Resolution Plan Dues Preceding Effective Date are Extinguished; IBC Overrides Contrary Statutory Charges Under Electricity Laws.

The Petitioner, having merged with Reliance Infratel Ltd. (RITL), challenged recovery certificates and kurki proceedings issued by state DISCOMs for electricity dues pertaining to the period before the Petitioner took over the company.

In 2018, RITL entered Corporate Insolvency Resolution Process (CIRP). Despite public announcements and direct letters from the Resolution Professional (RP) inviting claims, the respondent authorities failed to submit any claims during the CIRP.

A resolution plan was approved by the NCLT on 03.12.2020 and upheld by the Supreme Court on 10.08.2021.

Due to inter-creditor litigation, the plan was effectively implemented only on 22.12.2022, when the resolution amount was deposited.

Post-implementation, Respondents raised demands for pre-takeover dues, leading to tower sealings and disconnections.

1. Whether the IBC overrides electricity laws, barring demands for pre-resolution periods after plan implementation.

2. Whether statutory authorities can raise demands after failing to file claims during the CIRP.

3. Whether liability can be imposed for the duration prior to the 'Effective Date' (22.12.2022) of the plan's implementation.

4. Whether the impugned recovery certificates and coercive measures are legally sustainable.

The Court applied Section 238 of the IBC, which mandates that the Code overrides any inconsistent provisions in other laws, including the Electricity Act, 2003.

Section 31(1) of the IBC, which makes an approved resolution plan binding on all stakeholders, including State Governments and statutory authorities.

The "Clean Slate" doctrine established in Ghanshyam Mishra v. Edelweiss Asset Reconstruction Co. Ltd. (2021), holding that claims not part of the resolution plan stand extinguished.

Principle from Arcelor Mittal India Pvt. Ltd. v. Satish Kumar Gupta (2019) regarding the exclusion of time lost in litigation and the legal maxim actus curiae neminem gravabit (the act of the court shall prejudice no one).

The Court reasoned that the IBC’s non-obstante clause (Section 238) ensures the finality of the resolution process by prevailing over sector-specific statutes like the Electricity Act.

Since the Respondents failed to lodge claims despite due notice, their past dues were extinguished upon the Plan's approval.

Regarding the "Effective Date," the Court noted that while the NCLT approved the plan in 2020, implementation was stalled by third-party litigation until 2022.

Applying the maxim actus curiae neminem gravabit, the Court held that the Petitioner could not be penalized for delays caused by judicial proceedings.

The Court upheld the commercial wisdom of the Committee of Creditors (CoC), which had explicitly defined the "Effective Date" as the date of deposit (22.12.2022) in the resolution plan.

Consequently, any demand for the period prior to this date constitutes an attempt to recover extinguished debts, which violates the "clean slate" principle.

It held that all pre-CIRP, CIRP-period, and monitoring-phase dues not included in the resolution plan stood extinguished.

The Court declared 22.12.2022 as the "Effective Date" for the commencement of the Petitioner's liability.

The Respondents were granted liberty to issue fresh demands only for electricity consumed post-22.12.2022.