Meghalaya High Court
2025:Mlhc:365-Db vs M/S Reliance Infratel Limited on 7 May, 2025
Author: W. Diengdoh
Bench: W. Diengdoh
2025:MLHC:365-DB
Serial No.01
Daily List
HIGH COURT OF MEGHALAYA
AT SHILLONG
WA No.37/2024 with
MC (WA) No.19/2024
Date of CAV : 09.04.2024
Date of pronouncement : 07.05.2025
Meghalaya Power Distribution Corporation Limited (MePDCL),
represented by the Director of Distribution, Meghalaya Energy
Corporation Limited (MePDCL), Lumjingshai, Short Round Road,
Shillong-793001, East Khasi Hills District, Meghalaya. ..... Appellant
Vs.
1. M/s Reliance Infratel Limited, having its registered office at H Block,
1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai,
Maharashtra-400710.
2. Manish Nath, authroised signatory of RITL having its office at RITL,
H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai,
Maharashtra-400710.
3. M/s Reliance Jio Infocomm Limited having its registered office at
office 101, Saffron Nr. Centre Point, Panchwati 5 Rasta, Ambawati,
Ahmedabad, Gujarat-380006.
4. M/s Summit Digital Infrastructure Limited having its registered office
at Unit-2, 9th Floor, Tower-4, Equinow, Business Park, LBS Marg, Kurla
(W) Mumbai City, Maharashtra-400070. ...... Respondents
Coram:
Hon'ble Mr. Justice I.P. Mukerji, Chief Justice
Hon'ble Mr. Justice W. Diengdoh, Judge
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Appearance:
For the Appellant : Mr. A. Kumar, Advocate General with
Mr. A.S. Pandey, GA
Ms. R. Colney, GA
For the Respondents : Mr. N. Venkataraman, Sr. Adv with
Mr. A. Swarup, Adv
Mr. V.V. Sastry, Adv
Mr. V. Vappangi Sai Prasad, Adv
Mr. Bhavuk Agarwala, Adv
Mr. S. Jindal, Adv
Mr. I. Kharmujai, Adv
F
i) Whether approved for Yes
reporting in Law journals etc.:
ii) Whether approved for publication Yes/No
in press:
Note: For proper public information and transparency, any media
reporting this judgment is directed to mention the
composition of the bench by name of judges, while reporting
this judgment/order.
JUDGMENT
(Delivered by the Hon’ble, the Chief Justice)
Admittedly, the first respondent was the consumer of electricity. It
received electricity supply from the appellant to operate mobile towers in
the State of Meghalaya. There is no question that the electricity
consumption dues of this respondent towards the appellant remains
unpaid.
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The Corporate Insolvency Resolution process which this
respondent has undergone since 2018 is now used as a shield by this
respondent to avoid its liability towards the appellant. A lot of business
and legal acumen is involved in framing the cause of action in the instant
writ petition, preferred by this respondent.
Nevertheless, a very substantial point has been raised, which is
worthy of very active consideration.
The appellant, for whatever reason did not submit its claim before
the Corporate Insolvency Resolution Professional under the Insolvency
and Bankruptcy Code, 2016. The above debt of the first respondent was
not reflected in the corporate insolvency resolution plan or in the
statements of financial position of the corporate debtor i.e. the first
respondent, which accompany this resolution plan. The plan was
approved by the adjudicating authority, NCLT.
Now, the first respondent filed the instant writ petition claiming a
declaration that the appellant could no longer claim from them the above
outstanding due before the effective date of this resolution plan as they
were not included in the debts of the said respondent mentioned in the
plan. Therefore, all such claims or dues on account of electricity
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consumption by the said respondent to the appellant stood
“extinguished”.
Two companies M/s Reliance Jio Infocom Limited and M/s
Summit Digital Infrastructure Limited are made proforma respondents in
the writ. They are the third and fourth respondents in the appeal. They are
group companies or companies controlled by or having close connection
with the first respondent.
The writ was against the State of Meghalaya and the Meghalaya
Power Distribution Corporation Limited, the first and second respondents
in the writ. Only the Meghalaya Power Distribution Corporation Limited
is the appellant in this appeal. This is a procedural error. The cause title
cannot be changed.
Now, it appears that the first respondent obtained power supply
from the appellant to operate its mobile towers or for the operation of
mobile towers by its said group companies in the State of Meghalaya.
On 12th June, 2023, the appellant issued a notice to the third
respondent claiming electricity consumption charges as on 31st May,
2023. The notice said that there were 116 mobile towers with power
supply and having outstanding electricity dues of more than ₹5000/- each.
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There were 60 disconnected mobile towers whose total dues were
₹2,00,74,807/-. Additionally, there were 18 mobile towers with power
supply having outstanding electricity dues of ₹5000/- or less. The
particulars of those outstanding dues were meticulously incorporated in
an annexure to the notice. The third respondent was asked to clear the
dues in the notice failing which the appellant would cut off electricity
supply to all the aforesaid mentioned towers including those towers for
which there were no dues.
There is no dispute that the recipient of the notice, the third
respondent was not the consumer of electricity but it does appear from the
records that the first respondent was the consumer and that the third
respondent, treated as a group or associate company of the first
respondent was threatened with disconnection of electricity supply for the
dues of the first respondent.
It is not the case of the first or the third respondent that the
appellant was not entitled to disconnect electricity supply of the third
respondent for the actual and legitimate outstanding electricity dues of the
first respondent in respect of the above mobile towers.
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The case that was sought to be run by the first respondent as would
more elaborately appear in the facts of the case discussed in this judgment
was that it had no dues towards the appellant. Such dues being prior to
22nd December, 2022 had been “extinguished” by sanction of the
Corporate Insolvency Resolution Plan by the adjudicating authority,
NCLT under the Insolvency and Bankruptcy Code, 2016, as this
Corporate Insolvency Resolution Plan did not include the alleged debt of
the first respondent to the appellant.
The contention of Mr. N. Venkataraman, learned Senior counsel
appearing for the first respondent is that his client formerly known as
Reliance Telecom Limited had undergone a Corporate Insolvency
Resolution process duly complying with the provisions of the Insolvency
and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”). On
25th November, 2019, Reliance Projects and Property Management
Solutions Limited had submitted a Corporate Insolvency Resolution Plan
for the acquisition of the first respondent which was approved with terms
and conditions by the NCLT on 3rd December, 2020.
The appellant had not submitted any claim for the electricity dues
of the first respondent towards it, with the resolution professional.
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According to this approval, it was to be effective from 22nd December,
2022. All claims against the corporate debtor first respondent, not
claimed or not included in the resolution plan, prior to 22nd December,
2022 stood extinguished, learned counsel asserted.
In the writ the first respondent sought a declaration to this effect.
The argument which followed was that if the consumer or beneficiaries of
power supply had no debts before the effective date towards the
appellant, then any claim on it would also not lie.
Apart from declaration, in the writ the first respondent also wanted
quashing of the demand notice dated 12th June, 2023.
The appellant took two preliminary points of objection.
The first was that the demand if any was against the third
respondent which was an independent corporate body. They had not
taken any proceedings to challenge the notice dated 12 th June, 2023. The
first respondent had no locus standi to challenge a notice which was
addressed to the said other respondent.
The appellant also contended that the respondents had adequate
alternative remedy under Section 60(5) of the Code. The writ jurisdiction
of the Court ought not to have been invoked or exercised.
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Law on the subject
The Companies Act, 1956 was replaced by the Companies Act,
2013. In 2016 the Insolvency and Bankruptcy Code was enacted by
Parliament.
During the regime of the earlier Companies Act, separate rights
were conferred with different types of reliefs in various parts of the
statute. In one part, there were provisions for voluntary winding up of a
company and winding up on the ground of inability to pay its debts. In
another part there were provisions for introduction by the company or its
creditors, contributors and schemes of amalgamation, restructuring,
merger etc. of companies on such terms as the Court considered fit and
proper.
When a company was ordered to be wound up by the court on its
inability to pay its debts, the Official Liquidator took custody of its assets
and liabilities on behalf of the court. Ultimately the assets were sold. The
claims of the creditors of the company were invited by the Official
Liquidator and settled by him and approved by the Court. The Act itself
provided a claim payment procedure by stipulating priorities of claims
and pro rata disbursement from the fund realised on sale of assets of the
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company. Once the Official Liquidator took control of the Company (in
liquidation), the creditors lost their right to realise the full amount of their
claims.
More often than not, the court became interested in the revival of
the company or in its running as a going concern at the instance of a
creditor or contributory or the workers of the company. To facilitate this
effort, it would stay the winding up order. It would proceed to consider
and approve a scheme for revival or the running of the company as a
going concern under the said other part of the Companies Act referred to
above, on notice to all creditors, contributories and other stakeholders.
The scheme proposed by an interested person which necessarily had to
provide for payment to creditors to liquidate their dues would have to be
approved by the Court and allowed to be implemented subject to such
modification as the Court may make in it from time to time. The winding
up application would be adjourned to await the result of the working of
the scheme. If the scheme worked out successfully, the winding up
application would no longer be proceeded with. Otherwise, the company
would be wound up, its assets sold and proceeds distributed to its
creditors.
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It is quite clear from the present enactment that the intention of the
Legislature now in the Code is to make an endeavour for revival of the
corporate debtor described in Section 2 (8) of the Code instead of
proceeding straight away to liquidate it.
Amongst other persons, an operational creditor is defined as a
person to whom operational debt is owed or assigned in Section 5 (20) of
the Code. Under Section 6 he initiates Corporate Insolvency Resolution
proceedings, which is also described as commercial insolvency
proceedings in Section 16. If the corporate debt is found substantiated,
the adjudicating authority which is the NCLT [Section 5(1)] admits the
application under section 7 (5) of the Code. Under Section 12, it is
required to complete these proceedings within 180 days. Sections 13 and
15 empower the NCLT, the adjudicating authority to make a public
announcement to the effect that it had admitted the proceeding and
concurrently invite claims against the corporate debtor. The last date for
submission of claims is required to be mentioned in the announcement.
At the same time in exercise of its powers under Sections 16, 17, 18, 20
and 21, the adjudicating authority may appoint an interim resolution
professional to run the corporate debtor as a going concern and to
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preserve and protect the value of its property and also to declare
moratorium with regard to the claims against the corporate debtor. The
interim resolution professional is required to collate all claims received
against the corporate debtor and determine its financial position.
Thereafter, it is required to constitute a committee of creditors under
Under Section 22, the committee of creditors appoint the resolution
professional by continuing with this interim resolution professional or by
appointing another professional as the resolution professional.
Under section 25, the resolution professional has the duty to take
custody of all records of the corporate debtor, to protect its assets,
continue its existing business and most importantly prepare an
information memorandum according to section 29 which obligation
involves scrutinising and reviewing the financial position of the company
as prepared by the resolution professional. Similar is the duty of the
resolution professional under section 30 with regard to resolution plan
submitted by a resolution applicant.
Then under section 31, the resolution plan goes for approval to the
adjudicating authority. The adjudicating authority has a concurrent duty
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of satisfying itself that inter alia the plan provides for payment of the
debts of operational creditors. Thereafter, the adjudicating authority
which is the NCLT approves the resolution plan.
Section 60 provides that during pendency of the resolution plan
before the adjudicating authority or NCLT, any application is to be made
before it. Such an application under section 60 (5) (c) includes one for
determination to any question with regard to insolvency resolution.
Under Section 61 an appeal from a decision of the NCLT lies
before the appellate authority (NCLAT). Such appeal under section 61(2)
has to be filed within 30 (thirty) days of the decision of the NCLT, the
Appellate Tribunal may extend such time by a maximum period of 15
days. A further appeal lies under section 62 of the Supreme Court within
45 days which may be further extended by 15 days and no more.
Now a look at the decisions in this field.
Two landmark decisions are Committee of Creditors of Essar Steel
India Limited through authorised signatory v. Satish Kumar Gupta &
Ors reported in (2020) 8 SCC 531 and Ghanashyam Mishra & Sons
Private Limited through the authorized signatory v. Edelweiss Asset
Reconstruction Company Limited through the Director & ors decided
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by the Supreme Court on 13th April, 2021 and reported in (2021) 9 SCC
657.
All debts of the corporate debtor undergoing a corporate resolution
process are required to be incorporated in a resolution plan which is to be
prepared by the resolution professional, vetted by the committee and
approved by the adjudicating authority, NCLT. On approval by the
adjudicating authority, all debts not submitted to the resolution
professional or before the effective date of the plan but not included in
the resolution plan stand “extinguished”. The debts before the effective
date mentioned in the resolution plan would be operative against the
corporate debtor in such manner as indicated in the resolution plan.
Subsequent to approval of the resolution plan, fresh debts of the corporate
debtor prior to the effective date could not be submitted or introduced or
taken cognizance of.
In Essar Steel India Limited Committee of Creditors vs. Satish
Kumar Gupta reported in (2020)8 SCC 531 the Supreme Court observed
as follows:
“107. For the same reason, the impugned NCLAT judgment in
holding that claims that may exist apart from those decided on
merits by the resolution professional and by the Adjudicating
Authority/Appellate Tribunal can now be decided by anPage 13 of 22
2025:MLHC:365-DBappropriate forum in terms of Section 60(6) of the Code, also
militates against the rationale of Section 31 of the Code. A
successful resolution applicant cannot suddenly be faced with
“undecided” claims after the resolution plan submitted by him has
been accepted as this would amount to a hydra head popping up
which would throw into uncertainty amounts payable by a
prospective resolution applicant who would successfully take over
the business of the corporate debtor. All claims must be submitted
to and decided by the resolution professional so that a prospective
resolution applicant knows exactly what has to be paid in order
that it may then take over and run the business of the corporate
debtor. This the successful resolution applicant does on a fresh
slate, as has been pointed out by us hereinabove. For these
reasons, NCLAT judgment must also be set aside on this count.”
This judgment has very elaborately identified the powers of the
Committee of Creditors and of the Adjudicating Authority, NCLT. It
observed in paragraphs 65-73 that the Committee of Creditors was a
professional body and was entrusted with the tasks of approving and
preparing a resolution plan for the corporate debtor. It was to be treated as
an expert and its proposals ordinarily not to be interfered with by NCLT.
Once the resolution plan has been approved by the Committee of
Creditors and not interfered with by the Adjudicating Authority,
subsequently, claims could not be entertained as that would work against
the purpose of the Act.
In Ghanashyam Mishra & Sons (P) Ltd. vs. Edelweiss Assets
reconstruction Co. Ltd. (2021)9 SCC 657, the Supreme Court in
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paragraph 98 held that the term “operational Creditor” included Central
and State Governments and any other local authority, following its earlier
decision in the case of Committee of Creditors of Essar Steel India
Limited and went on to conclude:
“102.1. That once a resolution plan is duly approved by the
adjudicating authority under sub-section (1) of Section 31, the
claims as provided in the resolution plan shall stand frozen and
will be binding on the corporate debtor and its employees,
members, creditors, including the Central Government, any State
Government or any local authority, guarantors and other
stakeholders. On the date of approval of resolution plan by the
adjudicating authority, all such claims, which are not a part of
resolution plan, shall stand extinguished and no person will be
entitled to initiate or continue any proceedings in respect to a
claim, which is not part of the resolution plan.”
These principles were again reiterated in RPS Infrastructure Ltd.
v. Mukul Kumar reported in (2023) 10 SCC 718 and Vaibhav Goel &
anr v. Deputy Commissioner of Income-Tax & anr decided on 20th
March, 2025.
In RPS Infrastructure Limited v. Mukul Kumar & anr reported in
(2023) 10 SCC 718, the Supreme Court reiterated its observations in
Essar Steel on entertaining claims after the resolution plan had been
accepted by the Committee of Creditors. It took a very strict view of the
sanctity of the Corporate Insolvency Resolution Plan. Its finality after
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undergoing the due process under the Code could not be easily interfered
with by the adjudicating authority. The view of the Supreme Court was so
strong that even before approval of the plan by the adjudicating authority,
it would not allow what it conceived to be an unreasonably delayed claim
of 287 days by a corporate creditor.
In the recent case of Vaibhav Goel & anr v. Deputy Commissioner
of Income Tax & anr (Civil Appeal No.49 of 2022) decided by the
Supreme Court on 20th March, 2025, the Supreme Court ruled the
following:
“all the dues including the statutory dues owed to the Central
government, any State Government or any local authority, if not a
part of the resolution plan, shall stand extinguished and no
proceedings could be continued in respect of such dues for the
period prior to the date on which the adjudicating authority grants
its approval under Section 31 of the IB Code.”
While all these cases stand on one side, on the other side is the case
of State Tax Officer v. Rainbow Papers Limited (2022) SCC online SC
1162. It is equally a landmark decision.
Amongst other things it enjoins the resolution professional, the
adjudicating authority with an independent duty irrespective of whether a
– corporate creditor has lodged its claim for debts or not of examining
whether the resolution plan contains all the debts of the corporate debtor
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before the effective date. If it is found that some debts are not included or
that there is no justification for excluding some debts or that this duty of
examination of the entire financial position of the corporate debtor has
not been discharged properly, then the resolution plan is to be treated as
invalid, void and non est.
Now, if such is the pronouncement and dictum of the Supreme
Court, then on the facts similar to those in that case, such a resolution
plan even if approved by the adjudicating authority would not extinguish
the debts of the corporate debtor prior to the effective date in the
resolution plan.
On a proper interpretation of this judgment till such time as a
resolution plan is declared as invalid it would be presumed to be valid
and all debts not included in the plan prior to the effective date would be
deemed to be extinguished.
Preliminary points
The point raised by the appellant that the first respondent has no
locus standi to maintain the writ, has to be dealt with first.
The impugned demand notice was raised on the said group
company, the third respondent on the footing that it had close connection
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with the first respondent which had the subject dues toward the appellant.
This company individually had no debt towards the appellant. This group
company had to clear those dues to save those towers from disconnection
of electricity. The appellant cannot change its stand and now say that the
said group companies are independent corporate entities. If that be so
then the third respondent is deemed to have no connection with the first
respondent and for the dues of the first respondent, the electricity
connection of the third respondent cannot be cut off.
Now, the second point. The respondent-group companies have not
initiated any proceedings against the demand notice. What is the locus of
the first respondent to maintain the writ, it was argued by Mr. Kumar,
learned Advocate General.
Now, any person is entitled to seek a declaration whether it has any
liability towards any other person.
The first respondent is entitled to establish that it has no due before
the effective date of the resolution plan towards the appellant and that on
such premises the appellant cannot maintain its demand against its
respondent-group companies. In my view, the appellant is entitled to seek
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such a declaration that it is not so liable, for the benefit of its group
companies.
Final Conclusions:
In a perfect set of circumstances when there is unimpeachable
collation consideration and adjudication of the debts of the corporate
debtor its debts before the effective date of the approved resolution plan
would be extinguished and the ratio in Committee of Creditors of Essar
Steel India Limited through authorised signatory v. Satish Kumar
Gupta & ors reported in (2020) 8 SCC 531 and Ghanashyam Mishra &
Sons Private Limited through the authorized signatory v. Edelweiss
Asset Reconstruction Company Limited through the Director & ors
with connected matters decided by the Supreme Court on 13 th April, 2021
as reported in (2021) 9 SCC 657 and the subsequent decisions would be
squarely applicable. But once the facts and circumstances change as in
State Tax Officer v. Rainbow Papers Limited reported in 2022 SCC
OnLine SC 1162, the ratio may not apply or be applicable in a modified
form.
As Denning, LJ observed in Paisner & ors v. Goodrich: 1955 2 All
E.R. 330 “When the judges of this court give a decision on the
Page 19 of 22
2025:MLHC:365-DBinterpretation of an Act of Parliament, the decision itself is binding on
them and their successors: see Cull v. Inland Revenue Comrs. (4),
Morelle, Ltd. v. Wakeling (5). But the words which the judges use in
giving the decision are not binding. This is often a very fine distinction,
because the decision can only be expressed in words. Nevertheless, it is a
real distinction which will best be appreciated by remembering that, when
interpreting a statute, the sole function of the court is to apply the words
of the statute to a given situation. Once a decision has been reached on
that situation, the doctrine of precedent requires us to apply the statute in
the same way in any similar situation; but not in a different situation.
Whenever a new situation emerges, not covered by previous decisions,
the courts must be governed by the statute and not by the words of the
judges.”
The effect of the decision in Rainbow Papers Limited as I see it is
that if the resolution plan does not include all the debts, it is invalid.
Furthermore, according to the decision in Rainbow Papers Limited, the
resolution professional, the committee of creditors and the adjudicating
authority have concurrent duties and responsibilities to check up the plan
and satisfy itself that inter alia all the debts of the corporate debtors have
Page 20 of 22
2025:MLHC:365-DBbeen included irrespective of the fact whether a creditor has lodged a
claim. It is true that the decision in Rainbow Papers Limited said that if
the resolution plan does not comply with the procedural rules of the
Code, it would be invalid or void ab initio. If it is so, it is non est.
In my opinion, unless any contrary order is brought from a
competent jurisdiction declaring invalidity of the resolution plan, the plan
as approved by NCLT is valid and binding on all stakeholders.
In the facts and circumstances of this case the said alleged debts of
the first respondent to the appellant are not included in the resolution plan
as approved by the adjudicating authority, NCLT on 3 rd December, 2020.
Therefore, those debts before the effective date of the plan i.e., 22nd
December, 2022 are deemed to have been extinguished.
Therefore, I pass an order of injunction restraining the appellant
from taking steps or from enforcing its demand notice dated 12th June,
2023.
Lastly, the question arises as to whether this Court can make a
declaration with regard to extinguishment of the said debt.
Sections 60, 61 and 62 of the Code provide a judicial remedy
however unlikely or remote to the appellant or anyone similarly situated to
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seek a declaration that the plan as approved is invalid in terms of the
Rainbow Papers Limited principle. On the other hand, those provisions
provide the forum stipulated by the Code to the first respondent to seek the
declaration it prays for in the writ. In such a situation, this Court would
refrain from exercising its writ jurisdiction to make the declaration the first
respondent wants.
This appeal is partly allowed by substantially affirming the
judgment and order under appeal with the above modifications and
observations. The impugned notice dated 12th June, 2023 is set aside
without going into any subsisting right of the appellant if any to challenge
the resolution plan.
MC (WA) No.19 of 2024 is disposed of.
(W. Diengdoh) (I.P. Mukerji)
Judge Chief Justice
Meghalaya
07.05.2025
"Lam DR-PS"
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Signature Not Verified
Digitally signed by
LAMPHRANG KHARCHANDY
Date: 2025.05.07 04:37:40 IST