The clean slate principle – The Successful Resolution Applicant cannot be insisted to pay the arrears payable by the Corporate Debtor for the grant of an electricity connection in her/his name – Tata Power Western Odisha Distribution Ltd. (TPWODL) & Anr. Vs. Jagannath Sponge Pvt. Ltd. Director – Supreme Court
The Appellant contends that electricity dues required to be paid before Electricity Connection can be given to the Corporate Debtor.
Hon’ble Supreme Court held that the appellant – Tata Power Western Odisha Distribution Limited cannot insist on payment of arrears, which have to be paid in terms of the waterfall mechanism, for grant of an electricity connection. However, the successful resolution applicant will have to comply with the other requirements for grant of electricity connection. The clean slate principle would stand negated if the successful resolution applicant is asked to pay the arrears payable by the corporate debtor for the grant of an electricity connection in her/his name.
Also, it was held that the issue of corporate debtor’s dues falls within the fold of the phrase ‘arising out of or in relation to insolvency resolution’ under section 60(5)(c) of the Code.
