Electricity supply is essential during corporate insolvency, and interrupting it violates IBC provisions.

ORDER

1. The present application is filed by Jalesh Kumar Grover (hereinafter referred to as the Applicant/ IRP) for M/s Garib Nawaz Hotels Private Limited (hereinafter referred to as the “CD”) under Sections 60 (5) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code” or “IBC”) against Chandigarh electricity department, Chandigarh (hereinafter referred to as “Respondent No.1/CED”), Superintendent Engineer, Chandigarh electricity department (hereinafter referred to as “Respondent No.2”) and Assistant Executive Engineer, Chandigarh electricity department (hereinafter referred to as “Respondents No.3”) by inter-alia seeking to stay the action of the Respondents of disconnecting the Electricity connection during the pendency of the present Application; to direct the Respondents not to discontinue the services essential to run the business of corporate debtor and no steps should be taken to stop the business operations of corporate debtor and extend co-operation to the Applicant etc

2. The facts of the case are as under:

1) Punjab National Bank has filed main CP (IB) No. 319/Chd/Chd/2019 against CD, which was admitted by initiating CIRP against the Corporate Debtor on 09.02.2024 with consequential directions, which includes the appointment of Applicant as IRP. The Applicant has duly performed his duties under the Code and underlying Regulations for carrying out the CIRP of the Corporate Debtor. In compliance of the provisions of the Code, the Applicant sent letters to various departments intimating about the initiation of CIRP in the matter of the Corporate Debtor and requested them to file their claim, if any, and not to suspend any essential service being rendered in view of non-payment of dues.

One such letter dated 17.02.2024 was also sent to the Respondent No. 3.

2) The Respondents filed their claim vide their office Memo No. 1155 dated 21.02.2024 for an amount of Rs.62,56,597/- as on 31.03.2024 against the account No. 205/IA91/002970Q running in the name of the Corporate Debtor.The Applicant informed Respondent No. 3 of a Rs.10 Lakh payment made by the suspended Directors. On April 1, 2024, Respondent No. 3 issued office Memo No. 2442, acknowledging the adjustment but asserting a current pending bill of 53,53,344/- and threatening disconnection for non-payment. The Applicant countered this by letter dated April 25, 2024 by requesting them not to disconnect electricity connection by stating outstanding amount constitutes pre-CIRP dues, which must be dealt with under Section 53 of the Code and further emphasized the protection against termination/suspension of essential services, such as electricity, under the moratorium mandated by Section 14 (2) of the Code.

3) And Service of electricity is an essential service required to maintain the Corporate Debtor as a going concern and cited judgments supporting this position. Despite a letter from the Applicant, the Respondents failed to respond. Upon personal visit, Respondent No. 3 refused to continue the electricity supply without immediate payment of outstanding dues amounting to Rs.53,53,344/-, asserting that they were not bound by the cited judgments due to the absence of specific directions against their department. Subsequent to the visit, Respondent No. 3 issued a letter dated 26.06.2024, confirming a legal opinion that advised the department to "Ask for orders of Court, where the recovery has been stayed so that Advice of PO can be taken. The Respondent No. 3 subsequently demanded a copy of an NCLT order specifical