No.9 of the List-3 is Bankruptcy and Insolvency. Serial No. 38 of List-3 is Electricity. Both the subjects are in Concurrent List. In respect of both the above said subjects, Parliament has passed the Electricity Act, 2003 and the Insolvency and Bankruptcy Code, 2016. The Insolvency and Bankruptcy Code, 2016 is later in point of time than the Electricity Act, 2003. It is settled law, that when there is two enactments passed by the Parliament, and if there is any provision in such Acts which is repugnant to another, the provisions contained in the Act, which is later in point of time, shall prevail. On this aspect, the Hon ble Supreme Court of India, in the matter of KSL Industries Ltd. v. Arihant Threads Others, reported in (2015) 1 Supreme Court 166, has held in Paras No. 41 and 48 as follows; 41. Indeed, the question as to which Act shall prevail must be considered with respect to the purpose of the two enactments; which of the two Acts is the general or special; which is later. It must also he considered whether they can be harmoniously construed. 48. In view of the observations of this Court in the decisions referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder or any instrument having effect by virtue of this Act, rule or regulation shall have effect in so far as it is inconsistent with any other provisions of the Consumer Protection Act, 1986 (68 of 1986) or the Atomic Energy Act, 1962 (33 of 1962) or the Railways Act, 1989 (24 of 1989) . Section 173 in the Electricity Act, 2003 is an exception to Section 174 of the said Act. Section 173 says, the provisions of the Electricity Act insofar as they inconsistent with Consumer Protection Act, 1986 or the Atomic Energy Act, 1962 or the Railways Act, 1989 have no effect. By the date of passing of the Electricity Act, 2003 the Insolvency and Bankruptcy Code, 2016 was not there in existence. Therefore, there is no scope of introducing the IB Code in Section 173 of the Electricity Act, 2003. 10. Now coming to Section 238 of the Code, it reads as follows; Provisions of this Code to override other laws 238. The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. In view of Section 238, any other law which is inconsistent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. It would, thus, appear the Electricity Act, 2003 is intended to deal with the generation, transmission, distribution, trading and use of electricity. Whereas the Insolvency and Bankruptcy Code, 2016 is enacted with an object to revive the Corporate Debtors if possible, and, if not possible, to liquidate the Corporate Debtor by declaring a period of not less than 180 days as moratorium which could be extended up to another 90 days. Therefore, the object of the later enactment, namely IB Code is to give some kind of protection to the Corporate Debtors during the moratorium period which, as already said, extend to supply of essential goods. Therefore, the provisions of Section 56 of the Electricity Act, 2003 which is repugnant to Section 14(2) of the IB Code has to give way and shall not cause any interruption of supply of electricity on the ground of non-payment of electricity consumption charges during moratorium period. In my opinion, therefore, keeping in view the object and purpose underlying both the enactments viz; Electricity Act, 2003 and Insolvency and Bankruptcy Code, 2016, the provisions of Section 14(2) of the IB Code have to be construed as overriding the Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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