Can A PSU Be A "Corporate Person" Under Bankruptcy Code? NCLT Chennai Reserves Order

The National Company Law Tribunal, Chennai, on Saturday, reserved an order that would clarify whether a PSU would fall within the ambit of a "corporate person" under the Insolvency and Bankruptcy Code.

The matter before the Tribunal pertains to Petitions filed by power producers Ind. Bharath Power Gencom Ltd, Ind. Bharath Thermal Limited and Aarkay Energy (Rameshwaram) Limited against Tamil Nadu Generation and Distribution Company Ltd. (Tangedco), the State government-owned power distribution company.

The Petitions seek initiation of corporate insolvency resolution process to recover the receivables to the tune of over Rs. 600 crore in all the three entities put together, from the discom.

Another issue that this matter deals with is impact of appointment of an Insolvency Resolution Professional in a matter of this nature. The NCLT is also seized of the issue as to whether any dispute relating to an electricity matter would have to go before the Tamil Nadu Electricity Regulatory Commission pursuant to the provisions of the Electricity Act, 2003

The matter came up before the NCLT member Mr. Anantha Padbanabhaswamy. Arguments were advanced by Senior Advocate Anirudh Krishnan on behalf of Ind. Bharath Power Gencom Ltd and  the Additional Advocate General Senior Advocate Manishankar on behalf of TANGEDCO.