Claim For Pre-CIRP Dues Not Been Filed, Electricity Department Not Entitled To Recover Such Dues Or To Disconnect Electricity: NCLAT Delhi

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), while adjudicating an appeal filed in Swastik Aqua Ltd. & Anr. v Jharkhand Bijli Vitran Nigam Ltd. & Anr., has held that if the Electricity Department does not file any claim for its pre-CIRP electricity dues, then it is neither entitled to recover the pre-CIRP electricity dues, nor entitled to disconnect the connection of Corporate Debtor over such non-payment. Background Facts Swastik Aqua Ltd. (“Corporate Debtor”) was admitted into the Corporate Insolvency Resolution Process (“CIRP”) on 09.12.2019. Jharkhand Bijli Vitran Nigam Ltd. (“JBVNL”) had been supplying electricity to the Corporate Debtor prior to the CIRP commencement and continued the supply thereafter. There were outstanding bills of JBVNL from pre-CIRP period but no claim was filed after initiation of CIRP with respect to such dues. Thereafter, the Promoters of the Corporate Debtor submitted a Resolution Plan, which was approved by the Committee of Creditors (“CoC”) on 07.08.2020. The Adjudicating Authority also approved the resolution plan on 24.11.2020. However, the resolution plan did not incorporate any provision for payment of JBVNL’s electricity dues for pre-CIRP period. The Monitoring Professional of the Corporate Debtor filed an application before NCLT, seeking (i) direction to JBVNL to reconcile its bills for pre-CIRP period and the same shall be paid out of CIRP costs; (ii) direction to JBVNL to reconcile its bills for CIRP period and the same shall be paid by the Resolution Applicant. The NCLT vide an order dated 02.06.2022 rejected the application, while observing that JBVNL had already reconciled the bills and payments can be made accordingly. The Successful Resolution Applicant (“SRA”) paid the electricity dues of JBVNL accrued during the CIRP period and the issue between the parties was with regard to dues of pre-CIRP period. The SRA filed an appeal before NCLAT against the Order dated 02.06.2022. NCLAT Verdict The Bench opined that the SRA/Monitoring Professional/Resolution Professional were liable to make the payment of the dues during the CIRP period, which according to SRA stood paid. If any amount is still due with regard to the electricity dues during the CIRP period, it shall be open for the Electricity Department to issue bill and realise the same. “We further make it clear that R-1 having not filed any claim in the CIRP regarding pre-CIRP dues, it is not entitled to recover the pre-CIRP dues and on non-payment of the said amount, to disconnect the electricity.” The Bench held that since JBVNL had not filed any claim in the CIRP regarding its pre-CIRP dues, therefore, it is not entitled to recover such dues or to even disconnect the electricity over ground of non-payment of its pre-CIRP dues. Case Title: Swastik Aqua Ltd. & Anr. v Jharkhand Bijli Vitran Nigam Ltd. & Anr. Case No.: Company Appeal (AT) (Insolvency) No. 847 of 2022 Counsel For Appellant: Mr. Milan Singh Negi, Mr. Nikhil Kumar, Advocates Counsel For Respondent: Mr. Kumar Anurag Singh, Mr. Zain A Khan, Advocates for R1 Mr. Abhishek Anand, Mr. Karan Kohli, Mr. A.P.Singh Gaur, Advocates for R-2. Click Here To Read/Download Order

Claim For Pre-CIRP Dues Not Been Filed, Electricity Department Not Entitled To Recover Such Dues Or To Disconnect Electricity: NCLAT Delhi

Pallavi Mishra

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