2023 (1) TMI 1296 - AT - Insolvency and Bankruptcy

Tribunal Upholds Resolution Plan Approval, Dismisses Commercial Tax Dept Appeal

Commercial Tax Department Versus Sajjan Kumar Dokania & Ors

The Tribunal upheld the approval of the Resolution Plan, dismissing the appeal by the Commercial Tax Department. Despite claiming Secured Creditor status ... Approval of Resolution Plan - It is submitted that for the mere fact that Appellant did not file its claim, Appellant shall not be disentitled from distribution as Secured Creditor - HELD THAT:- From the facts brought on the record, there is no dispute that at the time when claim was filed by the Appellant on 01.06.2022, the CoC has already approved the Resolution Plan. The judgment of Hon’ble Supreme Court in State Tax Officer (1) vs. Rainbow Papers Ltd. [2022 (9) TMI 317 - SUPREME COURT] was considering a claim which were invited on 05.10.2017 which was much prior to amendment in the Regulation, as has been noted in the judgment. In the facts of the present case, the plan approved has also been implemented and the amount received has been disbursed to the Financial Creditors and other claimants as per the Resolution Plan. The submission of learned counsel for the Appellant that the Appellant being a Secured Creditor as per the law laid down by the Hon’ble Supreme Court in State Tax Officer (1) vs. Rainbow Papers Ltd. he ought to have been allocated amount as per Section 53 at par with the Secured Financial Creditors cannot be accepted in the facts of the present case. When there is no claim filed by the Appellant within time, no error has been committed by the Adjudicating Authority in approving the Resolution Plan, which was approved by the CoC much prior to filing of the claim by the Appellant. Thus, no relief can be granted to the Appellant in the facts of the present case - appeal dismissed. Issues:Challenge to approval of Resolution Plan based on Secured Creditor status and claim filing timeline.Analysis:1. The appeal was filed against the approval of a Resolution Plan by the Adjudicating Authority. The Appellant, the Commercial Tax Department, challenged the order, claiming to be a Secured Creditor entitled to be treated as such under Section 53, despite not filing a claim before the CoC approved the plan. 2. The Appellant contended that as per the judgment in 'Civil Appeal No. 1661 of 2020, State Tax Officer (1) vs. Rainbow Papers Ltd.', they should have been considered as a Secured Creditor and allocated amount at par with Secured Financial Creditors, even though their claim was filed after the CoC approval but before the Adjudicating Authority's approval. 3. The Respondent argued that since the Appellant did not file a claim within the specified time and did not file as a Secured Creditor, there was no error in the distribution as per the finalized list of creditors. They also pointed out that the judgment cited by the Appellant was not applicable in this case due to the timing of claim submission and plan implementation. 4. The Tribunal considered the submissions and the record. It noted that the CoC had approved the Resolution Plan before the Appellant filed their claim. The judgment cited by the Appellant was distinguished as it dealt with claims filed before a specific regulatory amendment, unlike the current case where the plan had been implemented and funds disbursed to creditors. 5. In light of the facts, the Tribunal found that since the Resolution Plan had been implemented, and no claim was filed by the Appellant within the required timeline, there was no error in the approval of the plan by the Adjudicating Authority. The Tribunal concluded that the Appellant could not be treated as a Secured Creditor as per the cited judgment and dismissed the appeal, declining to interfere with the impugned order.