Resolution plan overrides pre-existing recovery charge; tribunal may direct removal of land record entries to implement insolvency resolution.

The Tribunal held that it had jurisdiction under the Insolvency and Bankruptcy Code and its inherent powers to hear an application connected with implementation of an approved resolution plan, despite an alternate remedy. It further held that once the resolution plan was approved, pre-existing revenue recovery entries and the corresponding charge over the corporate debtor's immovable property could not survive, because the assets stood transferred to the successful resolution applicant free from encumbrances and inconsistent recovery measures were overridden. The continuing land record entry was found to impede implementation of the plan, so the entry and charge had to be removed and the record updated in favour of the successful resolution applicant.

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Issues: (i) Whether the Tribunal had jurisdiction under the Insolvency and Bankruptcy Code, 2016 to entertain the application seeking removal of the revenue recovery certificate entry and charge in the land records. (ii) Whether, after approval of the resolution plan, the pre-existing revenue recovery certificate and corresponding charge over the corporate debtor's immovable property could continue to subsist.

Issue (i): Whether the Tribunal had jurisdiction under the Insolvency and Bankruptcy Code, 2016 to entertain the application seeking removal of the revenue recovery certificate entry and charge in the land records.

Analysis: The application was held to be directly connected with the corporate insolvency resolution process and the implementation of the approved resolution plan. The Tribunal applied Section 60(5) of the Insolvency and Bankruptcy Code, 2016 along with Rule 11 of the National Company Law Tribunal Rules, 2016 and held that it possessed jurisdiction to adjudicate the dispute. The plea of an alternate remedy did not oust this jurisdiction because the issue arose from the effect and implementation of the insolvency resolution process.

Conclusion: The Tribunal had jurisdiction to entertain and decide the application.

Issue (ii): Whether, after approval of the resolution plan, the pre-existing revenue recovery certificate and corresponding charge over the corporate debtor's immovable property could continue to subsist.

Analysis: The Tribunal held that once a resolution plan is approved under Section 31 of the Insolvency and Bankruptcy Code, 2016, the corporate debtor's assets stand transferred to the successful resolution applicant free from encumbrances and all persons, including State authorities, are bound by that order. It further held that the revenue recovery certificate was only an executing mechanism for recovery of farmers' dues and, in the facts of the case, the dues had already been dealt with under the approved plan and paid or secured. Relying on the overriding effect of Section 238 of the Insolvency and Bankruptcy Code, 2016, the Tribunal concluded that the continuing entry in the land records impeded implementation of the resolution plan and could not survive.

Conclusion: The revenue recovery certificate entry and the corresponding charge could not continue and had to be removed.

Final Conclusion: The application was allowed and the authorities were directed to delete the Government of Maharashtra entry from the 7/12 extracts and record the successful resolution applicant's name in its place.

Ratio Decidendi: A duly approved resolution plan under the Insolvency and Bankruptcy Code prevails over inconsistent pre-existing recovery proceedings and encumbrances, and the Tribunal may exercise its jurisdiction under Section 60(5) read with its inherent powers to ensure effective implementation of the plan.

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