Synopsis

The petitioner (successful resolution applicant) took over the corporate debtor (Reliance Infracel Ltd.) under an approved resolution plan. The effective date of implementation was 22.12.2022, though NCLT approval was granted on 03.12.2020. Electricity distribution companies raised demands and initiated recovery proceedings for dues pertaining to the period prior to the effective date, despite never having filed claims during the Corporate Insolvency Resolution Process (CIRP). The court held that: (i) IBC overrides the Electricity Act, 2003; (ii) claims not submitted during CIRP stand extinguished under Section 31; (iii) the "effective date" for liability is the date of actual implementation (22.12.2022) due to litigation delays, applying the maxim actus curiae neminem gravabit (act of court shall harm no man); (iv) impugned demands and coercive measures for pre-effective date dues are quashed.

Court: High Court of Judicature at Allahabad

Coram: Hon'ble Mr. Justice Ajit Kumar and Hon'ble Ms. Justice Swarupama Chaturvedi (Division Bench)

Date of Judgment: 24th April 2026

Citation: 2026:AHC:92174-DB (Writ - C No.32408 of 2023)

Core Law: Insolvency and Bankruptcy Code, 2016 – Sections 31, 238; Overriding effect of IBC over Electricity Act, 2003; Clean slate principle

1.  Heading of the judgment

High court of judicature at allahabad

Writ - c no.32408 of 2023

M/s reliance projects and property management services limited (petitioner) vs. State of u.p. and 25 others (respondents)

Coram: hon'ble mr. justice ajit kumar and hon'ble ms. justice swarupama chaturvedi (division bench)

Date: 24th april, 2026

2. Legal framework

Major laws and provisions involved:

• Insolvency and bankruptcy code, 2016 – section 31(1) (resolution plan binding on all stakeholders including government), section 238 (overriding effect over other laws)

• Electricity act, 2003 – sections 173 and 174 (non obstante clauses) – held to be overridden by IBC

• U.p. electricity supply code, 2005 – clause 4.3(f)(iv) (first charge on assets for electricity dues)

• Constitution of india, 1950 – article 226 (writ jurisdiction)

Subject matter of the judgment:

Whether a successful resolution applicant under the IBC can be held liable for electricity dues pertaining to the period prior to the effective date of implementation of the resolution plan, especially when the electricity distribution companies failed to file claims during CIRP and did not challenge the resolution plan, and whether the IBC overrides the provisions of the Electricity Act and the Supply Code.

Key legal principles applied:

• Overriding effect of IBC (Section 238): The IBC prevails over all other laws, including the Electricity Act, 2003, despite the latter containing non obstante clauses. The Supreme Court in Paschimanchal Vidyut Vitran Nigam Ltd. (2023) held that IBC overrides the Electricity Act.

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