Resolution plan under Insolvency Code binds all creditors, including statutory, extinguishing claims. Court upholds 2019 amendment.

The court held that the demands created under the assessment orders and notices cannot be recovered from the petitioners post approval of the resolution plan under the Insolvency and Bankruptcy Code. The resolution plan binds all creditors, including statutory creditors, extinguishing claims not part of the plan. The court left open the issue of unjust enrichment for future adjudication. The retrospective application of the 2019 amendment to Section 31 of the IBC, making the resolution plan binding on government entities, was upheld. The demands under the assessment orders and notices were not recoverable, following the Supreme Court precedent.

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Issues Involved:
1. Validity of the assessment orders and demand notices against the petitioner post the approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016 (IBC).
2. Applicability of the principle of unjust enrichment in the context of the resolution plan.
3. Binding nature of the resolution plan on statutory creditors, including state tax authorities.
4. Retrospective application of the 2019 amendment to Section 31 of the IBC.

Issue-wise Detailed Analysis:

1. Validity of the Assessment Orders and Demand Notices:
The court noted that the resolution plan for M/s Bhushan Steel Ltd. (now Tata Steel BSL Ltd.) was duly approved by the National Company Law Tribunal (NCLT) on 15.05.2018. The demand created under the impugned assessment orders, which is part of the resolution plan sanctioned by NCLT, cannot be recovered from the petitioners. This conclusion is based on the Supreme Court's judgment in Ghanshyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited (2021 SCC OnLine SC 313), which held that once a resolution plan is approved, it binds all creditors, including statutory creditors, and extinguishes all claims that are not part of the plan.

2. Applicability of the Principle of Unjust Enrichment:
The court acknowledged the argument regarding unjust enrichment but clarified that this issue was neither raised nor adjudicated by the Assessing Authority in the impugned assessment orders or notices. Additionally, the court stated that such a disputed question of facts cannot be adjudicated in writ petitions filed under Article 226 of the Constitution of India. Therefore, the question of unjust enrichment was left open for future adjudication if necessary.

3. Binding Nature of the Resolution Plan on Statutory Creditors:
The court emphasized that the resolution plan, once approved by the NCLT, is binding on all creditors, including statutory creditors like state tax authorities. This is in line with the Supreme Court's interpretation in Ghanshyam Mishra, which underscores that the approved resolution plan is binding on the corporate debtor and all its stakeholders, including statutory authorities. The court reiterated that the legislative intent of the IBC is to ensure that the corporate debtor starts with a "fresh slate" post the approval of the resolution plan, with no surprise claims being flung at the successful resolution applicant.

4. Retrospective Application of the 2019 Amendment to Section 31 of the IBC:
The court held that the 2019 amendment to Section 31 of the IBC, which clarifies that the resolution plan is binding on the Central Government, any State Government, or any local authority to whom a debt is owed, is declaratory and clarificatory in nature and therefore retrospective in operation. This interpretation aligns with the Supreme Court's view that such amendments, intended to cure obvious omissions and clarify existing provisions, should be considered retrospective to fulfill the legislative intent effectively.

Conclusion:
The court concluded that the demands created under the impugned assessment orders and the demands pursuant to the impugned notices shall not be recovered from the petitioners as the dues stand extinguished per the law laid down by the Supreme Court in Ghanshyam Mishra. However, the question of unjust enrichment remains open for future adjudication. The writ petitions were partly allowed to this extent.

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