Case Law Details
Tata Power Western Odisha Distribution Limited Vs Jagannath Sponge Prviate Limited (NCLAT Delhi)
Introduction: The National Company Law Appellate Tribunal (NCLAT) recently delivered a significant verdict in the case between Tata Power Western Odisha Distribution Limited and Jagannath Sponge Private Limited. This case revolved around the issue of service connection application and the demand for payment of arrears.
Analysis: The core of the dispute lies in the payment of arrears amounting to Rs. 13,46,19,931, which Tata Power claimed from Jagannath Sponge Pvt Ltd for electricity dues. The Adjudicating Authority, the National Company Law Tribunal (NCLT), Cuttack, had earlier given a judgment that the amount claimed was not valid, primarily since Tata Power did not file a claim during the Corporate Insolvency Resolution Process (CIRP). Moreover, the NCLT directed that the application for service connection should be considered without insisting on any arrear payments prior to the date of the plan’s approval.
On challenging this at the NCLAT, the appellant (Tata Power) presented arguments that the outstanding dues need to be cleared before providing any electricity connection. They also contended about improper publication by the Resolution Professional, which prevented them from filing their claim in the CIRP.
However, the NCLAT supported the earlier judgment, referencing a Supreme Court Judgment that if dues (including statutory dues) aren’t part of the resolution plan, they stand extinguished. Thus, the continuation of proceedings regarding such dues becomes irrelevant.
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