The Superintending Engineer vs Shri Sivarama Prasad Bhamidi

Per: Justice Rakesh Kumar Jain:

This appeal is directed against the order dated 31.01.2023 passed by the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench) allowing the application I.A (IBC)/643/2021 filed by the Liquidator for refund of security deposit of Rs. 32,24,100/-.

The brief facts of this case are that Corporate Insolvency Resolution Process was initiated against M/s Parikh Fabrics Pvt. Ltd. (Corporate Debtor) in CP (IB) No. 12/10/HDB/2019 by the Adjudicating Authority on 08.02.2019.

The Resolution Professional (Respondent) of the Corporate Debtor filed a miscellaneous application i.e. I.A. No. 988 of 2019 under Section 33(2) of the Code for liquidation of the Corporate Debtor which was allowed by the Adjudicating Authority on 21.01.2020.

As per the Appellant, it provided electricity connection of 300 KVA under High Tension (HT) Cat-3 to the Corporate Debtor in terms of power supply agreement dated 13.04.2010, the load of the service connection was increased to 750 KVA on 25.07.2011 and later derated to 450 KVA on 27.11.2014. However, it is alleged that on 26.03.2016, the load was further increased to 650 KVA upon the Corporate Debtor’s request but on 14.11.2019, the Corporate Debtor requested deration from 650 to 260 KVA, which was approved by the Appellant. However, it is alleged that the Corporate Debtor failed to pay the cost of estimation of amount of Rs. 6,480/- and had not arranged for a revised HT Agreement, therefore, the deration request was not considered.

It is further alleged by the Appellant that during the execution of the Power Supply Agreement dated 13.04.2010, the Corporate Debtor deposited a security deposit of Rs. 4,50,000/- and subsequently, additional renewal agreements were executed, increasing the total security deposit of Rs. 32,24,100/-. It is also alleged that electricity connection was disconnected on 13.01.2020 due to non-payment of CC charges. According to the Appellant, the Corporate Debtor requested on 20.01.2020 to adjust the dues from the refundable deposit of Rs. 32,24,100/- and accordingly, the superintending engineer addressed a letter on 11.02.2020 proposing the adjustment of excess security deposit towards the consumption charges.

On the other hand, the case set up by the Respondent is that during the CIRP when the production became very low due to lack of orders, the RP requested the Appellant for deration of power supply from 650 to 260 KVA on 14.11.2019 and on 13.01.2020 the Appellant stopped power supply due to non-payment of power charges from December, 2019. On 20.01.2020 request was made for permanent disconnection of HT power and restoring three phase power connection for utilities and lighting for security staff. It is further alleged that upon receipt of liquidation orders from the Adjudicating Authority passed on 21.01.2020 and after public announcement on 25.01.2020, intimation was given to all statutory authorities including the Appellant for submission of their claim but no claim was received from the Appellant till date. The Respondent sought refund of the deposit with interest from the Appellant to which they filed a response and in the absence of any positive result, the application was filed before the Adjudicating Authority for seeking refund.

The Adjudicating Authority, while allowing the application, found that the adjustment was done while the moratorium was in operation and directed to refund the security deposit of Rs. 32,24,100/- and no order was passed regarding the claim of interest by the liquidator on the ground that since there was no agreement between the parties regarding payment of interest, therefore, the same could not have been granted. It is also stated by the liquidator before the Adjudicating Authority that though no assets of the Corporate Debtor is left with him but if the Appellant so chooses may still make a claim to him for the arrears due from the Corporate Debtor.

Counsel for the Appellant has argued that the amount of security deposit has been adjusted against the arrears on the request made by the IRP on 20.01.2020. Whereas Counsel for the Respondent has submitted that on the next date i.e. 21.01.2020 the liquidation order was passed and the adjustment has been made by the Appellant on 24.07.2020, during the pendency of the liquidation proceedings.

We have heard Counsel for the parties and examined the available record from which we have found that firstly the Appellant did not file any claim and secondly, it did not choose to appear to contest the application. After the liquidation order was passed on 21.01.2020, all tangible or intangible, movable or immovable properties as evidenced in balance sheet of the Corporate Debtor, being a part of the liquidation estate in terms of Section 36(3) of the Code, could not have been utilised by the Appellant by invoking general terms of supply of electricity. The electricity bills incurred by CD during the moratorium period were paid and the Appellant after the commencement of liquidation unilaterally adjusted the outstanding bills.

Thus, keeping in view the aforesaid facts and circumstances, we do not find any merit in the present appeal and the same is hereby dismissed. No costs.