# In the matter of Chaudhary Ingots Pvt. Ltd.

> NCLT judgment dated 2024-04-03. Citation: TCN-2024-NCLT-01844. The case involves an application filed by the liquidator of Chaudhary Ingots Pvt. Ltd. seeking…

- **Court:** NCLT
- **Order date:** 3 Apr 2024
- **Citation:** TCN-2024-NCLT-01844
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/chaudhary-ingots-pvt-ltd-3b48c38c

## Summary

### Background

The case involves an application filed by the liquidator of Chaudhary Ingots Pvt. Ltd. seeking a direction against Paschimanchal Vidyut Vitran Nigam Ltd. (PVVNL) to deposit a security deposit amount of INR 1,04,00,000 along with applicable interest into the liquidation account. PVVNL had adjusted/set-off/retained INR 1,15,33,600 towards electricity dues of the Corporate Debtor, citing provisions of the Electricity Supply Code, 2005. The liquidator contends that this adjustment is contrary to Section 14 and Section 33(5) of the Insolvency and Bankruptcy Code (IBC), 2016, and that the security deposit is an asset of the Corporate Debtor that should form part of the liquidation estate.

## Facts

1. A liquidation order was passed against M/s. Chaudhary Ingots Pvt. Ltd.
2. Sandeep Goel was appointed as the liquidator for Chaudhary Ingots Pvt. Ltd.
3. PVVNL claimed INR 4,04,19,294 from Chaudhary Ingots Pvt. Ltd.
4. PVVNL adjusted INR 1,15,33,600 from the security deposit and interest towards electricity dues.
5. The liquidator requested PVVNL to transfer the security deposit to the liquidation account.
6. PVVNL declined, citing the Electricity Supply Code, 2005.
7. The liquidator conducted an E-auction sale on 2022-04-28.
8. The liquidator contends that PVVNL's actions violate Section 14 and Section 33(5) of the IBC.
9. PVVNL argues that the Electricity Supply Code allows for the adjustment of security deposits.
10. The security deposit was INR 1,04,00,000.
11. Interest on

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## Issues and analysis

### Issue 1: Whether PVVNL's action of adjusting the security deposit against electricity dues is permissible …

**Ratio:** Section 238 of the IBC overrides other laws, including the Electricity Supply Code, if

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**Reasoning:** The court reasoned that allowing PVVNL to adjust the security deposit would be contrary

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**Interpretation:** Section 238 of the IBC has been interpreted to have an overriding effect over

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**Application:** The court applied the ratio to the facts of the case, holding that PVVNL's

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Sandeep…
- **Respondents:** M/S. CHAUDHARY…; Paschimanchal…

## Timeline

- **2019-01-01 — CP (IB) No.356…**: Case filed under CP…
- **2020-01-03 — Commencement of…**: Insolvency of the…

## 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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