# Paschimanchal Vidyut Vitran Nigam Ltd. Vs. Raman Ispat Pvt. Ltd. & Ors. [Civil Appeal No. 7976 of 2019]

> SC judgment dated 2023-07-17. Citation: TCN-2023-SC-00064. The case involves an appeal by Paschimanchal Vidyut Vitran Nigam Limited (PVVNL) against an order…

- **Court:** SC
- **Order date:** 17 Jul 2023
- **Citation:** TCN-2023-SC-00064
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/paschimanchal-vidyut-vitran-nigam-ltd-vs-raman-ispat-pvt-ltd-ors-0fd2fe95

## Summary

### Background

The case involves an appeal by Paschimanchal Vidyut Vitran Nigam Limited (PVVNL) against an order of the National Company Law Appellate Tribunal (NCLAT) which rejected PVVNL's appeal against an order of the National Company Law Tribunal (NCLT), Allahabad. The NCLT had allowed an application directing the District Magistrate and Tehsildar, Muzaffarnagar, to release property attached at PVVNL's request in favor of the liquidator of Raman Ispat Pvt. Ltd. (corporate debtor). This release was to enable the sale of the property and distribution of proceeds under the Insolvency and Bankruptcy Code, 2016 (IBC).

## Facts

1. An agreement was entered into on 2010-02-11 for the supply of electricity, with Clause 5 stating outstanding dues would be a charge on the company's assets.
2. PVVNL raised bills for electricity supply to Raman Ispat Private Limited (corporate debtor), which remained unpaid.
3. PVVNL attached the corporate debtor's properties on 2016-01-12, and the Tehsildar restrained transfer of property on 2016-01-23, creating a charge on the properties.
4. The corporate debtor underwent a resolution process under the IBC, which was unsuccessful, leading to liquidation.
5. The final bill dated 2017-01-27 showed total arrears of ₹4,32,33,883/-, and the District Collector issued a recovery notice for ₹2,50,14,080/- by auction on 2018-03-05.
6. The liquidator alleged that the attachment

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## Issues and analysis

### Issue 1: Whether electricity dues owed to Paschimanchal Vidyut Vitran Nigam Limited (PVVNL) constitute a …

**Ratio:** The creation of a charge need not necessarily be based on an express provision of the

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**Reasoning:** The court reasoned that Clause 4.3(f)(iv) of the Supply Code, read with the stipulations

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**Interpretation:** The court interpreted the relevant clauses of the Electricity Supply Code and

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**Application:** The court applied the ratio to the specific facts of the case, noting that the

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## Parties

- **Judges:** S. Ravindr…; DIPANKAR…
- **Appellants:** Paschimanchal…
- **Respondents:** Raman Ispat Pvt.…; RAMAN ISPAT…
- **Other parties:** 7th Edition…; Secured operationa…; +8 more

## Timeline

- **2010-02-11 — Agreement for…**: Parties entered into an agreement for the supply of electricity, with a clause stating…
- **2016-01-12 — Attachment of P…**: PVVNL attached the corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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