2026 Supreme(All) 678

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
AJIT KUMAR, SWARUPAMA CHATURVEDI, JJ.
South East U.P. Power Transmission Company Limited – Appellant
Versus
Prescribed Authority and Others – Respondents
Writ (C) No. 19391 of 2023, Writ (C) No. 17846 of 2025
Decided On : 24-04-2026

The Corporate Insolvency Resolution Process under the insolvency law ensures that a successful resolution applicant takes over the corporate debtor on a clean slate. Any pre-resolution claims, including statutory electricity dues not expressly provided for in the approved resolution plan, stand extinguished and are unenforceable against the newly resolved entity.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 31 and 238 - Electricity Act, 2003 - Sections 173 and 174 - Recovery of dues - Pre-resolution period - Extinguishment of claims - Whether approved resolution plan binds statutory authorities - Held, Section 31 of the Code makes an approved resolution plan binding on all stakeholders, including government and statutory authorities - Claims not part of the resolution plan are permanently extinguished upon its approval - Section 238 states that the Code shall have effect notwithstanding anything inconsistent contained in any other law - Public announcement of the insolvency process constitutes sufficient notice to all stakeholders. (Paras 68, 70, 75, 108)

(B) Clean Slate Doctrine - Upon approval of a resolution plan, a corporate debtor emerges as a reborn entity, free from past liabilities not specifically preserved in the plan - This principle ensures certainty and viability for the successful resolution applicant by preventing the revival of surprise or belated claims. (Paras 60, 79, 81)

(C) Judicial Review - The commercial wisdom of the committee of creditors is paramount and not susceptible to judicial interference unless the resolution process violates the strict statutory confines of the Code. (Para 99)

Facts of the case:
Petitioners challenged demand notices issued by utility authorities post-implementation of insolvency resolution plans. The demands sought recovery for electricity consumption occurring during the pre-insolvency period. Authorities contended that statutory dues as per specific utility regulations were not subject to the code and remained enforceable.

Findings of Court:
The insolvency law is a comprehensive, self-contained framework that overrides other statutes through its non-obstante provisions. Claims concerning the pre-resolution period that were not submitted during the process stand extinguished by operation of law once the resolution plan is approved. Public disclosure through announced procedures satisfies notice obligations, rendering individual intimation to every creditor unnecessary.

Issues: Whether the insolvency framework overrides general electricity laws regarding the recovery of pre-insolvency dues; whether statutory authorities are entitled to separate notice of insolvency proceedings; and whether non-claimed dues remain enforceable against a resolved entity.

Ratio Decidendi: Section 238 of the insolvency law provides it overriding primacy over other legislative enactments, including utility-specific acts. Consequently, any attempt to enforce pre-resolution claims outside the approved plan contravenes the statutory scheme, which mandates that the resolved entity must be permitted to start on a clean slate.

Result: Petitions allowed.