TMI Blog2022 (3) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... of pending old dues whose claim has been submitted to Resolution Professional during CIRP and which have been taken care of in the resolution plan and clause (f) directs DVC to commit supply of power to the plant of CD immediately after the Effective Date - the Impugned Order directs SRA to apply for fresh connection with payment of security deposit that may be admissible under WBERC Regulations and DVC shall have to grant temporary connection within 10 days of its order after payment of security deposit. As the issue regarding legality of the resolution plan is being dealt with in CA (AT)(Ins) No. 111 of 2019 we are limiting our consideration in this appeal to the propriety of order directing DVC to grant new temporary connection to DVC after payment of security deposit. The commitment to supply power to the corporate debtor should be in accordance with the WBERC Regulations made under the Electricity Act. Clause (g) above, which directs DVC to ensure availability of continuous power to the plant at the same rate at which it is supplied power to the adjoining units, will have to be modified since the conditions that are applicable for supplying power to the corporate debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electricity supply to the successful resolution applicant. The Appellant/DVC is aggrieved by this order in that while his appeal CA (AT)(Ins) 1111 of 2019 is pending consideration before the NCLAT, wherein he has assailed the approval of the resolution plan, the Adjudicating Authority has provided a final relied in the form of direction for providing new connection to the successful resolution applicant. 3. The facts of the case, as stated and argued by the Appellant/DVC, are that the Appellant/DVC entered into a Power Purchase Agreement with Corporate Debtor Kharkia Steels Pvt. Ltd. (Respondent No. 1) on 28.7.2009. Due to large quantum of unpaid dues, a notice of disconnection of power supply was sent by the DVC vide letter dated 12.8.2015 to the corporate debtor. Thereafter in September 2019, Dena Bank, a Financial Creditor filed an application under section 7 of the IBC for initiation of Corporate Insolvency Resolution Process (in short CIRP ) of the Corporate Debtor, which was admitted vide order dated 26.9.2019 of the Adjudicating Authority. Upon completion of the CIRP, the Resolution Plan proposed by Amritvani Exim Private Limited was approved by the Committee of Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply in the same premises are covered under the WBERC Regulations and this right of DVC cannot be taken away through the approved resolution plan. 7. I this regard the Learned Sr. Counsel for Appellant has also referred to the judgments of Hon ble Supreme Court in the matters of M/s. Embassy Property Developments Private Ltd. Vs. State of Karnataka and Ors. (2019 SCC OnLine SC 1542) and Gujarat Urja Vikas Nigam Limited Versus Amit Gupta Ors [2021 SCC OnLine SC 194] to claim that the contract relating to Power Purchase Agreement ought to adjudicated under the Electricity Act and related WBERC Regulation and the jurisdiction of NCLT is barred from considering such disputes. 8. In reply, the Learned Senior Counsel for Respondents No. 1 and 3 has argued that DVC is an operational creditor which has been treated in accordance with provisions of IBC regarding its past dues which relate to the period prior to initiation of CIRP. He has also pointed out that the liquidation value of the corporate debtor is about ₹ 6.52 crore and looking to the liquidation value, the share of operational creditors has been decided in accordance with section 30(2)(b) of the IBC. He has referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of past dues, the Learned Senior Counsel for Respondent has cited the judgment of Hon ble Supreme Court in the matter of India Resurgence ARC Private Limited vs. Amit Metaliks Ltd. Another (2021 SCC Online SC 409) to emphasize that the business decision taken in exercise of the commercial wisdom of Committee of Creditors cannot be interfered with unless creditors belonging to a class being similarly situated are denied fair and equitable treatment. He has also referred to para 20 of the India Resurgence judgment (supra)to argue that asking for past dues and security is inapt and ill conceived. Thus, the Learned Senior Counsel for Respondents has argued that since the Resolution Plan has been finalized and approved by the Adjudicating Authority and does not suffer from any legal infirmity, the relief granted by the Adjudicating Authority in directing the DVC to provide new connection to SRA is in accordance with the approved resolution plan. 11. The main issue in this appeal is whether the relief granted by the Adjudicating Authority directing the DVC to provide new connection to the SRA after payment of the security deposit could have given by the Adjudicating Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DVC should acknowledge that its dues from the CD is restricted to the settlement amount proposed under section 6.6.5 of section II of part B (financial plan) of this regulation plan and shall issue a certificate to the CD to that effect. c. DVC should not raise any further demand on account of dues prior to the Effective Date. d. DVC should restore the power connection immediately after the Effective Date and shall not withhold/disconnect the Power supply on the ground of pending old dues prior to the Effective Date. e. DVC should withdraw all legal cases filed, if any, immediately after the Effective Date. f. DVC to commit supply of power to the plant of CD immediately after the Effective Date. g. DVC should ensure availability of continuous Power to the Plant at the same rate at which it is supplying power to adjoining units. 14. We note that the liabilities of DVC that relate to past dues prior to the Effective Date have been extinguished under the approved Resolution Plan and DVC is prohibited from raising any further demand on this account. The clause (d) in Para 6 Section VI of the Resolution Plan directs DVC to restore the power connection immed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of continuous power to the plant at the same rate at which it is supplied power to the adjoining units, will have to be modified since the conditions that are applicable for supplying power to the corporate debtor under a new agreement shall be at the tariff rate and conditions that would prevail at the time of signing of the agreement for a fresh connection by DVC with the Successful Resolution Applicant under WBERC Regulations. 18. The import of various judgments cited by the Ld. Senior Counsels of Appellant and Respondents vis- -vis the approval of the resolution plan is included in the judgment in CA (AT)(Ins) No. 1111 of 2020 and insofar as the issue in this appeal is concerned, we do not consider discussion of these judgments relevant in this appeal. 19. Therefore the Impugned Order which directs a new temporary connection to be provided to the SRA within ten days of application after payment of requisite security deposit cannot be faulted, since this direction is in accordance with the provisions contained in the Successful Resolution Plan and it is now decided in CA (AT) (Ins) No. 1111 of 2020 that the successful resolution plan suffers from no illegality. We thus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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