The Court affirmed that the Insolvency and Bankruptcy Code, 2016 overrides the Electricity Act, 2003, preventing the recovery of pre-existing owner's dues from an auction purchaser.

JUDGMENT :

PRASHANT KUMAR, J.

1. Mr. Ashish Kumar, learned counsel appears for the petitioner and Mr. Kartikeya Saran, learned Additional Advocate General appears for the State-respondents.

2. The factual matrix of the case which has given rise to instant dispute are as under :-

The petitioner is a private company engaged in trading of steel products at Delhi. The petitioner came across an advertisement in the newspaper dated 13th/14th April, 2022 wherein auction purchasers were invited to participate in the online auction sale of immovable assets of M/s Chaudhary Ingots Pvt. Ltd. on “as is where is whatever there is basis”. Apparently, the company, i.e. Ms. Chaudhary Ingots P.Ltd. had gone into insolvency but COC did not approve the resolution plan and thereafter, the company had gone into liquidation. Under the direction of NCLT, Allahabad auction seller/Liquidator Sandeep Goel called for online auction of the assets of the debtor company, to be conducted by a company known as M/s Link Star Infosys Pvt. Ltd.

3. The petitioner, who was interested in buying immovable assets of the debtor company, had deposited earnest money of Rs.30 lakhs as fixed by the auctioneer, and participated in the auction wherein the reserved price was fixed at Rs.284.39 lakhs. During auction proceedings against the reserved price Rs.284.39 lakhs, the petitioner had given bid of Rs.518.39 lakhs. His bid being the highest, he was declared successful bidder. As per the auction conditions at the end of the day of auction, the balance amount was to be paid by the purchaser to the Liquidator. The petitioner paid the full amount, towards full and final payment of the auction money. Thereafter, the sale certificate was issued on 7^th July, 2022 in favour of the petitioner and the possession letter was also issued on 27^th July, 2022 for the immovable properties of M/s Chaudhary Ingots Pvt. Ltd. Later on, the title deed/sale deed was also executed on 29^th May, 2024 of the auctioned property in the name of the petitioner.

4. Thereafter, the petitioner company had applied for electricity connection on the said property but the same was refused by respondent no.1 on the ground that there was certain dues by the erstwhile owner on the premises and unless and until the same is cleared, no electricity connection can be granted to the petitioner. The petitioner made number of representations to the respondent but could not get any relief. On the contrary, respondent nos.1 to 3 asked the petitioner to deposit Rs.4,92,69,142, outstanding electricity dues of the erstwhile company.

5. Aggrieved by the demand to pay outstanding dues of the erstwhile company, the petitioner moved a writ petition before this Court being Writ (C) No. 9142 of 2025 (M/s Dharti Agro Industries v. The Managing Director, PVVNL). This writ petition was disposed of vide order dated 10th April, 2025. The said order is reproduced below :

“1. Heard learned counsel appearing on behalf of the petitioner and the learned counsel appearing on behalf of the respondents.

2. This is a writ petition under Article 226 of the Constitution of India wherein the writ petitioner has prayed for the following reliefs:

"(i) Issue a writ order or directi