Pre-CIRP debts are extinguished upon approval of the Resolution Plan under the IBC, and the pendency of an appeal does not automatically stay the implementation of the approved Resolution Plan.

JUDGMENT

Sabyasachi Bhattacharyya, J. - The writ petitioner has primarily prayed for immediate restoration of the petitioner's electricity supply by the Respondent no. 1, the Damodar Valley Corporation (DVC).

2. The brief facts, shorn of unnecessary details, are:

3. The DVC, upon prior notice, disconnected the electricity supply to the factory premises of the petitioner no. 1-company on June 7, 2019.

4. On October 18, 2019, the petitioner no. 1 was admitted to a Corporate Insolvency Resolution Process (CIRP). On april 8, 2021, the Committee of Creditors approved the Resolution Plan. The NCLT approved the same on October 8, 2021.

5. Thereafter the Resolution Professional wrote to the DVC tendering payment of Rs. 7,45,608/- as per the approved Resolution Plan and requested reconnection of electricity, which request was reiterated by a later communication by the petitioner no. 1.

6. However, the DVC, by its letter dated November 25, 2021, demanded payment of Rs. 31,77,33,915/- as outstanding dues of electricity charges from the petitioner no. 1.

7. The learned Senior advocate appearing for the petitioners places reliance on Ghanshyam Mishra & Sons (P) Ltd. V. Edelweiss asset Reconstruction Company Ltd. [(2021) 9 SCC 657] and Committee of Creditors of Essar Steel India v. Satish Kumar Gupta [(2020) 8 SCC 531] and submits that all the pre-existing debts of a creditor stand extinguished upon the approval of a Resolution Plan. In this context, the petitioners also rely on the following judgments:

(i) Ruchi Soya Industries v. Union of India (Civil appeal Nos. 447-448 of 2013)

(ii) DVC v. Kharkia Steel Pvt. Ltd. [Company appeal (aT) Insolvency No. 119 of 2022]

(iii) DVC v. Karthik alloys Ltd. [Company appeal (aT) Insolvency No. 13 of 2021

(iv) Shiv Shakti Inter Globe Exports Pvt. Ltd. V. ktc Foods Pvt. Ltd. [Company appeal (aT) Insolvency No. 650 of 2020

(v) Sri Vasavi Industries Limited and another v. WBSEDCL [WPa No. 1936 of 2022]

8. The learned Senior advocate for the petitioners secondly contends that Clause 4.6.4 of the West Bengal Regulatory Commission (Electricity Supply Code) Regulation 2013, on the basis of which the DVC makes its claim, is contrary to the objectives and provisions of the Insolvency and Bankruptcy Code (IBC), 2016 and is, thus, hit by Section 238 of the IBC, which gives the IBC primacy over other laws, including the Electricity act, 2003. In support of such submission, the petitioners cite Paschimanchal Vidyut Vitran Nigam Ltd. V. Raman Ispat Pvt. Ltd. & Ors. [2019 SCC OnLine NCLaT 883].

9. For effective revival of the debtor company, the Resolution Plan is binding with immediate effect from its approval by the NCLT on October 8, 2021, it is argued. Moreover, Section 43 of the Electricity act, 2003 mandates the DVC to restore supply of power, since the claims of the DVC stand extinguished in law.

10. Moreover, it is contended by the petitioners, the DVC has accepted the amount of Rs. 7,45,608/- tendered by the petitioners and is now estopped from claiming its pre-CIRP dues as a pre-condition for restoring electricity supply.

11. The learned Senior advocate appearing for the petitioners contends that although an appeal against the order approving the Resolution Plan is pending at the behest of the DVC before the NCLaT, no stay of operation of the said order of approval has been passed in the appeal. On or about January 31, 2022, the NCLaT recorded that the present petitioners were not proposing to file any contempt application against the DVC. However, it is submitted that the said recording cannot debar the writ court from passing any order.

12. Since no contravention of any condition of license has been alleged in the present case, Section 129 of the 2003 act is not applicable, it is argued. Moreover, neither the Grievance Redressal Officer under Section 42 (5) nor the Ombudsman under Section 42 (6) of the 2003 act are competent to determine the legal question as to whether or not the dues of the DVC in respect of a pre-CIRP