JSA successfully represented UltraTech Cement Limited (“UTCL”) in Writ Petition No. 15889 of 2020 before the Madhya Pradesh High Court, Jabalpur (“MPHC”), whereby Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (“MPPKVVCL” / MP DISCOM) was directed to process a long-pending name change application, in the electricity connection of the Bela Cement Plant, without insisting on payment of disputed legacy Electricity Duty dues owed by the previous owner, Jaiprakash Associates Ltd. (“JAL”).
This Order brings significant relief to UTCL, by upholding the provisions of a court sanctioned Scheme of Arrangement over MP DISCOM’s claim of past dues being transferred to the new owner. As a result of denial of change in name, UTCL was unable to procure multiple operational permissions essential for running its captive power plant efficiently.
The said Order brings UTCL a relief of several hundred crores on account of JAL’s past Electricity Duty dues claimed from UTCL.
The dispute stemmed from the transfer of the Bela Cement Plant to UTCL under a Scheme of Arrangement approved by the Hon’ble NCLT (Mumbai and Allahabad Benches) in 2017. As per the Scheme, all contingent liabilities and litigations pending as on the Closing Date (29.06.2017) were expressly retained by JAL. Notwithstanding this, MPPKVVCL refused to update the name on the electrical connection or grant essential statutory permissions (including for synchronization of a 13 MW WHRS-based captive power plant, captive open access, termination of its electrical connection), on the grounds that UTCL was required to clear JAL’s Electricity Duty dues (prior to the Closing Date).
The writ petition (in the first round) was initially dismissed on the ground that an alternate remedy before the State Electricity Regulatory Commission was available to UTCL. The said order of the Ld. Single Judge was challenged by UTCL before the Division Bench of the MP High Court in Writ Appeal No. 26 of 2021. The said Writ Appeal was made absolute and set aside Ld. Single Judge’s Order. The Division Bench further remanded the matter to Ld. Single Judge for adjudication of the dispute on merits. The present win for UTCL is in the remand proceedings.
The decision in the Remand Order dated 26.05.2025, affirms the statutory force of schemes under the Companies Act and provides important clarity by safeguarding transferee entities from liabilities expressly excluded under such Schemes, reinforcing regulatory certainty in M&A transactions. It also reinforces the fact that the Scheme of Arrangement once approved is binding in Rem.
A central legal issue addressed in the matter was the treatment of legacy dues under different modes of asset transfer—particularly distinguishing the implications of a court-sanctioned Scheme of Arrangement from ordinary sale or auction-based transfers, where dues may attach to the premises. MPPKVVCL had argued that the Electricity Duty dues would “travel with the property” under the Electricity Act and thus had to be discharged by UTCL. The MP High Court categorically rejected this contention, recognising the supremacy of the Scheme and holding that such liabilities cannot override court-approved arrangements.
The legal representation for UltraTech Cement Limited was led by Senior Advocate Ravindra Shrivastava, who argued the matter before the Madhya Pradesh High Court. He was ably assisted by Abhishek Munot, Lead Partner at JSA, and Malcolm Desai, Of Counsel.
Abhishek is a part of Disputes group of JSA and anchors the Regulatory Practice of JSA in Western India. Abhishek handles sector specific commercial litigation, arbitration constitutional & administrative law litigation and regulatory proceedings before statutory authorities, tribunals and courts.