Electricity Connection Can't Be Denied To Purchaser Of Corporate Debtor's Properties Due To Past Dues When Claims Are Filed Before Liquidator: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench of Justice Ms. Lakshmi Gurung and Sh. Hariharan Neelakanta Iyer, Technical Member has held that electricity connection cannot be denied to the successful auction purchaser of the corporate debtor's properties on account of past dues, when such claims have already been filed before the Liquidator and will be addressed as per Section 53 of the IBC. The present application has been filed under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) by the Successful Auction Purchaser against Madhya Pradesh Paschim Kshetra Vidyut Vitaran (R-1) seeking direction to the Respondent not to withhold the electricity connection for dues prior to issuance of the sale certificate. The Applicant submitted that Upon sale of the property of the corporate debtor, the payment would be distributed to the stakeholders in accordance with the provisions of Section 53 of the Code and accordingly the dues of the R-1 would stand settled upon distribution of the assets of the corporate debtor. The Respondent submitted that the above properties have been sold on “As is where is basis”, “as is what is basis”, “whatever there is basis” and “No recourse basis”. Therefore, the purchase properties were transferred to the applicant along with the liabilities of electricity dues of Rs. 99,49,857/-. Therefore, the successful purchaser has to deposit the transfer amounts. The Tribunal held that once the claims are filed by the Statutory Authorities before the Liquidator, the claims must be dealt with in accordance with waterfall mechanism under section 53 of the IBC. The electricity connection cannot be denied by the Authority to the successful auction purchaser of the corporate debtor's properties over past dues when the claims have already been filed by it which will be addressed as per the provisions of the IBC. Accordingly, the present application was allowed. Case Title:IDBI Bank Ltd. VS S Kumars Nationwide Ltd. Case Number:I.A. 857/2024 I.A. 860/2024 I.A. 3446/2024 I.A. 446/2021 In C.P. (IB)294(MB)/2018 Order Date: 23/07/2025 Click Here To Read/Download The Order

Electricity Connection Can't Be Denied To Purchaser Of Corporate Debtor's Properties Due To Past Dues When Claims Are Filed Before Liquidator: NCLT Mumbai

Mohd Malik Chauhan

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