TMI Blog2022 (5) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... idator, details of the claim submitted by the Appellant has been given. When in the IBC proceedings, the Appellant has lodged his claim before the Liquidator pertaining to pre-CIRP dues, the same has to be dealt with as per the provisions of the Code. Pre-CIPR dues of the Appellant have been treated as operational debt and the same required to be paid as per Section 53 of the Code - the Appellant is entitled to receive pre-CIRP dues as per provisions of section 53. Hence, the Appellant cannot be heard in contending that he should realize the said amount from the Successful Auction Purchaser. The claim of the Appellant to realize the pre-CIRP dues from Successful Auction Purchaser is clearly in conflict of the statutory scheme as laid down in the Code. The submission of the Appellant that they are entitled to recover the entire pre-CIRP and post-CIRP dues from the Successful Auction Purchaser i.e. Respondent No. 1 cannot be accepted. The Adjudicating Authority did not commit any error in issuing the directions as contained in the order dated 05.10.2021. The Appellant is entitle to claim its electricity dues both pre-CIRP and post-CIRP in accordance with Section 53 of the Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Respondent No. 1 that Liquidator may be directed to pay electricity charges as per Section 53 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as IBC ). After the aforesaid order, the Liquidator confirmed the auction and issued a Sale Certificate dated 16.09.2021. iii. The Respondent No. 1 preferred I.A. No. 748 (KB) 2021 before the Adjudicating Authority seeking restoration of electricity supply to the premises of Corporate Debtor. The Adjudicating Authority on 06.09.2021 recorded that the Applicant Respondent No. 1 proposes to deposit a sum of Rs.20 Crores plus whatever charges are applicable to energize the connection from the Grid to the premises in question. The Adjudicating Authority directed that on deposit of Rs.20 Crores, the Appellant shall take necessary steps to energize the connection. However, this order dated 06.09.2021 was without prejudice to the rights and contentions of the parties in the application. In the Application a Reply was filed by the Appellant. Appellant opposed the application stating that Respondent No. 1 is liable to pay all outstanding dues of the Corporate Debtor as per Regulation 8.4 of the General Terms and Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Learned counsel for the Appellant challenging the order impugned contends that the Respondent No. 1 was liable to pay the entire outstanding dues of the Corporate Debtor both pre-CIRP dues and CIRP dues which is statutory requirement as per Regulation 8.4 of General Terms and Conditions of Supply. Total dues of the Appellant of pre-CIRP was Rs.28,34,90,801/- and during the CIRP the dues are Rs.20,72,84,722/- and the Respondent No. 1 entitled to have electricity connection only after clearing the aforementioned two amounts. Respondent No. 1, who is Successful Auction Purchaser, prays for fresh connection in the same premises, hence, he is liable to clear the entire dues. It is further submitted that the issues raised in this Appeal are fully covered by the judgment of Hon ble Supreme Court dated 01.06.2020 in Civil Appeal No. 1815/2020 Telangana State Southern Power Distribution Company Ltd. Anr. vs. M/s Srigdhaa Beverages 4. Shri Abhijeet Sinha, learned counsel for the Respondent No. 1 refuting the submissions of learned counsel for the Appellant submits that the Respondent No. 1 was the Successful Auction Purchaser to the Corporate Debtor which was sold as going con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke any payment to operational claim of Rs.33.24 Crores, which has been informed by the Liquidator to Appellant vide email dated 05.06.2021. In so far as CIRP Cost of Rs.19.19 Crores is concerned, in the list of unpaid Creditors as handed over to the Liquidator name of Appellant is not appearing. 6. We have considered submissions of learned counsel for the parties and perused the record. 7. The question to be answered in the present Appeal is: Whether the Respondent No.1, the Successful Auction Purchaser in the liquidation proceeding of the Corporate Debtor, is liable to pay electricity dues due on the Corporate Debtor both pre-CIRP and during the CIRP? 8. The Liquidator has auctioned the Corporate Debtor as a going concern which is clear from the e-auction notice issued by the Liquidator for sale as going concern. E-auction notice published in the newspaper dated 28.05.2019 contain following heading: NOTICE FOR GOING CONCERN SALE (GCS) UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016 E-AUCTION SALE NOTICE 9. The Respondent No. 1 has given highest bid of Rs.68.25 Crores. There was brief litigation pertaining to auction sale which culminated into Joint Agreement of Sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing effect:- 1. Pre-CIRP dues as on 09.03.2018 a. Arears in respect of Corporate Debtor =19,76,57,061/- b. Deemed consumption charges for the Financial Year 2015-16 =13,48,33,740/- 2. Dues during CIRP period =20,72,84,722/- The dues, thus, are in two parts; firstly, prior to CIRP i.e. as on 09.03.2018 and secondly, during the CIRP process. The present is the case where the Corporate Debtor has been sold as going concern under liquidation proceeding under IBC. 12. The IBC provides for detailed procedure and provisions for dealing with the claims of the creditors which are against the Corporate Debtor who is facing insolvency/ liquidation. Under Section 35 of the Code, the Liquidator is obliged to verify the claims of all the creditors. Section 36 deals with liquidation estate. Under Section 38, Liquidator has to receive/ collate the claims of creditor within 30 days from the date of commencement of the liquidation process. In the present case, the Appellant themselves has filed their claim befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... post-CIRP. When the claim of the creditors of a Corporate Debtor which is gone into liquidation are specifically dealt in the Code, the Appellant cannot be heard to say that it shall realize its pre-CIRP dues and post-CIRP dues from the Successful Auction Purchaser. Accepting the said argument of the Appellant will be clear in derogation of the scheme for payment of creditors of the Corporate Debtor as delineated in the Code. 15. Now, we come to the judgment of Hon ble Supreme Court in Telangana State Southern Power Distribution Company Ltd. Anr. (supra). The above was the case of Auction Purchaser under SARFAESI Act, 2002. In Para 2 of the Judgment terms and conditions of the sale notice have been captured which is to the following effect:- TERMS AND CONDITIONS . . . . . . 21. The successful bidder shall bear the stamp duties, charges including those of sale certificate, registration charges, all statutory dues payable to central/state government, taxes and rates and outgoing, both existing and future relating to the properties. . . . . . . 24. The property is sold in AS IS WHERE IS, WHAT IS THERE IS AND WITHOUT ANY RECOURSE BASIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are covered as per clause 8.4 of the General Terms Conditions of Supply. 17. It is to be noted that the Hon ble Supreme Court in the above case was considering the Auction Sale under SARFAESI Act, 2002. No provision of IBC were under consideration of the Hon ble Supreme Court. In the IBC proceedings, the electricity supplier is also an Operational Creditor who files claim for its operational debt as well as the charges during the CIRP period. IBC deals with the claims and require for payment of the claim of the electricity service provider under Section 53 of the Code in a liquidation proceeding. Regulation formed under Electricity Act, 2003 fastening liability on the Successful Auction Purchaser in the Liquidation Proceedings will be in conflict with the provision of the IBC. IBC having been given overriding effect under Section 238, any contrary provision in any other statute under Electricity Act, 2003 shall be overridden. Therefore, it shall not be open for the Appellant to contend that Appellant shall recover the entire pre-CIRP and post-CIRP dues from the Successful Auction Purchaser in pursuance of Regulation 8.4, as noticed above. The Appellant is entitled to recove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tribunal again had occasion to consider a case pertaining to electricity dues in insolvency proceeding in Company Appeal (AT) (Insolvency) No. 13 of 2021 decided on 14.03.2022, Damodar Valley Corporation vs. Karthik Alloys Limited Anr. , 2022 SCC OnLine NCLAT 109. This Tribunal held that payment of creditors including Operational Creditors i.e. Electricity Supply Provider shall be dealt with as per the Resolution Plan or Liquidation, as the case may be. In Para 30, this Tribunal laid down following:- 30. We note that the context in the matter of Telangana Southern State Power Distribution Company Limited versus Srigdhaa Beverages (2020 SCC OnLine SC 478) cited by Learned 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
