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TMI Blog2024 (7) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... tor) was admitted to liquidation on 05.08.2019 and Respondent No. 2 was appointed as the Liquidator. 3. Respondent No. 2 invited claims pending against the Corporate Debtor. Respondent No. 1 submitted its claim of Rs. 34,59,859/-, outstanding electricity dues relating to account no. 3002810493 for its building property located at Bajra Road Village Bajra, Rahon Road, Ludhiana. 4. Respondent No. 2 admitted the claim of Rs. 34,59,859/-. Respondent No. 2 made public announcement for sale of assets of the Corporate Debtor by way of auction on 03.02.2022 and auction took place on 18.02.2022 through the e-auction platform of M/s C1 India Pvt. Ltd. The Appellant was the highest bidder for the Land measuring 5747.50 sq. yards at Bajra Road Village Bajra Rahon Road, Ludhiana alongwith building. Accordingly, the said property was sold to the Appellant and on payment of the entire sale consideration of Rs. 4,30,00,000/-, the sale certificate was issued by Respondent No. 2 to the Appellant on 22.03.2022. The property in question had an electricity connection bearing Account No. 3002810493 with Respondent No. 1 which was disconnected due to the non-payment of electricity dues. 5. The Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready reference : - "WHEREAS the said Land of Lot No. 1 of GCSPL has been sold on "As is where is basis" "As is what is basis". "Whatever there is basis" "No recourse basis in which Liquidator is not responsible for any shortfall or defect or shortcoming in the said Land or title of the said land and that all past, present or future statutory or other liabilities, whether due or overdue, by whatever name being called, including but not limited to taxes / demands/ claims/ maintenance fee / electricity dues / water charges / local authority dues / State Government dues / dues of any agency of State or District, etc., outstanding as on date or yet to fall due in respect of the said land should be ascertained and borne by the successful bidder". 10. It has been held that the since the assets have been taken over "as is where is basis, as is what is basis, whatever there is basis, no recourse basis". Therefore, liabilities towards outstanding electricity dues having been waived because of liquidation is not tenable under the law. 11. While assailing the impugned order, Counsel for the Appellant has submitted that pre-CIRP dues cannot be fastened upon the auction purchaser. It is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all past, present and future property liabilities including electricity dues outstanding as on date shall be borne by the successful bidder, the impugned order does not suffer from any error in which it has been held that the liabilities to pay of the outstanding electricity dues is of the Appellant being the successful bidder. He has also submitted that the judgment in the case of K.C. (Supra) has not been considered in the case of Paschimanchal Vidyut Vitran Nigam Ltd. (Supra). 13. In rebuttal, Counsel for the Appellant has argued that the only judgment relied upon by Respondent is in the case of K.C. (Supra) which was in respect of a sale under the SARFESAI Act in which it has been held that the Electricity Act would apply whereas it has been held by this Court that the provisions of the Code override the Electricity Act, therefore, it is of no help to Respondent No. 1. 14. We have heard Counsel for the parties and perused the record. 15. The point involved is short and simple as to whether the Appellant being the purchaser of the asset, in liquidation, is liable to pay past dues of the electricity of the CD, for the purpose of obtaining a new electricity connection on pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability upon the corporate debtor, since, in such cases, the dues payable to the Government would come within the meaning of the expression "operational debt" under Section 5(21), making the Government an "operational creditor" in terms of Section 5(2). The moment the dues to the Government are crystallised and what remains is only payment, the claim of the Government will have to be adjudicated and paid only in a manner prescribed in the resolution plan as approved by the adjudicating authority, namely, the NCLT." The above-quoted observations from Embassy Property Developments Private Limited (supra) would confer jurisdiction on the tribunal constituted under the Code insofar as the appellant - Tata Power Western Odisha Distribution Limited is insisting on payment of the dues of the corporate debtor for restoration/grant of the electricity connection. The dues of the corporate debtor have to be paid in the manner prescribed in the resolution plan, as approved by the adjudicating authority. The resolution plan is approved when it is in accord with the provision of the Code. Thus, the issue of corporate debtor's dues falls within the fold of the phrase 'arising out of or in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted 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 Authority did not commit any error in issuing direction in Para 16 of the impugned order, as extracted above, to energise the electricity connection without insisting on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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