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PRAKASH SHRIVASTAVA, RAJARSHI BHARADWAJ
West Bengal State Electricity Distribution Company Limited – Appellant
Versus
Vasavi Industries Limited – Respondent
JUDGMENT :
PRAKASH SHRIVASTAVA, J.
1. This appeal is at the instance of the Electricity Distribution Company, i.e. the respondent in the writ petition, challenging the order of the learned Single Judge dated 23rd of March, 2022 whereby WPA 1936 of 2022 has been allowed and appellant has been directed to restore the electricity supply to the respondent no. 1 herein (writ petitioner) only on the reconnection charges without insisting upon deposit of its previous claims or past dues of electricity and other charges which had resulted into disconnection.
2. The respondents, herein, had filed the writ petition with the plea that the respondent no. 1 is an ISO9001 certified company engaged in the manufacturing of iron, steel and ferro alloy products. The matter relates to the electricity connection of the plant at Bishnupur, West Bengal which was shut down in 2014. The respondent no. 1 was placed under Corporate Insolvency Resolution Process (for short ‘CIRP’) under the Insolvency and Bankruptcy Code, 2016 (for short ‘the IBC’) pursuance to which, the respondent no. 1 was taken over by the new management through respondent no. 2 who was a successful resolution applicant. For putting back th
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....
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.
Approved resolution plan entitles corporate debtor to new electricity connection without liability for pre-CIRP dues of third-party lessor; IBC prevails over electricity laws, ensuring clean slate an....
Claims against a successful resolution applicant for dues not presented during CIRP are extinguished after approval of the resolution plan, confirming the clean slate principle.
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.
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