TaxTMI 
TaxTMI 
2022 (8) TMI 710
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....ion (for short DVC) is not complying with the same and this is causing prejudice to the applicant. 3. It is submitted by the applicant/Corporate Debtor that Respondent No. 1 DVC is engaged, inter alia, in the generation and transmission of industrial power which is supplied in bulk at a competitive rate to the industries including the applicant and Respondent No. 2 to 4 are the senior most management of the team of DVC and Respondent No. 5 to 8 are the Senior Executive of DVC having control or charge over the issues involved between the applicant and DVC. 4. It is submitted that this Adjudicating Authority had admitted a section 7 application filed by Citi Bank NA, the Financial Creditor, initiating CIRP of the Corporate Debtor in which the Resolution plan was approved by this Adjudicating Authority. It is further submitted that after the resolution plan was approved, the new management of the applicant was formed with the newly constituted Board of Directors to run, manage and continue the affairs of the applicant and its business. The applicant has been a consumer of Respondent No. 1 in respect of the Barjora Factory of the applicant and has been drawing electricity for Barjora....
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....unced national lockdown and all industrial and manufacturing activities and other businesses all over India were closed for several months. Thereafter, the applicant took all necessary measures to pay the balance outstanding dues of Respondent No. 1 but due to some unavoidable circumstances, the applicant was unable to make payment of the two instalment as per the payment schedule. The applicant made several requests to Respondent No. 1 not to raise any claim or demand for payment of any amount on account of old dues over and above the same which had already been settled and finalized under the Resolution Plan being Rs. 24.67 crores but despite that Respondent No. 1 continued to insist upon its purported demand of an exorbitant sum of Rs. 104.92 Crores and relating to the period before the sanction of the Resolution Plan even though Respondent No. 1 was fully aware that such amount is not payable in terms of the resolution plan and the same is binding upon Respondent No. 1 and other respondents. It is submitted that there are mistakes in the bill generated by Respondent No. 1 as on 01.01.2021, which requires rectification. 10. It is submitted that Respondent No. 1 proceeded to rec....
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....th section 74(3) of the IBC, 2016. 13. It is submitted that by the aforesaid Advocate's letter dated 26.07.2021, the Respondents have been called upon not to seek any amount over and above the Settled Old Dues of Rs. 24.67 Crores and revise the bill generated by Respondent No. 1 on 01.01.2021 (sent by Respondent No. 1 to the Applicant as an attachment to Respondent No. 1's email dated 03.07.2021) giving effect to the Resolution Plan and also correcting the amount receivable as per the calculations given above and adjust the current payable dues from the amount receivable by the Applicant and send the same to the Applicant immediately and the Respondents have been requested to act strictly in compliance of the directions contained in the Resolution Plan as approved by this Adjudicating Authority by its order dated 11.10.2018 which is binding upon Respondents and to restore/reconnect the Electricity supply to Barjora Factory of the Applicant immediately and informed that the illegal disconnection and the act of non-reconnection by the Respondents has put the Applicant in great jeopardy and is causing severe damage to the Applicant which tend to make the Applicant more sick a....
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....s. 5.87 crore. The said total claim of DVC was taken into consideration in pegging and allowing the claim of Rs. 24.67 crore. 18. It is submitted that under the Resolution Plan, the successful resolution applicant was directed to pay the said amount of Rs. 24.67 in the following manner, which are as under:- i. Upfront payment within thirty days Rs. 4.93 Crore ii. Payment before 31st March,2020 but Before 31st March, 2021 Rs. 4.93 crore iii. Payment after 31st March, 2020 but Before 31st March ,2021 Rs. 4.93 crore iv. Payment after 31st March 2021 but Before 31st March,2021 Rs. 4.94 crore v. Payment after 31st March 2022 but Before 31st March 2023 Rs. 4.94 Crore 19. It is further submitted by the respondent that in violation of the Resolution Plan, the successful resolution applicant failed to pay the initial payment of Rs. 4.93 crore within the period of thirty days. Within the said period, i.e. 9th November, 2018, only a sum of Rs. 2.25 crore was paid. The balance payment was made subsequently by 11th December, 2018. 20. It submitted that moreover, post approval of the resolution plan, there is a default in making payment of the electricity bills on and from the mont....
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....lectricity supply and continue the same without insisting on payment of deposits, arrear security deposit, as has been stated in the approved plan. The said appeal is pending. Notwithstanding pendency of the appeal DVC had reconnected the supply of electricity but the same had to be subsequently disconnected for the reasons stated above. 23. It is submitted that the controversy has arisen as DVC has issued a revised bill pursuant to the orders of the West Bengal Electricity Regulatory Commission dated 19th March 2020 and 19th June 2020 respectively. By its order dated 19th March 2020, the West Bengal Electricity Regulatory Commission has issued the Tariff Order for the period 2009 to 2013 and by the subsequent order dated 19th June 2020, the Commission has issued a Tariff Order for 2006 to 2009. Accordingly, DVC had issued a revised bill for the purpose of its record, whereby the claim of DVC for the aforesaid tariff periods, namely 2006 to 2009 and 2009 to 2013 stood reduced to Rs. 56.67 crore approximately. According to the applicant, though they are not liable to pay the dues of DVC in terms of the said bill, they are seeking adjustment of the refund. 24. It is further submitt....
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....nue any proceedings in respect of a claim which is not part of the resolution plan. 26. It is submitted that in any event, according to the applicant, they are trying to enforce their selective right while trying to contend that the claim insofar as DVC is concerned is frozen, but they are trying to enforce the right to adjustment which arise out of the same transaction. It is submitted with respect that the law is well settled. Once the resolution plan is approved, the respective claims and counter claims stand frozen. Any claim beyond the resolution plan stands extinguished and Section 31(10) of the IBC, 2016 does not permit initiation or continuance of proceedings in respect of a claim which is not part of the resolution plan. 27. It is submitted that the applicant is seeking adjustment of certain payments and/or amounts which are shown in the bill raised by DVC as on 1st January 2021 which are beyond the resolution plan and therefore, the law does not permit the applicant to claim any adjustment in respect of the said claim which is beyond the resolution plan. Similarly the law do not permit DVC to claim any amount beyond the resolution plan. 28. It is submitted that Section....
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.... of arguments, Ld. Counsel for the applicant submits that out of the total amount of Rs. 24.67 crores, which was to be paid to the Respondent in 5 yearly installments. Out of which, four installments have already been paid and 5th installment is due on 31st March, 202, the DVC/Respondent No. 1 did not challenge the Resolution Plan and has already accepted the entire amount. It is submitted that after the resolution plan was approved, the Hon'ble High Court had passed an order on 3rd December, 2018 confirming the tariff order published on 19th March, 2020. In terms of the said order of the Hon'ble Supreme Court, the applicant has become entitled to receive a principle refund of Rs. 49.98 crores plus interest of Rs. 42.35 Crores calculated up to May, 2022 and further interest from DVC continuing to base its original claim of Rs. 64.44 crores and further revising its claim to Rs. 120 Crores by adding undue amounts along with interest thereon for the period prior to the approval of Resolution Plan and not accepting the amount crystallized under the resolution plan which stood Rs. 24.67 crores and is not making necessary adjustments in its systems whereby inflated bills and exor....
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....period 2006-2009 and 2009-2013. v. In the reply affidavit filed by the DVC, it has admitted that its claim has been frozen at Rs. 24.67 crores which is binding and that the claim of the DVC for the tariff Period of 2006-09 and 2009-13 has stood reduced (para (n) at page 8 and para 8 at page 13 of the reply). vi. However, while accepting the reduction in the tariff rate for the aforesaid periods, DVC is now seeking to adjust the amount which is refundable to the applicant from inflated demand of Rs. 120 Crores raised vide bill dated 01.01.2021 issued vide mail dated 3rd July, 2021 on the mail id. of our representative. This inflated amount of Rs. 120 Crores includes original claim of Rs. 64.4456 crores filed by DVC in From-B to the resolution professional and other undue amounts claimed to be pertaining to the period prior to NCLT Order dated 11th October, 2018 and there on adding huge interest on that amount. In spite of the amount crystallized under the plan being Rs. 24.67 Crores. This is the real bone of contention. vii. Both DVC and the Applicant are ad-idem on the issue that the applicant is entitled to benefit of reduced tariff in view of WBERC order, but the amount whi....
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.... resolution plan. The bill at page 275 of the petition, is meant for internal adjustment of accounts of DVC so that at the stage of truing up of accounts by the WBERC, the actual bad debt suffered by DVC is correctly reflected after adjustment of electricity tariff. 36. It is submitted that DVC had submitted the aforesaid claimed before the Resolution Professional in two parts, namely (i) pre CRIP claim to the extent of Rs. 64.44 crore and (ii) the claim during CIRP amounting to Rs. 5.87 crore. 37. It is submitted that by a Judgment and order dated 1st October, 2021, the Hon'ble National Company Law Appellate Tribunal was pleased to interfere with the order dated 20th November, 2019 and clarified that any security deposit or other charges for requested increase in contract demand and enhanced supply line for electricity will have to be paid to the discom DVC in accordance with the relevant and extant laws and regulations. The payment of dues for electricity supplied to the Corporate Debtor during the moratorium period, to keep the corporate debtor as a going concern, was directed to be paid out of CIRP costs, and the payment was directed to be ensured by the Resolution Profes....
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....lan stands reduced to Rs. 24.67 crores. Therefore, DVC is entitled to claim the difference as bad and doubtful debt for accounting purpose before the Commission under 2011 Regulation. 41. It is stated that as already stated above, the bill dated 1st January, 2021 was not served and/or raised upon the Applicant and is meant for adjustment of internal accounts of DVC in view of the approved resolution plan and is meant to finalize the bad and doubtful debt only as such the question of demanding or claiming the same and/or consequent violation of the approved resolution plan does not and cannot arise. 42. It is submitted that in exercise of raising the bill dated 01.01.2021 became necessary for adjustment of bad and doubtful debt relating to the corporate debtor. The resolution plan allowed Rs. 24.67 crores only, leaving out the balance claim of DVC which had to be written off as bad debt. The adjustment of accounts was necessary to arrive at the actual figure of bad debt. Under West Bengal Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2011, Chapter 5 lays down the General principles for computing cost and return. Regulation 5.10 is to the extent as....