# In the matter of Central Transmission Utility of India Limited vs. Sumit Binani & Ors.

> SC judgment dated 2026-03-23. Citation: TCN-2026-SC-00017. The case involves a dispute over the appropriation of a cash deposit of Rs.108.44 crores made by…

- **Court:** SC
- **Order date:** 23 Mar 2026
- **Citation:** TCN-2026-SC-00017
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/central-transmission-utility-of-india-limited-vs-sumit-binani-ors-99436ce1

## Summary

### Background

The case involves a dispute over the appropriation of a cash deposit of Rs.108.44 crores made by KSK Mahanadi Power Company Limited (KMPCL) with Central Transmission Utility of India Limited (the appellant) prior to the commencement of the Corporate Insolvency Resolution Process (CIRP). The appellant appropriated the deposit against both pre-CIRP and post-CIRP dues.

## Facts

KMPCL entered into a Bulk Power Transmission Agreement (BPTA) with PGCIL (later substituted by the appellant) for long-term access to the Inter-State Transmission System.

KMPCL made a cash deposit of Rs.108.44 crores with the appellant, intended as a Payment Security Mechanism (PSM) in lieu of a Letter of Credit (LoC).

CIRP was initiated against KMPCL on 03.10.2019.

The appellant appropriated the deposit of Rs.108.44 crores against both pre-CIRP and post-CIRP dues.

The RP challenged the appropriation of pre-CIRP dues, arguing it violated the moratorium under Section 14 of the IBC.

The NCLT and NCLAT ruled against the appellant, directing adjustment towards post-CIRP dues.

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## Issues and analysis

### Issue 1: Whether the appropriation of a security deposit towards pre-CIRP dues by the appellant is …

**Ratio:** The appropriation of a security deposit towards pre-CIRP dues is not permissible under

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**Reasoning:** Section 14 of the IBC imposes a moratorium on the initiation or continuation of legal

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**Interpretation:** The moratorium under Section 14 is intended to provide a breathing space to the

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**Application:** In this case, the appellant's appropriation of the deposit towards pre-CIRP

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## Parties

- **Judges:** K. VINOD CH…; Sanjay…
- **Appellants:** Central Transmissi…
- **Respondents:** KMPC…; Sumit B…
- **Other parties:** PGCI…; Resolution…
- **Advocates:** Sri. Shyam…; Ranjitha Ramachand…; +1 more

## Timeline

- **2018-08-01 — Termination…**: PGCIL issued a termination notice…
- **2019-10-03 — CIRP Commen…**: CIRP was initiated…

## 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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