Pre-CIRP Electricity Dues Cannot Be Recovered By Discontinuing Supply During Moratorium: NCLT Ahmedabad

The National Company Law Tribunal (NCLT), Ahmedabad, has held that pre-CIRP electricity dues cannot be recovered from a corporate debtor by interrupting essential or critical electricity supply during the moratorium under the Insolvency and Bankruptcy Code (IBC).

“The Respondent cannot recover or appropriate any pre-CIRP electricity dues from the Corporate Debtor otherwise than in accordance with the insolvency process,” a bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma held.

It added that any interruption or discontinuance of electricity supply for non-payment would be governed by Sections 14(2) and 14(2-A) of the IBC, applicable CIRP regulations and electricity law, subject to payment of dues arising during the moratorium.

CIRP against Mehsana Dairy and Food Products Limited commenced on June 25, 2026, with NPV Insolvency Professional Private Limited, through its director Atul Tandon, appointed as the Interim Resolution Professional (IRP). The moratorium under Section 14 also became operative from that date.

The IRP informed Uttar Gujarat Vij Company Limited (UGVCL) about the CIRP on July 17 and requested continuation of electricity supply. It also asked the distributor to submit its claim for pre-CIRP dues.

According to the IRP, UGVCL officials subsequently visited the corporate debtor's premises with a view to disconnecting supply over the outstanding dues. The IRP said the company had perishable inventory, including ice cream, worth about ₹60–70 lakh in cold storage.

The IRP paid ₹26,40,809.54 towards an electricity bill for May 16 to June 15, 2026, claiming the payment was made to avert disconnection and preserve the inventory. UGVCL disputed this account and denied that its officials had visited with an intention to disconnect the supply.

UGVCL argued that its agreement with the corporate debtor permitted disconnection for non-payment. It also relied on its statutory and contractual rights as an electricity distributor.

The tribunal held that the authorities relied upon by UGVCL did not determine the issue before it. It noted that K.C. Ninan v. Kerala State Electricity Board concerned electricity arrears involving subsequent owners or occupiers and did not, by itself, authorise recovery contrary to the CIRP framework.

The tribunal explained that Section 14(2) protects essential goods and services during the moratorium, while Section 14(2-A) deals with supplies critical for preserving the corporate debtor and keeping it as a going concern. Regulation 32 of the CIRP Regulations includes electricity among essential supplies.

It directed UGVCL to segregate dues preceding June 25 from subsequent charges and submit its pre-CIRP claim before the IRP/RP. It also ordered that existing electricity supply should not be discontinued solely to recover pre-CIRP dues during the moratorium.

The tribunal further directed UGVCL to adjust ₹25,36,224.95 towards the electricity bill for the period beginning June 25, 2026. The application was partly allowed and disposed of, with UGVCL directed to comply within seven days of receiving the order.