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Judgment
20.09.2024: Heard Counsel for the appellant.
This appeal has been filed against the order dated 16.07.2024 passed by NCLT, Division Bench, Ahmedabad. In the CIRP against the Corporate Debtor i.e. Agarwal Mittal Concast Private Limited a resolution plan was approved by the Adjudicating Authority on 13.12.2021. The Successful Resolution Applicant (SRA) i.e. Mangallam Worldwide Limited has filed an IA No. 1242 (AHM) of 2023 in CP (IB) 533 of 2018 praying for reliefs which have been extracted by the Adjudicating Authority in paragraph-1. The appellant Madhya Gujarat Viz Bijli Company Limited opposed the application however the Adjudicating Authority allowed the application and granted the prayer (b & c) as claimed in the application aggrieved by which order this appeal has been filed.
Ld. Counsel for the appellant submits that Agarwal Mittal Concast Private Limited who has filed an appeal before the Gujarat High Court has given an undertaking to make the balance payment due to the appellant which payments have not yet been made hence the appellant was not obliged to transfer the electric connection in the name of the successful purchaser.
It is submitted that the corporate debtor having undertaken to make said payment are still due and without the said payment successful purchaser cannot be given the connection.
The Adjudicating Authority has after considering the submissions of the parties has allowed the application. The prayers made in the application were quoted in paragraph-1 of the order which is as follows:-
“The present application is filed under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 R/W Rule 11 of NCLT Rules in CP(IB) No. 533 of 2018 seeking certain the reliefs and concessions with following prayers: -
(a) Allow the present Application; and/or
(b) declare that the purported claim of Respondent stands extinguished pursuant to the approval of Resolution Plan by this Hon'ble Tribunal vide order dated 13.12.2021; and/or
(c) direct the Respondent to grant the name transfer application submitted by the applicant forthwith without having to make any payment/arrears in whatever nature payable by the Corporate Debtor prior to 16.3.2020 i.e. date of commencement of CIRP; and/or
(d) pending the admission and final hearing of this application, direct the Respondent not to take any coercive action against the applicant including but not limited to disconnecting the electricity connection already subsisting at the premises of the Corporate Debtor and now in control of the applicant; and/or
(e) grant any other relief or relief as may deem fit in the interest of justice.”
The Adjudicating Authority has recorded its observations in paragraph-15 of the judgment which are as follows:-
“15. We have heard the Counsels for the Applicant and respondent and have perused the documents placed before us. The observations of this Tribunal are as follows:
i. This Application is filed by the applicant seeking extinguishment of the claim by the Respondent and directing the Respondent to grant the name transfer application.
ii. It is seen that the Applicant was admitted to the CIRP on
16.03.2020 and the Resolution Plan was approved against the Applicant on 13.12.2021 by this Tribunal.
iii. Relying upon the Judgment of the Supreme Court in the matter of Ghanashyam Mishra & Sons vs. Edelweiss Asset Reconstruction Company Limited & Others, which emphasis on the principle of the clean slate. The relevant portion of the order is reproduced as under:
“..95. In the result, we answer the questions framed by us as under:
i) That once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan;
(ii) ....
(iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be Continued... »
iv. We also rely on the Judgment of Hon'ble Supreme Court in the matter of Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Limited and Others in this regard.
v. As it is seen that the Resolution Plan order passed by this Tribunal was not challenged before any higher forum within the prescribed time, therefore the order has attained finality.
The Ld. Counsel for the appellant has himself brought on the record the copy of the judgment of Hon’ble Supreme Court in Southern Power Distribution Company decided on 06.09.2023 in the Southern Power Distribution Company the Hon’ble Supreme Court has held that ‘clean slate principle’ could stand negated if the successful resolution applicant is asked to pay the arrears payable for the corporate debtor for grant of electricity connection in her/ his name. The Supreme Court held:
“Delay condoned.
In our opinion, the legal issue is covered by the judgment of this Court in "Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Limited and Others m • The appellant - Southern Power Distribution Company of Andhra Pradesh Limited cannot insist on payment of arrears, which have to be paid in terms of the waterfall mechanism, for grant of an electricity connection. However, the successful resolution applicant will have to comply with the other requirements for grant of electricity connection. The clean slate principle would stand negated if the successful resolution applicant is asked to pay the arrears payable for the corporate debtor for the grant of an electricity connection in her/his name.”
The mere fact that Agarwal Mittal Concast Private Limited had given the undertaking before the High Court in the appeal that in case of failure of the appeal it shall make the balance payment cannot bound the successful purchaser consequent to approval of resolution plan by the Adjudicating Authority. As per the resolution plan the SRA came took the corporate debtor and has applied for change of electricity connection in the name of SRA. The Adjudicating Authority has allowed the prayers (b & c) as quoted above and in view of the approved of resolution plan by order dated 13.12.2021 all claims stands extinguished save as dealt in the resolution plan. The SRA having taken the corporate debtor under the resolution plan is entitled to have the electricity connection ofcourse subject to payment of other charges except the outstanding dues.
The judgment of Hon’ble Supreme Court in Southern Power as noted above fully covers the issue, following the said judgment we do not find any ground to interfere in the impugned order of Adjudicating Authority. The appeal stands dismissed.