# In the matter of Empee Distilleries Limited vs. The Superintending Engineer & Ors.

> HC judgment dated 2025-04-02. Citation: TCN-2025-HC-00027. M/s.Empee Distilleries Limited faced adjudication under the Insolvency and Bankruptcy Code due to…

- **Court:** HC
- **Order date:** 2 Apr 2025
- **Citation:** TCN-2025-HC-00027
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/empee-distilleries-limited-vs-the-superintending-engineer-ors-9c27a7ad

## Summary

### Background

M/s.Empee Distilleries Limited faced adjudication under the Insolvency and Bankruptcy Code due to financial debt. The NCLT approved the resolution plan of M/s.SNJ Distilleries Private Limited on 20.01.2020, but a miscellaneous application by the promoters/directors was dismissed. The promoters appealed to the NCLAT, which confirmed the NCLT's order. TANGEDCO, with a claim of Rs.1,23,69,195/-, did not participate in the resolution process. The resolution applicant sought electricity reconnection, but TANGEDCO refused due to uncleared statutory debt. The appellant contended that M/s.Empee Distilleries Limited underwent CIRP, and SNJ Distilleries offered Rs.475 crores, approved by the COC on 22.07.2019 and NCLT on 20.01.2020. Rs.154.28 crores was paid to secured

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## Facts

M/s.Empee Distilleries Limited faced insolvency proceedings under the IBC. A resolution plan was approved by the NCLT and NCLAT. TANGEDCO, an electricity provider, had a claim of Rs.1,23,69,195/- but did not participate in the CIRP. The resolution applicant sought electricity reconnection, which TANGEDCO refused due to unpaid statutory debt. TANGEDCO disconnected electricity service SC No.125 in 2019 for nonpayment of current consumption charges. The appellant argued that the CIRP extinguished the debt, citing Sections 31(1) and 238 of the IBC. TANGEDCO contended that the 'clean slate theory' does not apply and that the subsequent purchaser is liable for the dues. A substantial portion of the due, Rs.1,14,80,039/-, relates to a revised start-up power tariff, which was

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## Issues and analysis

### Issue 1: Whether the 'clean slate theory' applies to TANGEDCO, a functional creditor that did not …

**Ratio:** The 'clean slate theory' generally provides that after approval of a resolution plan

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**Reasoning:** The court reasoned that the 'clean slate theory' cannot be invoked if the debt was not

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**Interpretation:** The court interpreted that the 'clean slate theory' is not absolute and is

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**Application:** In this case, the court found that the IRP and promoters failed to disclose the

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## Parties

- **Judges:** DR.JUSTICE…; MS.JUSTICE…
- **Respondents:** M/s. Empee…; The Superintending…
- **Other parties:** Kohi…

## Timeline

- **2018-11-01 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against M/s.Empee Distilleries…
- **2019-07-22 — COC Appr…**: Committee of Creditors (COC) approved the offer…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 43 — Preferential transactions and relevant time](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-43)

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