Synopsis

Two writ petitions were filed by successful resolution applicants (South East U.P. Power Transmission Company Ltd. and Tata Steel Ltd.) challenging demand notices issued by electricity distribution companies for dues pertaining to periods prior to the approval of their respective resolution plans under the IBC. The electricity authorities had neither filed claims during the CIRP nor objected to the resolution plans before the NCLT. The court held that: (i) IBC overrides the Electricity Act, 2003 by virtue of Section 238, despite the latter containing non obstante clauses; (ii) public announcement under Section 15 IBC constitutes sufficient notice to all stakeholders, including statutory authorities; (iii) claims not filed during CIRP or not forming part of the approved resolution plan stand extinguished under Section 31; (iv) the "clean slate" principle entitles the successful resolution applicant to be free from past liabilities except those expressly preserved in the plan. The impugned demands for pre-CIRP period were quashed, but authorities were given liberty to issue fresh demands for post-resolution period.

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:92069-DB (Writ - C No.19391 of 2023 and Writ - C No.17846 of 2025)

Core Law: Insolvency and Bankruptcy Code, 2016 – Sections 31, 238; Electricity Act, 2003 – Sections 173, 174; Clean slate principle; Overriding effect of IBC

1.  Heading of the judgment

High court of judicature at allahabad

Writ - c no.19391 of 2023 and writ - c no.17846 of 2025

South east u.p. power transmission company limited (petitioner) vs. Prescribed authority and 4 others (respondents)

And

M/s tata steel limited (petitioner) vs. State of u.p. and 3 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), section 15 (public announcement), section 3(6) (definition of claim)

• 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)

• Constitution of india, 1950 – article 226

Subject matter of the judgment:

Whether electricity distribution companies can raise demands for pre-CIRP dues after approval and implementation of a resolution plan under the IBC, when they did not file any claim during the CIRP and did not object to the resolution plan before the NCLT; and whether the IBC overrides the Electricity Act, 2003 in such matters.

Key legal principles applied:

• Overriding effect of IBC (Section 238): The IBC, being a later comp

... Upgrade to a Premium Plan to view the full judgment.