National Company Law Appellate Tribunal
Southern Power Distribution Company Of ... vs Gavi Siddeswara Steels India Private ... on 5 January, 2023
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
Company Appeal (AT)(CH)(Ins) No.263/2021 & IA No.561/2021
(Under Section 61 of the Insolvency and Bankruptcy Code, 2016)
(Arising out of the Impugned Order dated 23.06.2021 in IA (IBC)
No.159 of 2021 in CP (IB) No.673/7/HDB/2018
passed by the 'Adjudicating Authority' (National Company Law
Tribunal, Special Bench, Court -I, Hyderabad)
In the matter of:
Southern Power Distribution Company
of Andhra Pradesh Limited
Represented by its Chairman & Managing Director
Beside Srinivasa Kalyana Mandapam,
Tiruchanoor Road,
Tirupathi - 517 501
Andhra Pradesh ... Appellant
V
1. Gavi Siddeswara Steels (India) Pvt. Ltd.
Through Successful Resolution Applicant
Mr. Bharat Kumar of Corporate Debtor
At Sy. No.233/2, 23612,
B.N. Halli Village, Rayadurg Mandal,
Anantapur District, Andhra Pradesh
2. Punjab National Bank,
Through its Chief Manager,
Plot No.4, Sector 10,
Dwarka, New Delhi - 117705
Branch at 6-1-73, 2nd Floor,
Sayeed Plaza, ARB Branch,
Lakdi-Ka-Pul, Hyderabad - 500004
Telangana State ... Respondents
Company Appeal (AT)(CH)(Ins) No.263/2021 Page 1 of 10
Present :
For Appellant : Mr. Nishant Sharma, Advocate
For Respondent No.1 : A.K. Mylsamy & Associates
ORDER
(Virtual Mode) 05.01.2023: Heard Mr. Nishant Sharma, the Learned Counsel appearing for the 'Appellant' and the Learned Counsel for the Respondent No.1 appearing on behalf of M/s. A.K. Mylsamy & Associates in the instant Comp. App. (AT)(CH)(Ins) No.263/2021.
2. Earlier, while passing the 'impugned order' in IA (IBC) No.159 of 2021 in CP (IB) No.673/7/HDB/2018 dated 23.06.2021 the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench-I) had made the following observations :-
"Learned Counsel for Petitioner and Learned Counsel for Respondent appeared via vide conference.
IA/159/2021 is filed by the Successful Resolution Applicant directing the Respondent (SPDCL) to give fresh electricity connection to the unit. We heard learned Counsel for the Respondent without going to allegations made against them. We direct the respondents to give electricity supply to the unit Company Appeal (AT)(CH)(Ins) No.263/2021 Page 2 of 10 of the Corporate Debtor subject to payment of fees and other charges as applicable under the law. With this, IA stands disposed of."
3. It is represented on behalf of the 'Appellant' that the 'Appellant' is the 'Distribution Licensee' and wholly owned by the Government of Andhra Pradesh. Further, the 'Appellant' was procuring power from the 'State' and 'Central Generating Stations' apart from procuring the power from 'Private Generating Stations' and 'Power Exchanges', to supply such power to all 'end consumers' of the State of Andhra Pradesh, within their 'jurisdiction', having control over Ananthapur, Chittoor, Kadapa, Kurnool and Nellore Districts.
4. The Learned Counsel for the 'Appellant' fairly submits that the fact in 'issue' before this 'Tribunal' is that the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench-I) had not examined the Clause 8.4 of the 'general terms and conditions' of supply followed by the 'Petitioner', herein, which was approved by the 'Andhra Pradesh Electricity Regulatory Commission' as the 'Applicant' only after 'Transfer' / 'Resolution' / 'Auction' or on any other Transaction' and, that there is no 'jurisdiction' conferred on an 'Adjudicating Authority' to 'waive' the 'Electricity Dues' recoverable from the premises. Company Appeal (AT)(CH)(Ins) No.263/2021 Page 3 of 10
5. The 'other contention' advanced on behalf of the 'Appellant' is that the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench-I) at the time of passing the 'impugned order' in IA (IBC) No.159 of 2021 in CP (IB) No.673/7/HDB/2018 dated 23.06.2021 had not appreciated the 'Decision' of the Hon'ble Supreme Court of India in TSSPDCL V Srigdhaa Beverages reported in 2020 SCC Online SC 478, whereby and whereunder the 'Hon'ble Supreme Court of India had laid down 'certain principles' in terms of 'non-waiver' of 'Dues' of 'Premises'.
6. At this juncture, the Learned Counsel for the 'Appellant' fairly bring it to the notice of this 'Tribunal' that 'similar questions of Law', came up for 'consideration' before the 'Principal Bench' of this 'Tribunal', New Delhi in Comp. App. (AT) (Ins) No.1078/2020 dated 13.12.2022, wherein this 'Tribunal' had, ultimately, dismissed the said 'Appeal'.
7. In this connection, this 'Tribunal', pertinently points out the observations made by this 'Tribunal' in Comp. App. (AT) (Ins) No.1078/2020 dated 13.12.2022, wherein at 'Paragraphs 2 to 6 observed as follows:-
"2. The Appellant's case in the Appeal is that the Adjudicating Authority has not examined Clause 8.4 of General Terms and Company Appeal (AT)(CH)(Ins) No.263/2021 Page 4 of 10 Conditions of Supply followed by the Appellant approved by Andhra Pradesh Electricity Regulatory Commission. The Adjudicating Authority has no jurisdiction to waive the electricity dues recoverable from the premises. It is submitted that the electricity dues cannot be waived in the Resolution Plan. In the Appeal reliance has been placed on the judgment of Hon'ble Supreme Court in "Telangana State Southern Power Distribution Company Ltd. & Anr. vs. M/s Srigdhaa Beverages, 2020 SCC OnLine SC 478". It is submitted that previous dues cannot be waived and Appellant is entitled to insist for payment of previous dues before restoration of electricity supply.
3. The issues which have been raised by the Appellant in this Appeal are fully covered by the judgment of this Tribunal in "Company Appeal (AT) (Ins.) No.62 of 2022, Damodar Valley Corporation vs. Dimension Steel and Alloys & Ors., decided on 23.05.2022". In the above case the approval of plan was challenged on various grounds. One of the ground raised was that Appellant was entitled to claim unpaid dues as per West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2013. In the above judgment in paragraphs 14 to 17 following has been laid down:-
Company Appeal (AT)(CH)(Ins) No.263/2021 Page 5 of 10
"14. There is no question of the claim of Appellant still existing pertaining to pre-CIRP period, which claim was filed before the Resolution Professional, after the approval of the Resolution Plan. 15. The submission, which has been much pressed by learned Senior Counsel for the Appellant that there has been contravention of Statutory Regulations, as the Plan breaches the provision of Section 30, sub- section (2) (e). Section 30, subsection (2) (e) provides: "30. Submission of resolution plan. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan - (e) does not contravene any of the provisions of the law for the time being in force."
16. We may at this stage also refer to the Statutory Regulations 4.6.1 and 4.6.4, which are to the following effect: "4.6.1 If the power supply to any consumer remains disconnected continuously for a period of one hundred and eighty day's where the disconnection has been effected in compliance with any of the provisions of the Act or Regulations, the agreement of the licensee with the consumer for supply of electricity shall be deemed to have been terminated with consequential effect on expiry of the said period of one hundred and eighty days. This will be without prejudice to such other action or the claim that may arise from the disconnection of supply or related issues therefor. On termination of the agreement, the licensee shall have the right to remove the service line and other installations Company Appeal (AT)(CH)(Ins) No.263/2021 Page 6 of 10 through which electricity is supplied to the consumer. 4.6.4 Notwithstanding anything contained contrary elsewhere in these Regulations were deemed termination of agreement has taken place, then on the basis of application for any consumer new service connection can only be provided in the same premises if the outstanding dues against the deemed terminated consumer is cleared along with the late payment surcharge." 17. There can be no quarrel with the Statutory Regulations of the West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2013. In Regulation 4.6.4, it is contemplated that new service connection can only be provided in the same premises if the outstanding dues against the deemed terminated consumer is cleared, but the said Regulations cannot be pressed in service, when the Resolution Plan has been approved in the CIRP under the Code. The Code has been given overriding effect, on any other inconsistent law under Section 238. When any statutory provision including the provisions of West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2013 are overridden, the question of contravention of such provision does not arise. In event, the submission of learned Senior Counsel is accepted that all laws in force, including the Regulations in question have to be followed in the Resolution Plan and any contravention shall violate Section 30, sub-section (2) (a) & (e), the provision of Section 238 shall Company Appeal (AT)(CH)(Ins) No.263/2021 Page 7 of 10 become redundant. From the conjoint reading of the provisions of Code, it is clear that in event any provision is not overridden by Section 238, Resolution Plan cannot contravene any existing law."
4. We may also refer to another judgment of this Tribunal in "Company Appeal (AT) (Ins.) No.961 of 2021, Eastern Power Distribution Company of Andhra Pradesh Limited. Vs. Maithan Alloys Limited & Ors., decided on 26.05.2022", where this Tribunal had occasion to consider the judgment of Hon'ble Supreme Court in "Telangana State Southern Power Distribution Company Ltd. & Anr. vs. M/s Srigdhaa Beverages" (supra). Referring to the judgment of Hon'ble Supreme Court following was stated in Paragraph 17:
"17. It is to be noted that the Hon'ble Supreme Court in the above case was considering the Auction Sale under SARFAESI Act, 2002. No provision of IBC were under consideration of the Hon'ble Supreme Court. In the IBC proceedings, the electricity supplier is also an Operational Creditor who files claim for its operational debt as well as the charges during the CIRP period. IBC deals with the claims and require for payment of the claim of the electricity service provider under Section 53 of the Code in a liquidation proceeding. Regulation formed under Electricity Act, 2003 fastening liability on the Successful Auction Purchaser in the Liquidation Proceedings will be in conflict with the provision of the IBC. IBC having been given overriding effect under Section 238, any contrary Company Appeal (AT)(CH)(Ins) No.263/2021 Page 8 of 10 provision in any other statute under Electricity Act, 2003 shall be overridden. Therefore, it shall not be open for the Appellant to contend that Appellant shall recover the entire preCIRP and post-CIRP dues from the Successful Auction Purchaser in pursuance of Regulation 8.4, as noticed above. The Appellant is entitled to recover its dues under the IBC proceedings."
5. We, thus, are of the view that judgment of Hon'ble Supreme Court in "Telangana State Southern Power Distribution Company Ltd. & Anr. vs. M/s Srigdhaa Beverages" (supra) does not help the Appellant in facts of the present case.
6. We do not find any good ground to interfere with the order dated 14.02.2020 passed by the Adjudicating Authority approving the Resolution Plan. There is no merit in the Appeal. The Appeal is dismissed."
8. According to the Learned Counsel for the 'Appellant' in the instant Comp. App. (AT)(CH)(Ins) No.263/2021, there is no distinct ground and had already held by this 'Appellate Tribunal' in 'Comp. App. (AT) (Ins) No.1078/2020' dated 13.12.2019, the instant Comp. App. (AT)(CH)(Ins) No.263/2021 is to be 'dismissed' by following the said 'Judgment'.
In view of the fact that the issues that arises up for consideration in the instant Comp. App. (AT)(CH)(Ins) No.263/2021, is covered by the 'Judgment' of this 'Tribunal' dated 13.12.2022 in Comp. App. (AT) (Ins) Company Appeal (AT)(CH)(Ins) No.263/2021 Page 9 of 10 No.1078/2020, this 'Tribunal' following the same, is left with 'no other option' except to 'dismiss' the instant Comp. App. (AT)(CH)(Ins) No.263/2021 and accordingly 'dismissed' the instant Comp. App. (AT)(CH)(Ins) No.263/2021. No Costs. The connected IA/561/2021 (For 'Exemption' from filing the 'certified copy of the Order' dated 23.06.2021) is Closed.
[Justice M. Venugopal] Member (Judicial) [Shreesha Merla] Member (Technical) ghk/tm Company Appeal (AT)(CH)(Ins) No.263/2021 Page 10 of 10