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of <h1>Tribunal Orders Removal of Revenue Recovery Certificate to Ensure Insolvency Resolution Plan Success</h1> <h3>Shri Dutt India (P.) Ltd. Versus Office of the Sugar Commissioner</h3> Shri Dutt India (P.) Ltd. Versus Office of the Sugar Commissioner - TMI Issues Involved:1. Validity of the Revenue Recovery Certificate (RRC) issued by the Sugar Commissioner.2. Compliance with the approved Resolution Plan under the Insolvency and Bankruptcy Code, 2016.3. Jurisdiction of the National Company Law Tribunal (NCLT) to entertain the application.4. Impact of the RRC on the implementation of the Resolution Plan and the rights of the Successful Resolution Applicant.Detailed Analysis:1. Validity of the Revenue Recovery Certificate (RRC) issued by the Sugar Commissioner:The Applicant, Shri Dutt India Pvt. Ltd., contested the RRC issued by the Sugar Commissioner, Maharashtra State, which created a charge on the immovable properties of New Phaltan Sugar Works Limited. The RRC was issued due to the Corporate Debtor's failure to pay the Fair and Remunerative Price (FRP) to farmers for the sugarcane supplied during the crushing season of 2017-18. Despite the Tribunal's order dated 11-11-2019 approving the Resolution Plan, the RRC remained in effect, causing hindrance to the implementation of the Resolution Plan. The Tribunal noted that the RRC should have been withdrawn following the approval of the Resolution Plan, as the dues were to be settled under the Plan.2. Compliance with the approved Resolution Plan under the Insolvency and Bankruptcy Code, 2016:The Resolution Plan, approved by the Committee of Creditors (CoC) and the Tribunal, required the Applicant to pay dues amounting to Rs. 25,59,49,888/- to the farmers within a specified period. The Applicant complied by paying a significant portion and securing the remaining amount with a Bank Guarantee. The Tribunal emphasized that once a Resolution Plan is approved under Section 31 of the Code, all assets and benefits of the Corporate Debtor are transferred to the Successful Resolution Applicant free from all encumbrances. The Tribunal found that the Respondent's failure to withdraw the RRC was causing undue harm to the Applicant and obstructing the implementation of the approved Resolution Plan.3. Jurisdiction of the National Company Law Tribunal (NCLT) to entertain the application:The Respondent argued that the NCLT lacked jurisdiction to entertain the application due to the availability of an alternative remedy and pending appeals. However, the Tribunal asserted its jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, which empowers it to adjudicate matters related to the Corporate Insolvency Resolution Process (CIRP). The Tribunal referenced Section 238 of the Code, which provides it with overriding authority over other laws, ensuring that the CIRP process is not hindered by conflicting statutes.4. Impact of the RRC on the implementation of the Resolution Plan and the rights of the Successful Resolution Applicant:The Tribunal observed that the continued existence of the RRC and the charge on the immovable properties was causing significant prejudice to the Applicant, hindering the operation of the sugar plant, payment of wages, and procurement of sugarcane. The Tribunal highlighted that the purpose of the CIRP is to ensure the revival of the Corporate Debtor and facilitate the realization of dues by creditors. The Tribunal concluded that the Respondent's actions were contrary to the provisions of the Insolvency and Bankruptcy Code, 2016, and directed the Sugar Commissioner to remove the entry of the Government of Maharashtra on the 7/12 extracts of New Phaltan Sugar Works Limited.Conclusion:The Tribunal allowed the Interlocutory Application No. 1055 of 2020, directing the Sugar Commissioner, Maharashtra State, and the relevant authorities to remove the entry of the Government of Maharashtra on the 7/12 extracts of New Phaltan Sugar Works Limited within one week. The Tribunal reaffirmed that the Resolution Plan, once approved, binds all parties, including government authorities, and all encumbrances on the Corporate Debtor's assets are to be released in favor of the Successful Resolution Applicant. The application was disposed of accordingly.
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