The court ruled that operational creditors' claims must be disclosed in the resolution plan under the IBC, and failure to do so does not extinguish their rights, emphasizing the need for transparency and fairness in the insolvency process.

ORDER :

JUSTICE N.SESHASAYEE

PRAYER: Writ petition filed under Article 226 of the Constitution of India for a Writ of Certiorarified Mandamus calling for the records of the impugned demand notice dated 19.01.2022 in Lr.No.SE/CEDC/CUD/DFC/ AO/REV/ASS.No.384/2022 on the file of the respondents and quash the same as being contrary to law and decisions of the Hon'ble Supreme Court of India, as such arbitrary, highhanded, illegal, without jurisdiction and direct the respondents to forthwith provide the electricity connection as applied by the petitioner.

This petition was filed for a writ of certiorarified mandamus to quash the demand notice of the respondents and to further direct the respondents to provide the electricity connection.

THE FACTS:

2. The case of the petitioner is as below:

a) The petitioner herein is a public limited company, and it is also

registered under the MSME Act, 2006. It had availed financial

assistance from M/s. Indian Overseas Bank (henceforth IOB).

However, it suffered huge business loss owing to which it could not service its loan-liability to the IOB, and as to be expected its loan was notified as NPA by the lender. Thereafter on 24.03.2017, the IOB assigned the debt of the petitioner-company to M/s. Alchemist Asset Reconstruction Company Ltd., (hereinafter referred to as 'Financial Creditor/FC).

b) The assignee of the loan, as a Financial Creditor moved the NCLT with an application under Sec.7 of the IBC against the petitioner-company for initiating a Corporate Insolvency Resolution Process (henceforth CIRP). The statutorily prescribed course of action commenced, accordingly an Interim Resolution Professional (IRP) was appointed, Committee of Creditors (IOB) was constituted, and it approved the resolution plan and submitted it, and on 06.12.2021 it was approved by the Adjudicating Authority, the NCLT.

c) In terms of the resolution plan, only the financial creditor of the petitioner was partially benefited, since the value of the assets of the petitioner was far short of the value of the liability it faced. So far as Operational Creditors are concerned, the resolution plan directed that they would be paid pro rata at 1% of the value of their claim. The petitioner accordingly redeemed itself from the debt-trap it faced.

d) While so, TANGEDCO, to which the petitioner owed arrears of unpaid electricity charges from June, 2019 to a tune of Rs.32,86,061/- issued a demand notice dated 19.01.2022 for the said sum. The petitioner had replied stating that it had already gone through CIRP and as per the Resolution Plan approved by the NCLT, all the outstanding dues of the company not falling within the purview of the Resolution Plan stood extinguished. And, since the demand of the TANGEDCO was not met, it promptly disconnected the electricity service connection of the petitioner.

e) Thereafter, on 24.2.2022, the petitioner applied for a temporary connection of the LT Energy. TANGEDCO,