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2019 (11) TMI 400

..... during the ‘Corporate Insolvency Resolution Process’ - HELD THAT:- If any amount due for the period of the ‘Corporate Insolvency Resolution Process’ was not paid, in such case, Electricity Board should have moved before the Adjudicating Authority for payment of current dues of ‘Corporate Insolvency Resolution Process’, but it had no jurisdiction to disconnect the electricity in violation of Section 14(2) of the ‘I&B Code’ - The Electricity Board provides services by supplying electricity and thereby comes within the meaning of ‘Operational Creditor’ as defined under Section 5(20) read with Section 5(21) of the ‘I&B Code’. Similar matter fell for consideration before this Appellant Tribunal in “Uttrakhand Power Corporation Ltd. v. M/s. ANG Industries Ltd. [2018 (1) TMI 1445 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] wherein this Appellate Tribunal taking into consideration the fact that the order of ‘Moratorium’ had been passed held that ‘Uttarakhand Power Corporation Limited’ cannot recover any amount as was due for the earlier period prior to the date of initiat .....

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..... as two units namely- (i) LCN 19/3051 (Unit-1); (ii) LCN 19/4028 (Unit-2). On the other hand, M/s. SMM Steel Re-Rolling Mills Private Limited has one unit namely- LCN 18/3255. M/s. Kerala State Electricity Board was supplying electricity to all the aforesaid three units, which were disconnected owing to non-payment of dues during the Corporate Insolvency Resolution Process . 4. In the said common proceeding(s), on 26th October, 2018, the Adjudicating Authority after hearing the parties and on the concessions given by both the parties, directed the Resolution Professional to deposit an amount of ₹ 3.25 Crores, which is equivalent to the dues payable to M/s. Kerala State Electricity Board for the months falling within Corporate Insolvency Resolution Process period in Escrow Account without prejudice to the rights and contentions of either side, likewise directed M/s. Kerala State Electricity Board to forthwith restore power. 5. Pursuant to the said order, the Resolution Professional deposited the amount of ₹ 3.25 Crores in the Escrow Account. The Resolution Professional informed that the entire ₹ 3.25 Crores need not be paid because the payments made by him (on behal .....

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..... agon Steels as on 15th September, 2017 had an outstanding payment of ₹ 2,60,47,669 (Rupees Two Crores Sixty Lakhs Forty-Seven Thousand Six Hundred and Sixty-Nine only) owed to Kerala State Electricity Board . As on 15th September, 2017, it had also outstanding payment of ₹ 64,78,610 (Rupees Sixty-Four Lakhs Seventy-Eight Thousand Six Hundred and Ten) to Kerala State Electricity Board . The Corporate Debtor was constrained to make payment to Kerala State Electricity Board towards electricity supply for the period prior to Corporate Insolvency Resolution Process of ₹ 2,60,47,669 (Rupees Two Crores Sixty Lakhs Forty-Seven Thousand Six Hundred and Sixty-Nine only) and ₹ 64,78,610 (Rupees Sixty-Four Lakhs Seventy-Eight Thousand Six Hundred and Ten) to keep the Corporate Debtors as going concern and to avoid the electricity disconnection. 11. It was submitted that the 1st Respondent- Mr. R. Venkatakrishnan, vide publication on 24th September, 2017 of public announcement in Form-A in terms of Section 15 of the I&B Code , called upon all the creditors of the Corporate Debtors to file their respective claims on or before 08th October, 2017. However, despite due p .....

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..... , 2018 towards pre Corporate Insolvency Resolution Process period. 15. Thereafter, despite due payment of the outstanding electricity dues and its due intimation to the Resolution Professional on 8th October, 2018, the Electricity Board failed to restore electric supply which had been disconnected since July, 2018, which was restored pursuant to interim order passed by the Adjudicating Authority on 26th October, 2018 subject to deposit of ₹ 3.25 Crores in an Escrow Account. 16. It was submitted that the Electricity Board being a provider of electricity services to the Corporate Debtor , squarely falls under the definition of Operational Debt as per section 5(2 ) of the I&B Code . Thus, by virtue of the above definition the Resolution Professional ought to have submitted its claims in accordance with the provisions of the I&B Code applicable to the Operational Creditors . By not doing so, the Resolution Professional has acted arbitrarily by lowering the pool of funds available for meeting Corporate Insolvency Resolution Process costs. 17. Similar plea has been taken by Mr. R. Venkatkrishnan, Resolution Professional in his appeal. 18. According to 2nd Respondent- Kerala .....

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..... to disconnect the electricity which is in violation of Section 14(2) of the I&B Code . 24. If any amount due for the period of the Corporate Insolvency Resolution Process was not paid, in such case, Electricity Board should have moved before the Adjudicating Authority for payment of current dues of Corporate Insolvency Resolution Process , but it had no jurisdiction to disconnect the electricity in violation of Section 14(2) of the I&B Code . 25. The Electricity Board provides services by supplying electricity and thereby comes within the meaning of Operational Creditor as defined under Section 5(20) read with Section 5(21) of the I&B Code . 26. Similar matter fell for consideration before this Appellant Tribunal in Uttrakhand Power Corporation Ltd. v. M/s. ANG Industries Ltd.─ Company Appeal (AT) (Insol.) No. 298 of 2017 wherein this Appellate Tribunal taking into consideration the fact that the order of Moratorium had been passed held that Uttarakhand Power Corporation Limited cannot recover any amount as was due for the earlier period prior to the date of initiation of Corporate Insolvency Resolution Process , though it was entitled to submit the claim before t .....

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