# In the matter of Damodar Valley Corporation Vs. Karthik Alloys Limited & Ors. Company Appeal (AT) (Insolvency) No. 13 of 2021

> NCLAT judgment dated 2022-03-14. Citation: TCN-2022-NCLAT-00578. This case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 14 Mar 2022
- **Citation:** TCN-2022-NCLAT-00578
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/damodar-valley-corporation-vs-karthik-alloys-limited-ors-company-appeal-11514822

## Summary

### Background

This case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai) directing the restoration of power connection to the Corporate Debtor, Karthik Alloys Limited, during the Corporate Insolvency Resolution Process (CIRP). The Appellant, Damodar Valley Corporation (DVC), had disconnected power supply to the Corporate Debtor's Durgapur factory due to non-payment of dues prior to the initiation of CIRP. The Interim Resolution Professional (IRP) requested DVC to restore power supply, arguing it was essential for running the factory. DVC refused, stating that the disconnection occurred before CIRP initiation and that Regulation 32 of the CIRP Regulations did not apply. The Adjudicating Authority ordered reconnection,

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## Facts

Damodar Valley Corporation (DVC) disconnected the electricity supply to Karthik Alloys Limited's Durgapur factory on 2019-09-14 due to non-payment of dues. DVC sent notices on 2019-06-19 and 2019-06-26 demanding payment of Rs. 3,02,14,047 and Rs. 1,09,00,000 respectively. Karthik Alloys Limited failed to make the payments. An application under Section 9 of the Insolvency and Bankruptcy Code (IBC) was filed by Vedanth.com Worldwide Limited, and CIRP was initiated against Karthik Alloys Limited on 2019-12-17. The Interim Resolution Professional (IRP) requested DVC to restore the power supply, stating that it was essential for running the factory. DVC refused, arguing that the disconnection occurred before the CIRP initiation and that the Corporate Debtor was not a 'going

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in directing the restoration of electricity supply to the …

**Ratio:** The Adjudicating Authority has the power to direct the restoration of essential supplies

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**Reasoning:** The NCLAT reasoned that the Adjudicating Authority's order was within its jurisdiction

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**Interpretation:** This implies that the Adjudicating Authority's powers extend to ensuring the

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**Application:** In this case, the Adjudicating Authority's order to restore electricity supply

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…
- **Appellants:** Damodar Valley…
- **Respondents:** Karthik Alloys…

## Timeline

- **1997-01-01 — Power Supply A…**: Damodar Valley Corporation (DVC) and Karthik Alloys Limited entered into a Power Supply…
- **2019-06-19 — Demand N…**: DVC sent a notice to Karthik Alloys Limited…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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