# In the matter of Shriramrathi Steels Private Limited IA No.316-KB-2021 in CP (IB) 391-KB-2018

> NCLT judgment dated 2021-05-07. Citation: TCN-2021-NCLT-02182. This case involves an application filed by SBEG Consultants Private Limited, the purchaser of…

- **Court:** NCLT
- **Order date:** 7 May 2021
- **Citation:** TCN-2021-NCLT-02182
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shriramrathi-steels-private-limited-ia-no316-kb-2021-in-cp-ib-391-kb-2018-3de78c8b

## Summary

### Background

This case involves an application filed by SBEG Consultants Private Limited, the purchaser of the corporate debtor's properties through a public auction held on January 24, 2020. SBEG sought directions from the National Company Law Tribunal (NCLT), Kolkata Bench, to compel Damodar Valley Corporation (DVC) to grant an electricity connection to the factory premises they purchased. The corporate debtor, Shriramrathi Steels Private Limited, was admitted into Corporate Insolvency Resolution Process (CIRP) on August 2, 2018, and subsequently, a liquidation order was passed on June 10, 2019, appointing a liquidator. SBEG was declared the successful bidder in the e-auction, but DVC refused to grant an electricity connection, demanding payment of outstanding dues of

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## Facts

Shriramrathi Steels Private Limited was admitted into Corporate Insolvency Resolution Process (CIRP) on August 2, 2018, and subsequently, a liquidation order was passed on June 10, 2019. During the liquidation process, the liquidator put the assets of Shriramrathi Steels up for auction. SBEG Consultants Private Limited participated in the e-auction and was declared the successful bidder on January 24, 2020, for a bid of ₹15.30 crore. A Slump Sale Agreement was executed on June 11, 2020. SBEG paid the entire sale consideration by March 24, 2020, but the liquidator did not issue a sale certificate. SBEG applied to Damodar Valley Corporation (DVC) on October 1, 2020, for an electricity connection to the factory premises purchased in the auction. DVC responded on December

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## Issues and analysis

### Issue 1: Whether Damodar Valley Corporation (DVC) can demand outstanding electricity dues from SBEG …

**Ratio:** The principle that an auction purchaser is generally not liable for the dues of the

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**Reasoning:** The NCLT considered the arguments from both sides, including the precedents cited by SBEG

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**Interpretation:** The legal issue involves the interpretation of the rights and obligations of an

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**Application:** In this specific case, the ratio and reasoning were applied to stay DVC's

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** SBEG Consultants…
- **Respondents:** Shriramrathi…; Rakesh Kumar…

## Timeline

- **2018-08-02 — Admission in…**: Shriramrathi Steels Private Limited was admitted into Corporate Insolvency Resolution…
- **2019-06-10 — Liquidation…**: An order of liquidation was passed for…

## 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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