New Delhi: State-owned Discom (Electrical Distribution Company) has no immunity from the company’s bankruptcy process and there is no conflict between the Code of Bankruptcy and Bankruptcy (IBC) 2016 and the 2003 Electricity Law on monetary claims resolution, in accordance with the strength of the Ministry.
The scenery of the Ministry, completed after consultation with the Ministry of Law, relieved the wrong sense of security for the bankruptcy process for a diskomy and provided fresh legal ammunition debtors to recover contributions.
This problem arose after the Tamil Nadu government wrote to the ministry on September 16, by saying the provisions of Bankruptcy of IBC did not apply to diskomes because they issued public functions as an extension of the state government.
He also said there was a conflict between the IBC and the Electricity Act.
Tamil Nadu’s letter was driven by a writing petition for the initiation of the process under the IBC submitted in Madras High Court by South India Corporation Pvt Ltd.
In his letter on November 8, the Ministry cited the Supreme Court’s decision in several cases, preaching the direction of being regulated under the company acting and not under the law such as NHAI.
So they are not an extension of the state government.
He also said this problem was “resolved” by the Supreme Court.
The ministry’s letter also said there was no dichotomy between the provisions of the IBC and the Electricity Act, which applies to various discount operational issues.