Allahabad High Court allows UP Electricity Department to recover ₹ 9 crore electricity dues from directors of insolvent defaulter company

The Court held that the approval of a resolution plan does not ipso facto absolve the surety/guarantor of his or her liability, which arises out of an independent contract of guarantee.
Allahabad High Court
Allahabad High Court

The Allahabad High Court recently upheld a demand notice issued by Uttar Pradesh Electricity Department to recover ₹ 9 crore electricity dues from defaulter company which was declared insolvent under the provisions of the Insolvency and Bankruptcy Code, 2016, and the resolution plan approved by the National Company Law Tribunal (NCLT) [Narendra Singh Panwar v Pashchimanchal Vidyut Vitran Nigam Limited].

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