Legal principle

Once the IBC is triggered, its Section 238 overriding effect bars recovery of the corporate debtor's dues from a liquidation auction purchaser, who cannot be denied a power connection — the creditor must realize its dues only through the Liquidator.

Court decision

The Allahabad High Court allowed the writ petition: it set aside the impugned order dated 15.05.2025, directed the respondents to install the power connection at the petitioner's premises, and held the respondents may collect their dues only from the Liquidator in the liquidation proceedings.

Facts

M/s Dharti Agro Industries Pvt. Ltd., a Delhi-based steel trader, bought the immovable assets of M/s Chaudhary Ingots Pvt. Ltd. — a company in liquidation under the Insolvency and Bankruptcy Code, 2016 — in an online auction by the liquidator, bidding Rs.518.39 lakhs against a reserve of Rs.284.39 lakhs, paying in full and obtaining a sale certificate (07.07.2022), possession letter (27.07.2022) and sale deed (29.05.2024). On applying for a 10 KW electricity connection, respondent PVVNL refused unless the erstwhile owner's outstanding electricity dues (demanded as Rs.4,92,69,142) were cleared. After an earlier writ was disposed of on 10.04.2025 directing a reasoned decision, respondent no.3 by order dated 15.05.2025 rejected the petitioner's representation and held the outstanding dues had to be paid to get the connection. The petitioner then filed the present Article 226 writ petition against that order.

Key provisions

• Section 33(5), Customs Act, 1962 — Unloading and loading of goods at approved places only
• Section 14, Customs Act, 1962 — Valuation of goods
• Section 142A, Customs Act, 1962 — Liability under Act to be first charge