TMI Blog2022 (9) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation as well as Section 14(2-A) is same, that is, all benefits, which were enjoyed by the Corporate Debtor given by Government or authority should be continued, but subject to condition that there is no default of payment of current dues. Sub-section (2-A) also envisage continuation of the essential supply and provides for such termination, suspension or extension when payment has not been made for the such supply during the moratorium - Sub-section (2) of Section 14 has to be read with the legislative intent, which is now reflected by Explanation to Section 14(1) and 14(2-A). In the facts of the present case, when Corporate Debtor took a decision that supply of electricity is necessary to make the value of Corporate Debtor as has been specifically pleaded, the Corporate Debtor is obliged to make payment. When the Corporate Debtor has opined that supply of electricity is essential and is to be continued by the Respondent, it is also under obligation to make payment of electricity dues of the CIRP period and direction issued by the Adjudicating Authority to make the payment of outstanding dues, cannot be faulted. The direction of Adjudicating Authority to continue the DFA, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e MSEDCL informed by letter dated 09.07.2021 about its intention not to renew the DFA and that it intends to take over the Distribution Franchisee of M/s Lavasa Corporation Limited at the earliest. (iii) The Corporate Insolvency Resolution Process ( CIRP ) against the Corporate Debtor was commenced by an order dated 30.08.2018 passed by the Adjudicating Authority on an Application filed by an Operational Creditor Raj Infrastructure Development (India) Pvt. Ltd. The Appellant was appointed as Resolution Professional. The Appellant requested to the MSEDCL to continue the DFA as an interim arrangement till the Resolution Applicant took over the Corporate Debtor. The notices dated 09.07.2021 and 19.07.2021 were issued by the Respondent declaring its intention not to renew the DFA of the Corporate Debtor and to take over the Distribution Franchisee. (iv) An IA No.1661 of 2021 was filed by the Resolution Professional before the Adjudicating Authority on 22.07.2021, by which IA, following prayers were made by the Respondent: a to quash and set aside the Impugned Notices dated 9th July, 2021 and 19th July, 2021 issued by the Respondent; b. To pass an order restrainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itors ( CoC ) and is pending consideration before the Adjudicating Authority and the Plan shall contemplates payment of residuary dues also. It is submitted that the Adjudicating Authority was not entitled to issue direction to pay electricity dues of during CIRP period because the said amount can only be paid as per Resolution Plan, after the Plan is approved. The Adjudicating Authority had no jurisdiction to direct for payment of electricity bills during CIRP period and the impugned order is unsustainable. It is submitted that Section 14, sub-section (2) of the Code provides that supply of essential goods and services to the Corporate Debtor shall not be terminated or suspended or interrupted during the moratorium period, which provides an unconditional protection to the Corporate Debtor. The provision of Section 14 (2) is distinguishable to provision of Section 14 (2-A). 5. The learned Counsel for the Respondent refuting the submissions of the learned Counsel for the Appellant contends that in the present case the Adjudicating Authority has compelled the Respondent to supply the electricity and continue with the DFA during moratorium period, hence the payment of electricity d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021 makes it clear that continuation of the electricity supply was necessary to maintain the value of the Corporate Debtor. 8. We need to notice the provisions of the Code to find out as to whether the Respondent, who was directed to supply the electricity was entitled to claim payment of electricity dues during CIRP period or the Respondent had to wait till the resolution of the CIRP of the Corporate Debtor to receive its dues. Section 14, sub-section (2) provides for supply of essential goods or services to the Corporate Debtor shall not be terminated or suspended or interrupted during the moratorium period. Section 14(2) is as follows: 14(2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. 9. Section 14(1) has been amended by Act 1 of 2020 and explanation of Section 14(1) and sub-section 14(2A) as inserted by Act 1 of 2020 is as follows: 14(1) Explanation.-For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a licence, permit, registration, quota, concessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the successful resolution applicant subject to fulfilment of certain conditions, and in order to fill the critical gaps in the corporate insolvency framework, it has become necessary to amend certain provisions of the Insolvency and Bankruptcy Code, 2016. 11. When we look into the Statement of Objects and Reasons as extracted above, one of the object as expressly recorded was in order to fill the critical gaps in the corporate insolvency framework . Explanation to sub-Section (1) of Section 14 and insertion of sub-section (2-A) of Section 14 was with the object to fill the critical gap in the corporate insolvency framework. Section 14, sub-section (2) as contained in the Code only provided for supply of essential goods or services to the Corporate Debtor contained an indication that supply of essential goods or services to the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period, brought a substantive provision that when Interim Resolution Professional or Resolution Professional consider the supply of goods or services critical to protect and preserve the value of the Corporate Debtor, the same shall not be terminated or suspended ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
