NCLAT Delhi Allows Restoration Where Counsel Deliberately Absented Himself and Withheld NOC: Eastern Power Distribution Company of Andhra Pradesh Limited vs Daulat Resolution Services Pvt. Ltd.

Overview of the Dispute

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, recently delivered a significant ruling in Eastern Power Distribution Company of Andhra Pradesh Limited Vs Daulat Resolution Services Pvt. Ltd., setting aside an order of the NCLT, Kolkata Bench dated 13.11.2025 that had rejected the appellant's restoration application. At the heart of this matter was a claim of ₹20,72,84,722 representing unpaid electricity charges arising from supply made to a corporate debtor during its Corporate Insolvency Resolution Process (CIRP).

The ruling addresses two interlocking issues that frequently create hardship for litigants operating across distant jurisdictions: first, whether deliberate non-appearance by an advocate — as opposed to inadvertent neglect — warrants a different legal treatment for purposes of restoration; and second, whether an advocate's refusal to issue a No Objection Certificate (NOC) constitutes a sufficient explanation for the delay in filing a restoration application beyond the period prescribed under Rule 48(2) of the NCLT Rules, 2016.

Background: The Corporate Debtor, CIRP, and the Electricity Supply

The appellant, Eastern Power Distribution Company of Andhra Pradesh Limited, functions as a statutory distribution licensee within the meaning of Section 2(17) of the Electricity Act, 2003, and is constitutionally mandated to supply electricity within its licensed area — electricity being governed under Entry 38 of List III of the Seventh Schedule to the Constitution of India.

The corporate debtor, M/s Impex Metal & Ferro Alloys Limited, was a registered consumer of the appellant under a high-tension supply connection. On 01.03.2018, the Adjudicating Authority admitted insolvency proceedings against the corporate debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I&B Code), triggering a moratorium under Section 14. Critically, since electricity constitutes an essential service protected under Section 14(2) of the I&B Code, its supply to the corporate debtor could not be terminated during the moratorium period.

Section 14 of the I&B Code, as extracted in the judgment, reads in relevant part:

"Section 14 Subject to the provision of sub-sections (2), (2A) and (3), on the insolvency commencement date, the Adjudicating Authority shall, by order, declare a moratorium for prohibiting all of the following, namely:

(2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.

(2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified."

Restoration of Power Supply and Outstanding Dues

The Interim Resolution Professional (IRP), appointed vide letter dated 21.03.2018, communicated to the appellant that essential services would remain uninterrupted. Pursuant to the IRP's written representation dated 31.03.2018 assuring prompt payment of consumption charges against supply connection HT SC No. VZM 283, the appellant restored electricity supply on 04.04.2018.

For the period 01.03.2018 to 24.04.2019, total consumption charges raised amounted to ₹58,68,44,160. Of this, the IRP remitted ₹37,95,59,438, leaving an outstanding balance of ₹20,72,84,722. This unpaid amount became the subject of the subsequent legal proceedings.

NCLT Proceedings: From the 2021 Order to Dismissal for Non-Prosecution

The NCLT, Kolkata Bench, by its order dated 05.10.2021 in IA (IBC) 748/KB/2021, acknowledged the appellant's entitlement to claim CIRP costs for electricity supplied during the moratorium and directed as follows:

"e. Respondent No.1 is also directed to approach Respondent No.2, Liquidator, for payment of its dues and Respondent No.2 is directed to consider the dues of Respondent No.1 in accordance with the Code and make payment as per Section 53 of the Code."

Following this direction, the appellant addressed a letter to the Liquidator on 13.11.2021 setting out the outstanding dues. When no payment was forthcoming despite email communications, the appellant filed I.A. No. 1061 of 2021 on 01.12.2021 seeking the following relief: