NCLAT Upholds DGVCL's ₹8.3 Crore Pre-Insolvency Deposit Adjustment Towards Sumeet Industries' Electricity Dues

The National Company Law Appellate Tribunal (NCLAT) at Delhi has refused to reopen a dispute involving more than ₹12 crore in electricity dues and security deposit adjustments concerning Sumeet Industries Ltd.

It held that disturbing the issue after approval and implementation of the resolution plan would unsettle settled commercial rights.

A bench of Chairperson Justice Ashok Bhushan and Technical Member Indevar Pandey also observed that reopening the dispute after the resolution plan had attained finality and implementation had commenced would disturb settled commercial rights.

“The amounts involved exceeds Rs.12 crores. At a stage where the Resolution Plan has already attained finality and implementation has commenced, any direction for restoration of such substantial amounts would necessarily impact the financial assumptions and settled commercial rights arising out of the approved Resolution Plan. This would amount to modification of the plan after the approval of the same by the Adjudicating Authority,” the bench observed.

The appellate tribunal was hearing Sumeet Industries' challenge to Dakshin Gujarat Vij Company Ltd.'s adjustment of its ₹8.30 crore electricity security deposit against outstanding dues.

Sumeet Industries argued that the adjustment was made only after the company entered insolvency proceedings. It said the moratorium had already come into force by then.

The company also alleged that DGVCL appropriated another ₹3.78 crore from payments made during the insolvency process. According to Sumeet Industries, those payments were wrongly adjusted against pre-insolvency dues.

DGVCL, however, maintained that the decision to appropriate the security deposit had already been taken on 14 December 2022. This was before Sumeet Industries was admitted into the insolvency process on 20 December 2022.

It said the later reflection of the adjustment in bills and claim documents was only an accounting exercise. According to DGVCL, the actual decision had already been taken earlier.

The tribunal accepted that explanation. It held that the office note dated 14 December 2022 showed a concluded decision by the competent authority to adjust the security deposit before insolvency proceedings began.

“The decision to adjust the Security Deposit, on the other hand is a commercial decision based upon the past payment behaviour of the consumer and is not linked to the statutory notice for disconnection under Section 56 of the 'Electricity Act'. There is no legal or administrative bar on initiation of both these actions independently and concurrently. We therefore find no infirmity in the actions of the Respondent No.1,” the tribunal ruled

The tribunal also noted that DGVCL's adjusted claim had been accepted during the insolvency process. It said the claim had been factored into the resolution plan approved in favour of Eagle Group, the successful resolution applicant.

The tribunal held that Sumeet Industries had failed to establish that the appropriation happened after commencement of insolvency proceedings.

“Upon an overall consideration of the factual matrix, we find that the Appellant has failed to conclusively establish that the appropriation of the Security Deposit was affected after commencement of CIRP,” the tribunal held.

The appeal arose from a November 27, 2025 order of the Ahmedabad bench of the National Company Law Tribunal. The tribunal had rejected Sumeet Industries' plea seeking restoration of the security deposit and refund of amounts allegedly adjusted towards pre-insolvency dues.