Disposed

M/S Belani Sugars LLP v. State of U.P. and 3 Others

Allahabad HC22 May 2023WRIC/15283/2023

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition seeking a new electricity connection for M/s Belani Sugars Llp, acquired from a liquidated company. While initially directing the respondent to consider the application based on insolvency code provisions, the Court later allowed the petition only after the petitioner agreed to deposit a security amount of Rs. 72,261/- for connection energization.

What did the court decide?

Petition allowed with direction to deposit Rs. 72,261/-; electricity connection to be energised within seven days of deposit.

M/S Belani Sugars LLP Vs State of U.P… — Contract and Commercial Disputes | Allahabad HC (2023)

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Neutral Citation No. - 2023:AHC:112477-DB

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Court No. - 3

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Case :- WRIT - C No. - 15283 of 2023

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Petitioner :- M/S Belani Sugars Llp Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- R.K.Paramhans Singh,Devi Prasad Tripathi Counsel for Respondent :- C.S.C.,Kartikeya Saran

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Hon'ble Surya Prakash Kesarwani,J. Hon'ble Anish Kumar Gupta,J.

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1. Heard Sri Devi Prasad Tripathi, learned counsel for the petitioner, Sri Anubhav Chandra, learned Standing Counsel for the respondent no. 1 and Sri Kartikeya Saran, learned counsel for the respondents no. 2 to 4.

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2. On 18.5.2023, this Court passed a detailed order as under:-

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" 1. Heard Sri Devi Prasad Tripathi, learned counsel for the petitioner, Sri Amit Manohar Sahai, learned Additional Chief Standing Counsel for the State respondents and Sri Kartikeya Saran, learned counsel for the respondents no. 3 and 4.

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2. By the impugned order dated 3.04.2023, the respondent no.4 rejected the application of the petitioner for electricity connection on the ground that a sum of Rs. 16,07,286.00 is due against the erstwhile owner, namely, M/s Narsing Dev Sugar Pvt. Ltd. and as such in terms of para 4.3 of the Uttar Pradesh Electricity Supply Code, 2005, new electricity connection to the petitioner cannot be granted unless the electricity dues of the erstwhile owner is paid.

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3. We find that the petitioner had earlier filed Writ C No. 31180 of 2022 (M/S Belani Sugars Llp vs State of U.P. and 3 Others) which was disposed of by order dated 14.2.2023, as under:-

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"Heard Sri R.K. Paramhans Singh, learned counsel for the petitioner and Sri Vinayak Ranjan, holding brief of Sri Kartikeya Saran, learned counsel for the respondent nos. 3 & 4.

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This writ petition has been filed praying for the following relief:-

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"(i) issue a writ order, or direction in the nature of mandamus commanding the respondents to provide new electricity connection for running and operating the M/s Belani Sugars LLP situated at village Saidpur Dutt Nagar, District Baghpat."

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A company named 'M/s Narsing Dev Sugar Private Limited' was liquidated under the provisions of the Insolvency and Bankruptcy Code, 2016. During proceedings under the Code 2016, the respondent nos. 2,3 & 4 have also lodged their claims. Ultimately, some orders were passed by the National Company Law Tribunal, Allahabad Bench, Allahabad. Lastly, the aforesaid unit was transferred as a going concern to the petitioner. Clauses 5.1, 5.2, 5.3 and 5.4 of the agreement dated 18.9.2021 executed between the liquidator and the petitioner are relevant for the

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purpose of the present case which are reproduced below:-

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"5.1 From effective date, all liabilities/ claims including statutory dues, Mandi Samiti dues, Electricity dues , Commercial and Income Tax Dues, and farmers dues pertaining to the period prior to the effective date and whether or not addressed in this agreement, shall extinguish and annulled and will not b the responsibility of the buyer at any time, as against the full and final total consideration of Rs.7,00,00,000/- (Indian Rupees Seven Crores only).

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5.2 All liabilities (including contingent liabilities, statutory dues,Mandi Samiti dues, Electricity dues, Commercial and Income Tax Dues, and farmers dues) of the Corporate Debtor shall be rescinded i.e. current and non-current liabilities ( whether appearing or not in the balance sheet) shall be rescinded extinguished or annulled on the effective date, as against the full and final total consideration of Rs. 7,00,00,000/- (Indian Rupees Seven Crores only).

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5.3 In summary, all the liabilities of the Corporate Debtor shall be rescinded including therein borrowing, current, non-current and contingent liabilities shall be written off/ cancelled/ annulled/reduced extinguished with no further liability to the buyer Company or shall be rescinded in lieu of the consideration as ascribed in this agreement.

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5.4 Upon payment of consideration towards business of the Corporate Debtor, the total dues of the creditors, other creditors towards any liability (including contingent liabilities, statutory dues,Mandi Samiti dues, Electricity dues , Commercial and Income Tax Dues, and farmers dues) shall be deemed settled and paid in total "

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According to the petitioner, the entire consideration in terms of the aforesaid deed/ transfer agreement has been paid by the petitioner. Thus, there is no liability of the petitioner with respect to the electricity dues and yet on account of arrears of Rs.16,017,286/-against the erstwhile company, the electricity connection is not being granted by the respondent nos. 2,3 & 4 to the petitioner.

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We find that in terms of the afore quoted clauses of the deed, the petitioner cannot be denied electricity connection on the ground that there are some arrears against the erstwhile company namely M/s Narsing Dev Sugar Private Limited.

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In view of the aforesaid, we direct the respondent no. 4 to consider the electricity connection application of the petitioner and take an appropriate decision, in accordance with law, within four weeks from the date of submission of a certified copy of this order.

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Writ petition is accordingly disposed of."

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4. Despite a clear finding in the aforesaid order dated 4.2.2023 that the petitioner cannot be denied electricity connection on the ground that there are some arrears against the erstwhile company, namely, M/s Narsing Dev Sugar Private Ltd., yet by the impugned order the respondent no.4 rejected the application of the petitioner for electricity connection relying upon a judgment of Hon'ble Supreme Court in Civil Appeal No. 1815 of 2020 (Telangana State Southern Power Distribution Company Limited & Anr. vs. M/S. Srigdhaa Beverages) decided on 01.06.2020 which relates to the property auctioned by the Syndicate Bank under the SARFAESI Act, whereas in the present set of facts, the order was passed by the National Company Law Tribunal, Allahabad Bench, Allahabad under the

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Insolvency and Bankruptcy Code, 2016. The order of this Court dated 4.2.2023 was in terms of the provisions of the Insolvency and Bankruptcy Code, 2016, and also the law clarified by the Hon'ble Supreme Court in Ghanshyam Mishra and Sons Private Limited through the Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited Through The Director and Others, 2021 SCC Online SC 313 .

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5. The respondents no. 2, 3 and 4 had appeared before the National Company Law Tribunal and submitted their claim towards electricity dues in question and thereafter, it was provided by the NCLT that electricity dues shall stand extinguished and annulled.

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6. Prima facie it appears that the respondent no.4 has arbitrarily and deliberately passed the impugned order and depriving the petitioner from running the industrial unit in question.

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7. In view of the aforesaid, we direct the respondent no. 4-Executive Engineer, Electricity Distribution Divsion-Ist, U.P. Power Corporation Ltd., Baghpat to remain personally present before this Court on 22.05.2023 and show cause as to why the writ petition may not be allowed with exemplary cost.

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8. Put up as a fresh case on 22.05.2023 at 10:00 am ."

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3. Today, learned counsel for the respondents no. 2 to 4 has filed a short counter affidavit dated 22.5.2023 but immediately thereafter placed before us an order of the respondent no.4 dated 22.5.2023 bearing letter no. 1208, which is reproduced below:-

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"पतततकक 1208/वव०वव०खत०-पथम/बतगपत

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वदनततकक22.05.2023

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एतददतरतमत०उचचनरतरतलर, इलतहतबतददतरतरतवचकतसत०सस-31180/2022 ममपतररत वनर वदनततक 14.02.2023 एवतरतवचकतसत०सस-15283/2023 ममपतररतवनर वदनततक 18.05.2023 ककअननपतलनममशसममवहतवमतल, बतललनसशनगरएल०एल०पस०, गतमससदपनर, पमसटदतनगर, जनपदबतगपतकत 50 कक०वस०ए०औदलवगकसतरमजनसवसककतवकरतजतततहस।

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शसममवहतवमतल, बतललनसशनगरएल०एल०पस०गतमससदपनर, पमसटदतनगर, जनपदबतगपत अपनक 50 कक०वस०ए०औदमवगकसतरमजनहकतनसमसतऔपचतररकततरमएवतअवभलकखवटस०सस० ककधनरतवशखणडकतरतरलरममजमतकरनककतकषकरमततवकसतरमजनससमरवनगरतवकरतजत सकक।

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ह०अपठनसर

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4. Learned counsel for the respondents no. 2 to 4 states on instructions that electricity connection in the petitioner's factory shall be energised within a week in case the petitioner deposits the requisite amount of Rs. 72261/- towards electricity connection.

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5 . Learned counsel for the petitioner submits that he is ready to deposit the said

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amount within 48 hours.

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6. In view of the statement made by learned counsel for the parties and the order dated 22.5.2023 passed by the respondent no.4 as aforequoted, we dispose of this writ petition with a direction to the petitioner to deposit the amount of Rs. 72261/-. On deposit, the respondent no. 4 shall ensure that electricity connection to the petitioner is energised within next seven days.

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7. The personal appearance of respondent no. 4, who is present before this Court in pursuance of order dated 18.5.2023, is exempted.

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Order Date :- 22.5.2023 Kirti

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Digitally signed by :- KIRTI SAHU High Court of Judicature at Allahabad

M/S Belani Sugars LLP v. State of U.P. and 3 Others

Case brief

What is this about?

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M/S Belani Sugars LLP v. State of U.P. and 3 Others

Case brief

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