Resolution plan approval extinguishes unfiled claims, preventing a municipal corporation from enforcing unasserted property tax dues later.

Upon approval of a resolution plan under the Insolvency and Bankruptcy Code, claims not included in the plan stand extinguished and are not enforceable against the corporate debtor, including statutory dues of local authorities. A municipal corporation that had been notified of the corporate insolvency process but did not lodge a claim with the resolution professional could not later seek to upset the approved plan on the basis of unasserted property tax dues. The existence of the liability in the debtor's books did not replace the requirement to submit a claim with proof, and the approved plan remained binding on all creditors.

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Issues: Whether the municipal corporation's property tax dues could be interfered with in the insolvency proceedings despite no claim having been submitted to the resolution professional, and whether the approved resolution plan could be set aside on that basis.

Analysis: The Corporate Insolvency Resolution Process had been initiated and the resolution professional had made a public announcement inviting claims, followed by individual intimation to the municipal corporation. The municipal corporation did not file any claim before the resolution professional. The challenge was founded on the assertion that the corporate debtor's books would have reflected the liability and that the resolution professional ought to have included the dues in the information memorandum. The cited precedent on government dues did not assist the appellant because, in that case, a claim had been filed though belatedly and the issue turned on the effect of the then-applicable regulatory position. Here, the relevant regulatory framework required submission of claim with proof, and once the resolution plan was approved, claims not forming part of the plan stood extinguished. The approved plan also bound all creditors, including local authorities.

Conclusion: The municipal corporation's objection failed, and the approved resolution plan was not liable to be disturbed.

Final Conclusion: A creditor who fails to lodge its claim in the corporate insolvency process cannot later seek to unsettle an approved resolution plan on the strength of unasserted statutory dues, which stand extinguished if not included in the plan.

Ratio Decidendi: Upon approval of a resolution plan under the Insolvency and Bankruptcy Code, 2016, all claims not forming part of the plan stand extinguished and are no longer enforceable against the corporate debtor, including statutory dues of local or governmental authorities.

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