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SABYASACHI BHATTACHARYYA
Kashvi Power & Steel Private Limited – Appellant
Versus
West Bengal State Electricity Distribution Company Limited – Respondent
JUDGMENT
Sabyasachi Bhattacharyya, J. - The petitioner acquired the respondent no.3 as a going concern in a liquidation sale under the Insolvency and Bankruptcy Code, 2016 (IBC).
The respondent no.1-Electricity Distribution Company, being an operational creditor, filed its claim with the Resolution Professional as well as the Liquidator and a portion of the claim was admitted. However, when the petitioner, being the auction purchaser of the corporate debtor, applied for new electricity connection, the same was refused by the respondent no.1-Distribution Licensee, demanding past outstanding dues against respondent no.3.
2. In such context, the petitioner refers to certain dates.
3. On October 22, 2019, the respondent no.3 was admitted under Corporate Insolvency Process (CIRP) vide an order of the NCLT, Kolkata Bench.
4. On January 5, 2021, on the failure of a resolution plan to materialize, the NCLT passed an order admitting the respondent no.3-Company into liquidation. The claim of respondent no.1 in respect of dues was admitted by the Resolution Professional during the CIRP on June 23, 2020 as well as by the Liquidator, at the stage of liquidation, on January 3, 2022.
5. Vide order date
The main legal point established in the judgment is that the sale of a corporate debtor as a going concern in liquidation does not automatically transfer all pre-CIRP liabilities to the auction purch....
Purchaser in going concern liquidation sale on 'as is where is' basis liable for pre-existing electricity dues; cannot seek waiver under IBC post-liquidation closure despite Section 53 distribution.
Past liabilities of a corporate debtor cannot be imposed on the auction purchaser when seeking a new connection, based on the clean slate principle under insolvency law.
The 'Clean Slate' theory established by the Supreme Court in insolvency cases extinguishes all claims not included in the Resolution Plan, impacting the rights of creditors and other parties involved....
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