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TMI Blog2023 (12) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed for deciding this Appeal are: (i) Corporate Insolvency Resolution Process against the Corporate Debtor, Shashi Oil and Fats Pvt. Ltd. commenced by the Adjudicating Authority on a Section 7 application filed by a Financial Creditor. (ii) The order of liquidation of the Corporate Debtor was passed by the Adjudicating Authority on 21.02.2020. (iii) The Liquidator published E-auction Sale Notice dated 12.08.2020 on as is where is basis, as is what is, whatever there is and without recourse basis. (iv) E-auction was held on 29.08.2020 and Respondent No.1 was held to be highest Bidder for an amount of Rs.3,78,00,000/-. The Respondent No.1 was declared as Successful Auction Purchaser by the Liquidator by email dated 29.08.2020. (v) On 25.09.2020, the Respondent No.1 deposited the entire sale consideration along with the GST. Sale Certificate dated 28.09.2020 was issued as well as Possession Certificate. (vi) The Respondent No.1 made an application to the Appellant for new electricity connection for the premises, which was rejected by the Appellant on the ground that there is demand of electricity dues of Rs.39,15,625/- against the erstwhile Corporate Debtor and unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electricity dues can be collected from Applicant No.1 being Successful Auction Purchaser or Applicant no.2 in which Applicant no.1 is a director. If duty is cast under Electricity Act, 2003 to supply electricity then Respondent No.1 being the electricity supplying company is duty bound to provide electricity connection to Applicant No.2 in which Applicant No.1 is director in terms of Electricity Act 2003. 16. As decided above we direct Respondent No.1 as under: (i) To complete the documentation with Applicants on the basis of Application dated 28.11.2021 submitted by the Applicant No.2 in the office of Respondent No.1 and energise the electricity connection in terms of Electricity Act, 2003 without insisting on the payment of pre-CIRP dues. (ii) Applicants shall otherwise complete all the requirement in terms of Electricity Act 2003 for getting new electricity Connection." (x) The Appellant aggrieved by the said order has come up in this Appeal. 2. We have heard Shri Pradeep Mishra, learned counsel for the Appellant and Shri Kunal Godhwani, learned counsel appearing for Respondent No.1 and 2. 3. Learned counsel for the Appellant challenging the impugned order submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .". 5. We have considered the submissions of learned counsel for the parties and perused the record. 6. There is no dispute between the parties regarding facts of the case. Electricity dues amounting to Rs.39,15,625/- was owed by the erstwhile Corporate Debtor - Shashi Oils and Fats Private Limited. E-auction notice was issued by the Liquidator for sale of the assets. Learned counsel for the Appellant has relied on Clause (h) of the E-auction notice which dealt with due diligence. Clause (h) is as follows: "H. DUE DILIGENCE The Liquidator shall endeavor to provide necessary assistance, facilitating the conduction of due diligence by interest Bidders. The information and documents shall be provided by the Liquidator in good faith. The properties and assets of the Company are proposed to be sold on "As Is Where Is, As Is What Is, Whatever There Is and Without Recourse basis" and the proposed sale of assets of the company does not entail transfer of any title, except the title which the Company has on the assets as on date of transfer. All taxes/ maintenance fees/ outstanding rentals/ electricity/ water charge/ annual lease rentals/ unearned income in case of leasehold propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause 8.4 of the General Terms & Conditions of Supply." 9. The above judgment having been rendered in a case under SARFAESI Act, there was no occasion for extinguishment of dues of the power distribution company since it was not under IBC process. The distinguishing feature in the present case is that the present is a case arising out of IBC where in liquidation process, the Appellant was required to file its claim against the electricity dues outstanding towards the Corporate Debtor who was undergoing liquidation process. The above judgment is thus clearly distinguishable in the facts of the present case. 10. The Judgment of Hon'ble Supreme Court in "Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Ltd. & Ors." (Supra) which has been referred by learned counsel for the Appellant was a case where the Adjudicating Authority has directed District Magistrate and Tehsildar, Muzaffarnagar to release the property which was attached by Paschimanchal Vidyut Vitran Nigam Ltd. for realisation of its dues, for enabling the sale under IBC process. A bill was issued by the Appellant on the Corporate Debtor and District Magistrate issued notice for recovery of outstanding dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed an application before the NCLT for modification of its order dated 21.08.2018, and contended that PVVNL also came under the definition of 'secured operational creditor in realization of its dues in the liquidation proceedings as per law. The application sought amendment of the list of stakeholders. The application was allowed. In view of these factual developments, this Court does not consider it appropriate to rule on the submissions of the liquidator vis-a-vis the fact of non-registration of charges under Section 77 of the Companies Act, 2013. V. CONCLUSION 60. For the above reasons, it is held that the appeal deserves to fail. At the same time, the liquidator is directed to decide the claim exercised by PVVNL in the manner required by law. It shall complete the process within 10 weeks from the date of pronouncement of this decision, after providing such opportunity to the appellant, as is necessary under law." 12. The above judgment in no manner support the submission of the Appellant advanced in this case rather the said judgment mentions it clearly that claim of the electricity dues of the Appellant is to be raised in the IBC process when Corporate Debtor is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cio cannot be accepted. 15. In the case of "Chinar Steel Segments Centre Pvt. Ltd. vs. Samir Kumar Agarwal" (Supra), this Tribunal has noticed the judgment of Hon'ble Supreme Court in "Telangana State Southern Power Distribution Company Ltd. & Anr. vs. Srigdhaa Beverages" as well as "Eastern Power Distribution Company of Andhra Pradesh Limited vs. Maithan Alloys Limited & Ors.- Company Appeal (AT) (Ins.) No.961 of 2021" of this Tribunal which judgment has also been relied by the Adjudicating Authority in the impugned order. The Judgment of this Tribunal in "Shiv Shakti Inter Globe Exports Pvt. Ltd. vs. KTC Foods Pvt. Ltd. & Anr., Company Appeal (AT) (Ins.) No. 650 of 2020" decided on 25.02.2022 also support the submission made by learned counsel for the Respondent. This Tribunal took view that when the Corporate Debtor is sold in the liquidation proceeding, Corporate Debtor cannot be burdened by any past or remaining unpaid outstanding liabilities. In Para 22 of the judgment following has been held: "22. It is no longer Res Integra that while approving a 'Corporate Debtor' sale as a 'going concern' in Liquidation Proceedings without its dissolution in terms of Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vitran Nigam Ltd. vs. Raman Ispat Private Limited and Others" and the order of this Court in "Southern Power Distribution Company of Andhra Pradesh Limited vs. Gavi Siddeswara Steels (India) Pvt. Ltd. and Another." The appellant - Tata Power Western Odisha Distribution Limited cannot insist on payment of arrears, which have to be paid in terms of the waterfall mechanism, for grant of an electricity connection. However, the successful resolution applicant will have to comply with the other requirements for grant of electricity connection. The clean slate principle would stand negated if the successful resolution applicant is asked to pay the arrears payable by the corporate debtor for the grant of an electricity connection in her/his name. In "Embassy Property Developments Private Limited vs. State of Karnataka and Others", this Court clarified that a decision by public authority etc. may fall within the jurisdiction of the tribunals constituted under the Code, where the issue relates to or arises out of the dues payable to an operational or financial creditor, by observing: "37...It will be a different matter, if proceedings under statutes like Income Tax Act had attained fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d directions in Para 39 of the judgment, which are to the following effect: "39. In view of the foregoing discussions, we are satisfied that the Adjudicating Authority committed error in rejecting IA No. 984 of 2021 as not maintainable. We hold that the application is fully maintainable under Section 60(5) for the reasons as indicated above. The Appellant has made out a case for grant of reliefs as claimed in the application. In result, we allow the Appeal in following manner:- The impugned order dated 01.09.2022 is set aside. IA No.984 of 2021 is allowed. Respondent No.1 to grant fresh connection of electricity after taking all necessary charges for fresh connection except outstanding dues of the Corporate Debtor which stood satisfied and extinguished as per the liquidation proceedings against the Corporate Debtor." 18. We, thus, are of the view that submission raised by learned counsel for the Appellant that Successful Auction Purchaser was liable to pay the arrears of electricity dues which were dues of the erstwhile Corporate Debtor and without payment of said dues electricity connection cannot be granted are not in accord with the statutory scheme of IBC. The Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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