IBC resolution plan extinguishes excluded dues, and industrial use can defeat an unrevised agricultural land description.

Approved resolution plans under the Insolvency and Bankruptcy Code bind the Central and State Governments, and claims not included in the plan stand extinguished; the State's pre-CIRP dues therefore could not be enforced through continuing prohibitory entries over the petitioner's properties. The Court also held that the land could not be treated as unavailable for registration on the footing that it was agricultural land, because the material showed long-standing industrial use for an iron and steel unit and the revenue description could not override actual user. The writ petition was allowed, the impugned prohibitory requests and consequential proceedings were declared invalid, and alienation documents were to be considered if otherwise lawful.

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Issues: (i) Whether, after approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016, the State's pre-CIRP statutory dues and the related prohibitory entries against the petitioner's properties survived; (ii) Whether the respondents could continue to treat the subject land as unavailable for registration on the footing that it was agricultural land and resist alienation of the properties.

Issue (i): Whether, after approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016, the State's pre-CIRP statutory dues and the related prohibitory entries against the petitioner's properties survived.

Analysis: The approved resolution plan was binding on the Central Government, State Government and local authorities in view of the amended Section 31(1) of the Insolvency and Bankruptcy Code, 2016. The dues claimed by the State were not part of the approved plan. The overriding effect of Section 238 of the Code, read with the principle that claims not included in the approved resolution plan stand extinguished, meant that the State's pre-CIRP dues could no longer be enforced through continued restraint on the properties.

Conclusion: The pre-CIRP dues and the consequential prohibitory entries could not survive and were inoperative against the petitioner.

Issue (ii): Whether the respondents could continue to treat the subject land as unavailable for registration on the footing that it was agricultural land and resist alienation of the properties.

Analysis: The material placed before the Court showed that the petitioner had been running an iron and steel manufacturing unit on the subject land and that factory-related records existed for the property. On that basis, the land had ceased to be agricultural long before the relevant conversion regime was introduced, and the revenue authorities could not ignore the actual user of the land or rely on an unrevised revenue description to justify the restraint.

Conclusion: The respondents could not refuse registration or insist on continued restraint on the basis that the land was agricultural.

Final Conclusion: The writ petition succeeded, the impugned prohibitory requests and consequential proceedings were declared invalid, and the respondents were directed to consider alienation documents without reference to the objection raised by the second respondent if otherwise lawful.

Ratio Decidendi: Once a resolution plan under the Insolvency and Bankruptcy Code, 2016 is approved, claims of governmental authorities not included in that plan stand extinguished and cannot be enforced through pre-existing restraints or prohibitory measures against the corporate debtor's assets.

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