IDBI Bank Ltd. Vs S Kumars Nationwide Ltd. (NCLT Mumbai)
NCLT Mumbai held that the claims of electricity department stand settled on distribution of liquidation estate by the liquidator. Hence, withholding of electricity connection due to payment of dues prior to issuance of sale certificate not justified.
Facts- CIRP of the corporate debtor commenced on 24.04.2018. During the liquidation process, the properties of the corporate debtor were put to e-auction and upon applicant emerging as the successful purchaser and having paid the entire sale consideration, were sold to the Applicant. After acquisition, the applicant applied for connection of electricity. However, Respondent No.1 has refused to provide the electricity connection on account of past dues amounting to Rs. 99,49,857/-.
Conclusion- It is well settled law that the claim filed with the liquidator as on commencement of the liquidation stands settled in accordance with the provisions of section 53 of the Code. Therefore, the amount demanded by R-1 filed through their claim before the liquidator cannot be demanded any more as the same get extinguished after the distribution of the assets of the corporate debtor in accordance with the waterfall mechanism provided under Section 53 of IBC.
Held that the claims of R-1 shall stand settled on distribution of liquidation estate by the liquidator, in accordance with the ‘waterfall mechanism’ provided under section 53 of the Code. Upon receipt of payment from liquidator as per Section 53 of the Code, the admitted claims of R-1 shall stand settled and we direct R-1 not to demand past dues once payment is received from the liquidator for the claim amount already admitted by the liquidator.
