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2022 (8) TMI 717 - HC - Insolvency and BankruptcyRefusal of connection for new electricity connection - demand of past outstanding dues against respondent no.3 - Section 53(1)(f) of the IBC - HELD THAT:- Regulation 32-A of the Liquidation Process Regulations of 2016 clearly specifies that “liabilities” for the purpose of going concern sales in liquidation are only those liabilities which have been identified and earmarked for the going concern sale by the committee of creditors, if not, by the liquidator - The said provision, read with Regulation 39-C of the Corporate Persons Regulations, 2016, is unambiguous and leaves no scope of construing that all the liabilities, including pre-CIRP liabilities, are transferred to the successful Resolution Applicant in a going concern sale. It is well-settled that the debts of the power distribution licensee do not operate as charge on the assets of the corporate debtor. The Regulations framed under the authority conferred by the IBC cannot be construed to override the provisions of the Code itself. Hence, no interpretation contrary to Section 53 of the IBC which, again, is preceded by a non obstante clause, can be attributed to the expression “going concern sale”, as contemplated in Rule 32 of the Liquidation Process Regulations, 2016 - In the present case, the distribution licensee had made its claim during the resolution process as well as before the liquidator. Thus, whatever claim was allowed by the liquidator and sanctioned by the NCLT as Adjudicating Authority would be payable to the WBSEDCL from the sale proceeds in the ratio and order of priority as stipulated in Section 53. The WBSEDCL cannot, thus, have a double claim on the sale proceeds on the one hand and again from the auction purchaser merely on the strength of the expression “going concern sale” as used in the EOI. The claim of the WBSEDCL against the petitioners for the electricity dues left by the erstwhile owners/management of the petitioner no.1-company prior to commencement of the CIRP, is turned down - The WBSEDCL is directed to process the application of the writ petitioners for new electricity connection at the earliest and to give such electricity connection to the petitioners, without insisting upon payment of such dues within a month from compliance of all other formalities by the petitioners in that regard. Application allowed.
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