Bikki Raveendra Babu, Member - (1.) Applicant, Resolution Professional, filed this Application seeking an order to set aside the notice dated 28.9.2017 issued by Dakshin Gujarat Vij Company Limited, [hereinafter referred to as "the Electricity Company"] and restrain the Electricity Company from disconnecting electric supply to M/s. ABG Shipyard Limited [hereinafter referred to as "Corporate Debtor"] till the completion of Corporate Insolvency Resolution Process ["CIRP" for short].
(2.) The facts, that give rise to the filing of this Interlocutory Application, are as follows; 2.1. This Adjudicating Authority, by order dated 1st August, 2017 made in CP (IB) No.53 of 2017 admitted the Petition filed by ICICI Bank Ltd (Financial Creditor) in initiating CIRP in respect of the Corporate Debtor. This Adjudicating Authority appointed Mr. Sundaresh Bhat as 'Interim Resolution Professional ("IRP" for short) and thereafter the Committee of Creditors resolved to continue the IRP as 'Resolution Professional' 2.2. It is the version of the Resolution Professional that he has received a disconnection notice bearing Reference No. Acctt/Rev/HT Disconn.Notice, dated 28.9.2017 from the Respondent no. 2 Electricity Company for non-payment of electric bill for the month of September 2017 wherein it is stated that the electric supply shall be disconnected if the outstanding amounts are not paid. It is the version of the Applicant Resolution Professional that as per Section 14(2) of the Insolvency and Bankruptcy Code, 2016 ["the Code" for short] the supply of essential goods or services to the Corporate Debtor as may be specified shall not be terminated or suspended or interrupted during the moratorium period. It is further stated that this Adjudicating Authority by order dated 1.8.2017 passed an order of moratorium under Section 13 of the Code till the completion of CIRP. It is also stated that "essential goods or services" is defined under Regulation 32 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 [hereinafter referred to as "the Regulations"]. It is also stated that Section 238 of the Code gives overriding effect to the provisions of the Code. It is also stated that if any Creditor violates the provisions of Section 14 the Creditor is punishable as laid down in Section 74(2) of the Code. It is farther stated that if the Electricity Company disconnected the electricity supply to the Surat Unit of the Corporate Debtor 200 employees working in that unit would lose their livelihood.
(3.) On this Application, Notice was given to the Respondent. The Electricity Company appeared through Counsel and filed its Reply, wherein it is stated as follows; 3.1. The Electricity Company issued a Bill for consumption of electricity for the month of September 2017 amounting to Rs. 6,62,254.11/- ps. for H.T. Connection No. 10208 and another bill amounting to Rs. 87,251.25/- ps., for the H.T. Connection No. 10226 for consumption of electricity for the month of September 2017 on 18.9.2017. It is stated that Applicant has to pay the same within 10 days of the date of the bill but the Applicant failed to pay the same. Therefore, the Electricity Company issued notice dated 28.9.2017 under Section 56 of the Electricity Act, 2003 to make payment within 15 days from the date of issue of notice wherein it is stated that if the Applicant failed to make payment of the bill for consumption of electricity charges the connections are liable to be disconnected without further notice as per Section 56 of the Electricity Act, 2003. 3.2. It is further stated in the Reply that on 17.10.2017 the Electricity Company issued a Bill for consumption charges for the month of October 2017 for HT Connection No. 10208 for Rs. 5,67,038.92/- ps., and for HT Connection No. 10226 for Rs. 88,008.29/- ps. According to the Electricity Company the Applicant is liable to pay the said bill also. 3.3. It is the plea of the Electricity Company that the provisions of the Electricity Act, Rules and Regulations framed thereunder are having overriding effect over the provisions of the IB Code, It is further stated that Section 43 of the Electricity Act creates an obligation on a Distribution / Licensee to supply electricity, whereas Section 45 of the said Act gives-power to recover the charges for supply of electricity. Section 56 of the Electricity Act gives power to the licensee to disconnect the power supply in case of failure of payment of electricity consumption charges. There is also a contract between the Electricity Company and the Corporate Debtor to pay the electricity consumption charges as determined by the Electricity Company and therefore there is also a contract which is enforceable. It is further stated that in case the Applicant did not pay the consumption charges there is likelihood of Electricity Company also becoming sick and it is not the object of the IB Code. It is further contended that the Hon'ble Supreme Court, in case of M/s. India Maize & Chemicals Ltd. Vs. State of U.P. & Ors., 1997 9 SCC 462 held that even a sick industrial company has to pay the charges for electricity consumed by it, otherwise its supply can be disconnected. Demand for payment of electricity charges cannot be considered as an execution of a decree. If the Applicant wants the electricity supply continuously then he has to pay the current bills raised by the Electricity Company. It is not stated in the IB Code the Electricity Company should supply electricity without compliance of corresponding obligation of the consumer to pay the bills for current consumption charges as per the contract and as per the Electricity Act, 2003. The Electricity Act, 2003 is a Special Act and it is complete code. The provisions contained in Section 14(2) of the Code are therefore not applicable to this case. Regulation 32 of the Regulations is not applicable to the Distribution Licensee because the Electricity Company is not suspending or terminating or interrupting supply of electricity in case if the Applicant make payment of current bills for consumption of electricity. It is further stated that Section 174 of the Electricity Act, 2003 gives overriding effect over all other laws. It is not stated in Section 238 of the IB Code that the provisions contained under the Electricity Act, 2003, more particularly Section 56 thereof will have no effect or that the provisions of Section 238 of the IB Code will prevail over the Electricity Act, 2003 or shall have overriding effect over it.;