# In the matter of Yarn Sales Corporation through Sh. Rajesh Kumar, partner vs. Punjab State Power Corporation Ltd. & Anr.

> NCLAT judgment dated 2024-07-02. Citation: TCN-2024-NCLAT-00363. This appeal challenges the order dated 01.12.2023 passed by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 2 Jul 2024
- **Citation:** TCN-2024-NCLAT-00363
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/yarn-sales-corporation-through-sh-rajesh-kumar-partner-vs-punjab-state-power-cor-fb86e97a

## Summary

### Background

This appeal challenges the order dated 01.12.2023 passed by the Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench), which dismissed I.A. No. 962 of 2022 filed in CP (IB) No. 160/Chd/Pb/2018 by the Appellant under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The case involves a dispute over electricity dues related to a property purchased by the Appellant in a liquidation process of Gian Chand & Sons Pvt. Ltd. (Corporate Debtor). The Appellant sought a new electricity connection without paying the outstanding dues of the Corporate Debtor.

## Facts

Gian Chand & Sons Pvt. Ltd. (Corporate Debtor) was admitted to liquidation on 05.08.2019, and a liquidator was appointed. Respondent No. 1, Punjab State Power Corporation Ltd., submitted a claim of Rs. 34,59,859/- for outstanding electricity dues related to the Corporate Debtor's property. Respondent No. 2 made a public announcement for the sale of the Corporate Debtor's assets, and an auction took place on 18.02.2022. Yarn Sales Corporation, the Appellant, was the highest bidder and purchased the land and building for Rs. 4,30,00,000/-. The sale certificate was issued on 22.03.2022. The property had an electricity connection with Account No. 3002810493, which was disconnected due to non-payment of electricity dues. After purchasing the property, the Appellant

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## Issues and analysis

### Issue 1: Whether the Appellant, being the purchaser of the asset in liquidation, is liable to pay past dues …

**Ratio:** The principle of 'clean slate' under the Insolvency and Bankruptcy Code (IBC) allows a

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**Reasoning:** The court reasoned that insisting on the payment of pre-CIRP electricity dues would

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**Interpretation:** The 'clean slate' principle is interpreted to mean that the successful

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**Application:** In this case, the court applied the 'clean slate' principle to the Appellant,

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## Parties

- **Judges:** Rakesh Kuma…; Indevar P…
- **Appellants:** Yarn Sales…
- **Respondents:** Gian Chand & Sons…; Gian Chand and…; +1 more

## Timeline

- **2019-08-05 — Liquidation A…**: Gian Chand & Sons Pvt. Ltd. (Corporate…
- **2022-02-18 — Auction…**: Auction of the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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