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TMI Blog2025 (1) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... gannath Sponge Private Limited [ 2023 (9) TMI 1071 - SC ORDER ] fully covers the issue - It was held in the said case that 'the issue of corporate debtor s dues falls within the fold of the phrase arising out of or in relation to insolvency resolution under section 60(5)(c) of the Code.' Conclusion - The pre-CIRP dues are to be addressed through the liquidation process under the IBC, not through imposing liability on auction purchasers. No error has been committed by the Adjudicating Authority - Appeal dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellant : Ms. Sonam Anand, Mr. Yakesh Anand and Ms. Deepshikha Sansanwal , Advocates For the Respondents : Mr. Krishna Dev Vyas, Ms. Shweta Kapoor and Ms. Aakriti Kapila, Advocates for R-1 Mr. Deepanshu Badiwal , Advocate for R - 2 JUDGMENT ASHOK BHUSHAN , J. This Appeal by UK Power Corporation Limited has been filed, challenging the Order dated 06.01.2023 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Principal Bench) in I.A. No. 4516/2022 filed by the Respondent No. 1. The Application filed by R-1, the Successful Auction Purchaser of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uccessful Auction Purchaser was as where is, as is what is and whatever there is basis . When the Auction is on the above conditions which was reflected in the e-Auction notice, Successful Auction Purchaser is liable to clear all liabilities and electricity dues. Successful Auction Purchaser was required to make independent enquiries regarding dues of local taxes, electricity and water charges. Successful Auction Purchaser cannot disown the liability to pay electricity dues, which remained unpaid by the Corporate Debtor. It is submitted that Appellant under statutory provisions of Uttarakhand Electricity Regulatory Commission (the Electricity Supply Code, Release of New Connections and Related Matters) Regulations, 2020 was entitled to charge past Electricity Dues on new owner/occupier. Learned Counsel for the Appellant relied on the Judgment of the Hon ble Supreme Court in the matter of Telangana State Southern Power Distribution Company Ltd. Anr. Vs. Srigada Breverages reported in (2020) 6 SCC 404 and also in the matter of K.C. Ninan Vs. Kerala State Electricity Board Ors. reported in 2023 SCC OnLine SC 663. NCLT in the Impugned Order has relied on the Judgment of this Tribunal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to Rs.7,66,95,203/- (Rupees Seven Crores Sixty-Six Lakhs Ninety-Five Thousand Two Hundred and Three) has been admitted. The list of stakeholders, clearly indicates that the claim of the Appellant was duly admitted. The true copy of letter dated 18.04.2022, along with the list of stakeholders is marked and annexed as ANNEXURE 4 (Colly). 10. That the Liquidator has conducted seven e- auctions for the sale of the assets of the Corporate Debtor as per the provisions of the IBC 2016. In the 7the-auctiondated 30.07.2021, the liquidator sold the Land and Building situated at Gangapur and Basai, 5KM, Moradabad Kashipur Road, Kashipur, Tehsil Kashipur 244711, Uttarakhand (Freehold Land- 38.52 Acre) to M/s Shyam Baba Developers and Builders Pvt. Ltd. (Respondent 1), wherein the reserve price was kept as Rs. 19.86 Crore and the total amount realized was Rs. 19.96 Crore. The Auction was conducted by the Answering Respondents dated 17.06.2021, on as is where is basis . The Answering Respondents had issued the letter of possession dated 03.09.2021 to the Respondent No. 1. The true copy of the letter of possession of the land sold to the Respondents no. 1, along with the certificates of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Senior Counsel for Appellant is also distinguished from that in the present case, since in the Telangana Southern State Power case auction- purchase of the asset had taken place, whereas in the present case the corporate debtor is under insolvency resolution and the settlement of past debts of financial and operational creditors will be considered under resolution plan or liquidation, as the case may be. Hence DVC, which is an operational creditor, or any other creditor cannot claim and be given priority in payment of its pre- CIRP debt before the resolution plan is finalised and approved by the Adjudicating Authority. 11. It is useful to refer to Judgment of this Tribunal in the matter of Chinar Steel Segments Centre Pvt. Ltd. Vs. Samir Kumar Agarwal, Liquidator of Bhaskar Shrachi Alloys Limited (in Liquidation) and Anr. in Comp. App. (AT) (Ins.) No. 1355/2022, decided on 11.10.2023. In the above case also, Successful Auction Purchaser filed an Application seeking direction to provide new electricity connection to the factory premises which Application was opposed by the Damodar Valley Corporation. Adjudicating Authority rejected the Application against which the Appeal was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be a different matter, if proceedings under statutes like Income Tax Act had attained finality, fastening a liability 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RE IS AND WITHOUT RECOURSE BASIS under Rules 8 and 9 of the Security Interest (Enforcement) Rules (hereinafter referred to as the Rules ) for the recovery of the dues detailed as under : - The total amount due as on 30-4-2017 Rs. 13,97,26,258.77/- (Rupees thirteen crores ninety- seven lakhs twenty-six thousand two hundred fifty- eight and paisa seventyseven) with future interest and costs till date of payment Accounts Nos. (1) 373OSLB140940002 and (2) 30151010006439 Details of encumbrances over the property, as known to the bank For Property No. 1: Nil For Property No. 2: Subsequent to our MOD, the following transactions observed in EC 1. As per Doc No. 2611/2016 dated 15-6-2016, the mortgager has sold the property to the extent of 540 sq. yd. to private party, for worth of Rs. 9,72,000. 2. As per Doc No. 657/2015 dated 5-2- 2015, the mortgager has sold the property to the extent of 620.83 sq. yd. to the Executive Officer, Ramapally Gramapanchayat for worth of Rs. 12,42.000. 3. As per Doc No. 2721/2014 dated 5- 8-2014, the mortgager has sold the property to the extent of 204.75 sq. yd. to the Gramapanchayat Executive Officer, Ramapally for worth of Rs. 2,48,000. Details outstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liability to pay electricity dues exists on the respondent (purchaser). 32. The above judgment has no application in the facts of the present case which arose out of the liquidation process as per Liquidation Regulations, 2016. Respondent No.2 has filed its claim which was admitted in the proceeding and has dealt with. The judgment of the Hon ble Supreme Court in Telangana State Southern Power Distribution Company Limited does not help the Respondent No.2 in any manner in the present case. 13. Another Judgment which has been relied by the Counsel for the Appellant is K.C. Ninan (Supra). Hon ble Supreme Court in the above case has held that when Auction is held as is where is basis and has held that it becomes duty of the buyer to exercise due diligence. Supreme Court has also noted and relied on the several Judgments of the Hon ble Supreme Court, including the Judgment of the Hon ble Supreme Court in Telangana State Southern Power Distribution Company Ltd. Anr. (Supra). There can be no dispute to the proposition laid down by the Hon ble Supreme Court in K.C. Ninan (Supra). It is however relevant to notice that Judgment of the Hon ble Supreme Court in K.C. Ninan (Supra) was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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