Approved resolution plan extinguishes pre-resolution customs claims; separate recovery is barred under insolvency law.

An approved resolution plan under the Insolvency and Bankruptcy Code, 2016 gives binding effect to the plan and operates on a clean slate basis, so pre-approval claims not included in the plan stand extinguished. Applying that principle, the Delhi High Court held that customs dues relating to the pre-resolution period could not be pursued separately once the corporate insolvency resolution process plan was approved. The customs authorities' failure to file a proof of claim despite notice of the CIRP and communication from the resolution professional further defeated the demand. The Court also noted that the customs provision expressly saved the Code and rejected the forum non conveniens objection, so the show-cause notice was quashed.

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Issues: Whether the show-cause notice for pre-resolution customs dues could survive after approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016, and whether the customs authorities' failure to file proof of claim defeated their demand.

Analysis: The resolution plan having been approved in the corporate insolvency resolution process, the claims not forming part of the plan stood extinguished. The Court applied the binding effect of an approved resolution plan and the clean slate principle to conclude that pre-approval statutory dues could not be pursued separately. The customs authorities, despite notice of the CIRP and a specific communication from the resolution professional, did not file proof of claim and did not respond. The Court distinguished the decision concerning statutory first charge under a different VAT enactment, noting that the customs provision expressly saved the Code. The plea based on forum non conveniens was also rejected.

Conclusion: The show-cause notice could not be sustained and was quashed.

Final Conclusion: Pre-resolution customs claims were held to be unenforceable outside the approved resolution plan, and the writ petition succeeded.

Ratio Decidendi: Once a resolution plan is duly approved under section 31 of the Insolvency and Bankruptcy Code, 2016, all claims not included in the plan stand extinguished and cannot be pursued independently, including statutory dues for the pre-approval period.

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