Akums Lifesciences Limited vs Punjab State Power Corporation Limited & Ors.

ORDER

“Part-III- Financial Proposal Of The Resolution Applicant

6. Other Operational Creditors

6.1.

Amount: The Operational Creditors of the Corporate Debtor shall be paid the following amounts, in full and final satisfaction of all Claims of all Operational Creditors and in order to provide an equitable solution for stakeholders of the Corporate Debtor.

6.1.1.

All Statutory Dues, and Claims in relation thereto, shall be fully and finally settled by making the payment of an amount of up to IN IN 3,75,00,000 (Indian Rupees Three Crore Seventy Five Lakhs), in aggregate, (the "Statutory Dues Settlement Amount") to the Governmental Authorities determined by the Resolution Applicant after due consideration and discussions with the relevant Governmental Authorities (if required).

6.1.2.

It is proposed to pay certain other Operational Creditor(s) such portion of their Verified Amounts as may be determined by the Resolution Applicant after consideration of the importance of such Operational Creditors to the revival of the Corporate Debtor and / or recommencement of its operations, subject to an aggregate cap of IN 3,75,00,000 (Indian Rupees three core seventy five lakhs) ("Other Operational Creditor Amount"), in full and final satisfaction of all Claims of such Operational Creditors.

14. Effect of the Plan, implementation of the Plan and payments under the Plan

……..14.5. The payment to Persons contemplated in Part 111 (Financial Proposal of the Resolution Applicant) shall be each of Corporate Debtors and Resolution Applicant's full and final performance and satisfaction of all its obligations to such Persons and all Claims (including, for the avoidance of doubt, any unverified portion of their Claims) of such Persons against the Corporate Debtor shall stand irrevocably and unconditionally abated, settled and extinguished in perpetuity with effect from the First Payment Date (save and except, the Claims relating to Deferred Lender Amount).

14.15.

All Claims that may be made or arising against the Corporate Debtor in relation to any payments required to be made by the Corporate Debtor under Applicable Law, or in relation to any breach, contravention or Non-Compliances of any Applicable Law (whether or not such Claim was notified to or Claimed against the Corporate Debtor, and whether or not any Governmental Authority was aware of such Claim shall be deemed to be owed and due by such member of the Corporate Debtor and shall immediately, irrevocably and unconditionally stand abated, settled and extinguished on and with effect from the First Payment Date. No Governmental Authority shall have any further rights or claims against the Corporate Debtor, in respect of the period prior to the First Payment Date”. (Emphasis Supplied)

"12.

The position therefore may be summarised thus:

(i)

Electricity arrears do not constitute a charge over the property. Therefore in general law, a transferee of a premises cannot be made liable for the dues of the previous owner /occupier.

(ii)

Where the statutory rules or terms and conditions of supply which are statutory in character, authorise the supplier of electricity to demand from the purchaser of a property claiming reconnection or fresh connection of electricity, the arrears due by the previous owner/occupier in regard to supply of electricity to such premises, the supplier can recover the arrears from a purchaser." (emphasis supplied)

“15.

We must observe that the decision in Isha Marbles (4995) 2 SCC 648: (1925) 1 SCR847) is by itself nor an answer to the validity of clause 21-A of the Terms and Conditions inserted by the notification, under Section 19 of the Supply Act, the licensee or rather, the Electricity Board, is entitled to set down the Terms and Conditions of Supply of electrical energy. In the light of the power available to it, also in the context of Section 796) of the Supply Act, it could not be said that the insertion of clause 21-A in the Terms and Conditions of Supply of electrical energy is beyond the power of the appellant. it is also not merely contractual. This Court in Hyderabad Vanaspathi Ltd. v. A.P. SEB ((1998) 4 SCC 470 : (1998) 2 SCR 6201 has held that the Terms and Conditions of Supply of electricity notified by the Electricity Board under Section 49 of the Electricity (Supply) Act are statutory and the fact that an individual agreement is entered into by the Board with each consumer does not make the Terms and Conditions of Supply contractual. This Court has also held that though the Electricity Board is not a commercial entity, it is entitled to regulate its tariff in such a way that a reasonable profit is left with it so as to enable it to undertake the activities necessary. If in that process in respect of recovery of dues in respect of a premises to which supply had been made, a condition is inserted for its recovery from a transferee of the undertaking, it cannot ex facie be said to be unauthorised orunreasonable. Of course, still a court may be able to strike it down as being violative of the fundamental rights enshrined in the Constitution of India. But that is a different matter. In this case, the High Court has not undertaken that exercise.” (emphasis supplied)

“37.

From a combined reading of sub-section (4) and sub-section (2) of Section 60 with Section 179, it is clear that none of them hold the key to the question as to whether NCLT would have jurisdiction over a decision taken by the Government under the provisions of the MMDR Act, 1957 and the Rules issued thereunder. The only provision which can probably throw light on this question would be sub Section (5) of Section 60, as it speaks about the jurisdiction of NCLT. Clause (c) of sub-Section (5) of Section 60 is very broad in its sweep, in that it speaks about any resolution. But a decision taken by the Government or a statutory cannot, by any stretch of imagination, be brought within the fold of the phrase “arising out of or in relation to the insolvency resolution” where a corporate debtor had suffered an order at the hands of Income Tax Appellate Tribunal, at the time of initiation of CIRP. If Section 60(5)(c) of the IBC is interpreted to include all questions of law or facts under the sky, an Interim Resolution Professional/Resolution Professional will then claim a right to challenge the order of the Income Tax Appellate Tribunal before the NCLT, instead of moving a statutory appeal under Section 260-A of the Income Tax Act, 1961. Therefore the jurisdiction of the NCLT delineated in Section 60(5) cannot be stretched so far as to bring absurd results. [It will be a different matter, if proceedings under statutes like Income Tax Act had attained finality, fastening a liability upon the corporate debtor, since, in such cases, the dues payable to the Government would come within the meaning of the expression "operational debt" under Section 5(21), making the Government an "operational creditor" in terms of Section 5(20). The moment the dues to the Government are crystallised and what remains is only payment, the claim of the Government will have to be adjudicated and paid only in a manner prescribed in the resolution plan as approved by the adjudicating authority, namely, the NCLT.] ……….

46.

Therefore, in fine, our answer to the first question would be that NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute supplemental lease deeds for the extension of the mining lease. Since NCLT chose to exercise a jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice. ………

53.

The upshot of the above discussion is that though NCLT and Nclat would have jurisdiction to enquire into questions of fraud, they would not have jurisdiction to adjudicate upon disputes such as those arising under the MMDR Act, 1957 and the Rules issued thereunder, especially when the disputes revolve around decisions of statutory or quasi-judicial authorities, which can be corrected only by way of judicial review of administrative action. Hence, the High Court was justified in entertaining the writ petition and we see no reason to interfere with the decision [State of Karnataka v. Tiffins Barytes Asbestos & Paints Ltd., 2019 SCC OnLine Kar 2463] of the High Court. Therefore, the appeals are dismissed. There will be no order as to costs.