# In the matter of Shailesh Verma
Vs.
Maharashtra State Electricity Distribution
Company Limited Company Appeal (AT) (Insolvency) No. 383 of 2022

> NCLAT judgment dated 2022-09-02. Citation: TCN-2022-NCLAT-00241. This appeal was filed by the Resolution Professional of Lavasa Corporation Limited,…

- **Court:** NCLAT
- **Order date:** 2 Sept 2022
- **Citation:** TCN-2022-NCLAT-00241
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/shailesh-verma-vs-maharashtra-state-electricity-distribution-company-limited-com-074c4bdd

## Summary

### Background

This appeal was filed by the Resolution Professional of Lavasa Corporation Limited, challenging an order dated 21.01.2022 passed by the National Company Law Tribunal (NCLT), Mumbai Bench-Court II. The NCLT order partly allowed IA No. 1661 of 2021, which was filed by the Resolution Professional. The NCLT directed the Respondent (Maharashtra State Electricity Distribution Company Limited - MSEDCL) not to take over the Distribution Franchisee Agreement (DFA) and to continue supplying uninterrupted electricity to the Corporate Debtor. The Resolution Professional was also directed to pay the outstanding dues during the Corporate Insolvency Resolution Process (CIRP) period within 90 days. The Resolution Professional appealed against the part of the order that directed

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## Facts

Lavasa Corporation Limited (Corporate Debtor) entered into a Distribution Franchisee Agreement (DFA) with Maharashtra State Electricity Distribution Company Limited (MSEDCL) on 15.03.2011, under which MSEDCL was to supply electricity at certain injection points from where the electricity was to be further supplied to consumers in the township through distribution infrastructure of the Corporate Debtor. The DFA expired on 24.10.2019. MSEDCL informed the Corporate Debtor by letter dated 09.07.2021 about its intention not to renew the DFA and to take over the Distribution Franchisee. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was commenced on 30.08.2018 by an order of the Adjudicating Authority. The Appellant was appointed as

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was right in issuing direction to the Appellant to make payment …

**Ratio:** Section 14(2) of the IBC provides that the supply of essential goods or services to the

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**Reasoning:** The tribunal reasoned that when the Corporate Debtor has opined that the supply of

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**Interpretation:** Section 14(2) read with the explanation to Section 14(1) and Section 14(2-A)

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**Application:** In this case, the Corporate Debtor took a decision that the supply of

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## Parties

- **Judges:** Ashok Bh…; M. Satyanarayana…; +1 more
- **Appellants:** Shailesh…
- **Respondents:** Lavasa Corporation…; MAHARASHTRA STATE…
- **Advocates:** Sumesh D…; Kriti Ka…; +6 more

## Timeline

- **2011-03-15 — DFA Agre…**: Lavasa Corporation Limited entered into a Distribution Franchisee Agreement (DFA) with…
- **2018-08-30 — CIRP Commen…**: Corporate Insolvency Resolution Process (CIRP) against Lavasa Corporation Limited…

## 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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