TMI Blog2023 (12) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... . Due Diligence Clause also notes that any outstanding charge was also to be performed in the e-auction process by the prospective bidder. The question that electricity dues of the Corporate Debtor who underwent insolvency resolution process/liquidation process can still be insisted against the Successful Resolution Applicant/ Successful Auction Purchaser is not res integra. The issue which has arisen in the present case has been recently considered by this Tribunal in Chinar Steel Segments Centre Pvt. Ltd. vs. Samir Kumar Agarwal [ 2023 (10) TMI 645 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ]. In the above case, an application filed by the Successful Auction Purchaser seeking direction to Damodar Valley Corporation to energize its electricity connection, was rejected relying on WBERC Regulation. Appeal was filed by the Successful Auction Purchaser which appeal was ultimately allowed by this Tribunal directing that fresh connection be granted without charging any outstanding dues of the Corporate Debtor. It is relevant to notice that the submission which has been advanced by the Appellant that the application filed by the Successful Auction P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is and without recourse basis. (iv) E-auction was held on 29.08.2020 and Respondent No.1 was held to be highest Bidder for an amount of Rs.3,78,00,000/-. The Respondent No.1 was declared as Successful Auction Purchaser by the Liquidator by email dated 29.08.2020. (v) On 25.09.2020, the Respondent No.1 deposited the entire sale consideration along with the GST. Sale Certificate dated 28.09.2020 was issued as well as Possession Certificate. (vi) The Respondent No.1 made an application to the Appellant for new electricity connection for the premises, which was rejected by the Appellant on the ground that there is demand of electricity dues of Rs.39,15,625/- against the erstwhile Corporate Debtor and unless the said amount is paid no new electricity connection can be given. (vii) After rejection of the prayer of new electricity connection, the Successful Auction Purchaser i.e. Respondent No.1 filed an C.A. No. 219/2022 in the CP (IB) No.140/ALD/2017, in which following prayers were made: a) Allow the present application; b) Kindly, pass an ex parte ad interim order directing Paschimanchal Vidyut Vitran Nigam Ltd. Not to take any coercive steps over the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No.1 as under: (i) To complete the documentation with Applicants on the basis of Application dated 28.11.2021 submitted by the Applicant No.2 in the office of Respondent No.1 and energise the electricity connection in terms of Electricity Act, 2003 without insisting on the payment of pre-CIRP dues. (ii) Applicants shall otherwise complete all the requirement in terms of Electricity Act 2003 for getting new electricity Connection. (x) The Appellant aggrieved by the said order has come up in this Appeal. 2. We have heard Shri Pradeep Mishra, learned counsel for the Appellant and Shri Kunal Godhwani, learned counsel appearing for Respondent No.1 and 2. 3. Learned counsel for the Appellant challenging the impugned order submits that the Adjudicating Authority committed error in allowing the I.A. 219/2022. He submits that after liquidation process was closed by issuing Sale Certificate in favour of the Respondent No.1, application 219/2022 filed by the Respondent No.1 before the Adjudicating Authority was not maintainable since the Adjudicating Authority has become functus officio. It is further submitted that the E-auction notice clearly contemplate sale on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h) of the E-auction notice which dealt with due diligence. Clause (h) is as follows: H. DUE DILIGENCE The Liquidator shall endeavor to provide necessary assistance, facilitating the conduction of due diligence by interest Bidders. The information and documents shall be provided by the Liquidator in good faith. The properties and assets of the Company are proposed to be sold on As Is Where Is, As Is What Is, Whatever There Is and Without Recourse basis and the proposed sale of assets of the company does not entail transfer of any title, except the title which the Company has on the assets as on date of transfer. All taxes/ maintenance fees/ outstanding rentals/ electricity/ water charge/ annual lease rentals/ unearned income in case of leasehold properties, etc., if any outstanding as on date or yet to fall due in respect of the relevant asset should be ascertained by the E-Auction process applicant and would be borne by the successful bidder. 7. There can be no dispute between the parties that the sale in the liquidation process was on As Is Where Is, As Is What Is, Whatever There Is and Without Recourse basis . Due Diligence Clause also notes that any outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o file its claim against the electricity dues outstanding towards the Corporate Debtor who was undergoing liquidation process. The above judgment is thus clearly distinguishable in the facts of the present case. 10. The Judgment of Hon ble Supreme Court in Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Ltd. Ors. (Supra) which has been referred by learned counsel for the Appellant was a case where the Adjudicating Authority has directed District Magistrate and Tehsildar, Muzaffarnagar to release the property which was attached by Paschimanchal Vidyut Vitran Nigam Ltd. for realisation of its dues, for enabling the sale under IBC process. A bill was issued by the Appellant on the Corporate Debtor and District Magistrate issued notice for recovery of outstanding dues and attached assets of the Corporate Debtor. The Liquidator pleaded that unless attachment orders are not set aside, no buyer would purchase the property of the Corporate Debtor. The Appellate Tribunal directed the District Magistrate and Tehsildar, Muzaffarnagar to release the property to enable sale of property and after realisation of the property s value to ensure its distribution to various stak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not consider it appropriate to rule on the submissions of the liquidator vis-a-vis the fact of non-registration of charges under Section 77 of the Companies Act, 2013. V. CONCLUSION 60. For the above reasons, it is held that the appeal deserves to fail. At the same time, the liquidator is directed to decide the claim exercised by PVVNL in the manner required by law. It shall complete the process within 10 weeks from the date of pronouncement of this decision, after providing such opportunity to the appellant, as is necessary under law. 12. The above judgment in no manner support the submission of the Appellant advanced in this case rather the said judgment mentions it clearly that claim of the electricity dues of the Appellant is to be raised in the IBC process when Corporate Debtor is in the liquidation process. 13. The issue which has arisen in the present case has been recently considered by this Tribunal in Company Appeal (AT) (Insolvency) No. 1355 of 2022, Chinar Steel Segments Centre Pvt. Ltd. vs. Samir Kumar Agarwal . In the above case, an application filed by the Successful Auction Purchaser seeking direction to Damodar Valley Corporation to energiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors.- Company Appeal (AT) (Ins.) No.961 of 2021 of this Tribunal which judgment has also been relied by the Adjudicating Authority in the impugned order. The Judgment of this Tribunal in Shiv Shakti Inter Globe Exports Pvt. Ltd. vs. KTC Foods Pvt. Ltd. Anr., Company Appeal (AT) (Ins.) No. 650 of 2020 decided on 25.02.2022 also support the submission made by learned counsel for the Respondent. This Tribunal took view that when the Corporate Debtor is sold in the liquidation proceeding, Corporate Debtor cannot be burdened by any past or remaining unpaid outstanding liabilities. In Para 22 of the judgment following has been held: 22. It is no longer Res Integra that while approving a 'Corporate Debtor' sale as a 'going concern' in Liquidation Proceedings without its dissolution in terms of Regulation 32(e) of the Liquidation Process Regulations, 2016, it is essential to see that the 'Corporate Debtor' is not burdened by any past or remaining unpaid outstanding liabilities prior to the sale of the Company as a 'going concern' and after payment of the sale proceeds distributed in accordance with Section 53 of the Code. The Impugned Order in I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mechanism, for grant of an electricity connection. However, the successful resolution applicant will have to comply with the other requirements for grant of electricity connection. The clean slate principle would stand negated if the successful resolution applicant is asked to pay the arrears payable by the corporate debtor for the grant of an electricity connection in her/his name. In Embassy Property Developments Private Limited vs. State of Karnataka and Others , this Court clarified that a decision by public authority etc. may fall within the jurisdiction of the tribunals constituted under the Code, where the issue relates to or arises out of the dues payable to an operational or financial creditor, by observing: 37...It will be a different matter, if proceedings under statutes like Income Tax Act had attained finality, fastening a liability upon the corporate debtor, since, in such cases, the dues payable to the Government would come within the meaning of the expression operational debt under Section 5(21), making the Government an operational creditor in terms of Section 5(2). The moment the dues to the Government are crystallised and what remains is only paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove. The Appellant has made out a case for grant of reliefs as claimed in the application. In result, we allow the Appeal in following manner:- The impugned order dated 01.09.2022 is set aside. IA No.984 of 2021 is allowed. Respondent No.1 to grant fresh connection of electricity after taking all necessary charges for fresh connection except outstanding dues of the Corporate Debtor which stood satisfied and extinguished as per the liquidation proceedings against the Corporate Debtor. 18. We, thus, are of the view that submission raised by learned counsel for the Appellant that Successful Auction Purchaser was liable to pay the arrears of electricity dues which were dues of the erstwhile Corporate Debtor and without payment of said dues electricity connection cannot be granted are not in accord with the statutory scheme of IBC. The Adjudicating Authority did not commit any error in issuing direction in Para 16 of the impugned order, as extracted above, to energise the electricity connection without insisting on the payment of pre-CIRP dues. It is made clear that the Successful Auction Purchaser shall be liable to pay all dues for getting the new connection except the arrea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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