# In the matter of Dakshin Gujarat VIJ Company Ltd. Vs. ABG Shipyard Ltd. & Anr. Company Appeal (AT) (Insolvency) No. 334 of 2017

> NCLAT judgment dated 2018-02-08. Citation: TCN-2018-NCLAT-00379. This case involves an appeal regarding whether the order of 'Moratorium' under the Insolvency…

- **Court:** NCLAT
- **Order date:** 8 Feb 2018
- **Citation:** TCN-2018-NCLAT-00379
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/dakshin-gujarat-vij-company-ltd-vs-abg-shipyard-ltd-anr-company-appeal-a9562b09

## Summary

### Background

This case involves an appeal regarding whether the order of 'Moratorium' under the Insolvency and Bankruptcy Code (IBC) covers the current charges payable by the 'Corporate Debtor' for the supply of essential services like water and electricity. The appellant, Dakshin Gujarat VIJ Company Ltd., is seeking payment for electricity supplied to the corporate debtor, ABG Shipyard Ltd. The Resolution Professional requested an extension to pay the current charges up to December 31, 2017. The Appellate Tribunal considered the provisions of the IBC and regulations related to moratorium and essential supplies.

## Facts

Dakshin Gujarat VIJ Company Ltd. (Appellant) supplied electricity to ABG Shipyard Ltd. (Corporate Debtor). An insolvency resolution process was initiated against ABG Shipyard Ltd. A moratorium was imposed under Section 14 of the Insolvency and Bankruptcy Code (IBC). A dispute arose regarding whether the moratorium covered the current electricity charges payable by the Corporate Debtor. The Appellant sought payment for electricity supplied, while the Resolution Professional managed the Corporate Debtor's affairs. The Resolution Professional requested an extension to pay the current charges. The Corporate Debtor had already paid the electricity charges for December 2017. The Appellant argued that the moratorium should not apply to current dues for electricity supply. The

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## Issues and analysis

### Issue 1: Whether the order of ‘Moratorium' will cover the current charges payable by the 'Corporate Debtor' …

**Ratio:** Section 14(2) of the I&B Code mandates that the supply of essential goods or services

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**Reasoning:** The court reasoned that while the moratorium prohibits certain actions against the

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**Interpretation:** The moratorium aims to provide a breathing space for the corporate debtor

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**Application:** In this case, the court held that the moratorium does not prevent the payment

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Dakshin Gujarat…
- **Respondents:** ABG Shipyar…; M/s. ABG Shipyard…

## Timeline

- **2017-12-31 — Payment Extension…**: Resolution Professional requests extension to…
- **2018-01-15 — Appellate Tribu…**: Appellate Tribunal passes an…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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