Payment of dues: IBC overrides provision of the Electricity Act

Last updated: 26 July 2023
Quick Summary
The Supreme Court has ruled that Section 238 of the Insolvency and Bankruptcy Code (IBC), 2016, takes precedence over the provisions of the Electricity Act, 2003. This means that an electricity supplier's claim for unpaid dues will be treated under the IBC's liquidation process, rather than having priority under the Electricity Act. The court confirmed that such dues do not fall under specific priority categories within the IBC and will be handled as a secured operational creditor's claim.

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court in the matter of Paschimachal Vidyut Vitran Nigam Limited v. Raman Ispat Private Limited [Civil Appeal No. 7976 of 2019 dated July 17, 2023] held that Section 238 of the Insolvency and Bankruptcy Code, 2016 ("IBC") overrides the provisions of the Electricity Act, 2003. 

Citation :
Civil Appeal No. 7976 of 2019 dated July 17, 2023

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