Subsequent Buyer's Post-CIRP Electricity Dues Dispute Outside Insolvency Jurisdiction: NCLT Ahmedabad

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has held that a subsequent purchaser could not invoke its insolvency jurisdiction over an electricity dues dispute that arose after completion of the insolvency process and transfer of the property.

The bench comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma observed, “The declaration sought regarding all dues of the Corporate Debtor is also beyond the scope of the jurisdiction invoked, particularly when the Applicant was not a participant in the CIRP and the present dispute arose after transfer of the property. The finality attached to the Resolution Plan cannot itself constitute a source of jurisdiction under Section 60(5)(c) in favour of a subsequent purchaser.”

The application was filed by Mexmon Buildwell LLP, which had purchased property belonging to Radha Madhav Corporation Ltd. It sought a refund of ₹15.33 lakh paid under protest to Uttarakhand Power Corporation Ltd. towards electricity dues relating to the Corporate Debtor's earlier connection.

Radha Madhav Corporation's Corporate Insolvency Resolution Process (CIRP) ended with approval of a resolution plan on August 1, 2022. Mexmon subsequently purchased the property from the Successful Resolution Applicant through a sale deed dated June 5, 2024.

In December 2025, Mexmon sought a fresh electricity connection for its sub-lessee. UPCL then demanded ₹15,33,793 towards the previous electricity connection standing in the Corporate Debtor's name, which Mexmon paid.

Mexmon sought a declaration that dues relating to the period before approval of the resolution plan, which were not lodged before the Resolution Professional or included in the approved plan, stood extinguished under Section 31 of the Insolvency and Bankruptcy Code. It also sought a refund and 9% annual interest.

Section 31 concerns the binding effect of an approved resolution plan. Section 60(5)(c), meanwhile, allows the insolvency tribunal to decide questions of law or fact arising out of or relating to the insolvency resolution or liquidation proceedings.

The tribunal held that Section 60(5)(c) does not cover every dispute concerning an asset that was once owned by a Corporate Debtor. Here, the CIRP had ended before Mexmon bought the property, and the electricity dispute arose later.

The bench distinguished Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, observing that it recognised the need for a nexus between the dispute and the insolvency resolution process. It found that such a connection was absent here because the dispute arose after completion of CIRP and transfer of the property.

It also distinguished Tata Power Western Odisha Distribution Ltd. v. Jagannath Sponge Pvt. Ltd. and Twentyone Sugar Ltd. v. Maharashtra State Electricity Distribution Co. Ltd. Both cases concerned pre-CIRP electricity dues involving Successful Resolution Applicants, unlike Mexmon, which was a subsequent purchaser.

The bench observed, “The Applicant has therefore failed to establish the jurisdictional requirement under Section 60(5)(c) of the Code. The prayer for refund of Rs. 15,33,793/- arises from the payment made by the Applicant to Respondent No.1 and such payment, by itself, does not bring the dispute within the insolvency jurisdiction of this Tribunal.”

The application was accordingly dismissed on the ground of maintainability.