In Brief
PVVNL, a state-owned electricity distribution company, sought to recover arrears of ₹4.32 crores for electricity supplied to a corporate debtor now in liquidation. PVVNL claimed priority recovery under Electricity Act provisions and opposed the liquidator's sale of attached assets. The Supreme Court held that electricity dues, though secured by contractual charge, do not rank as "government dues" under the IBC's waterfall mechanism, as PVVNL is a distinct statutory entity with replicable functions, not a government treasury. The Court upheld the primacy of IBC Section 238 over Electricity Act Sections 173-174. A secured creditor must choose at liquidation's outset: relinquish security for high priority, or enforce independently and rank lower for unpaid dues. The appeal was dismissed; the liquidator must decide PVVNL's claim under IBC priority rules.
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