IBC resolution plan extinguishes pre-approval municipal dues; local authority claims not included in the plan cannot be enforced later.

An approved resolution plan under the Insolvency and Bankruptcy Code, 2016 binds the corporate debtor and all creditors, including local authorities, and overrides inconsistent laws. Statutory municipal claims for the period before approval, if not included in the resolution plan, cannot later be pursued and stand extinguished. Accordingly, pre-approval notices, supplementary bills, and demands were quashed, while the municipality retained liberty to reassess liability only for the post-approval period in accordance with law and natural justice.

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Issues: Whether municipal property tax dues and valuation-based demands raised for the period prior to approval of the resolution plan could survive in view of the Insolvency and Bankruptcy Code, 2016, and whether the impugned notices and bills were liable to be quashed.

Analysis: The resolution plan approved under the Insolvency and Bankruptcy Code, 2016 binds the corporate debtor and all creditors, including local authorities, once approved by the Adjudicating Authority. Claims not included in the approved resolution plan cannot later be pursued for the period preceding approval, and the Code operates notwithstanding inconsistent provisions in other laws. The statutory dues raised by the municipal authority for the pre-approval period were not part of the approved resolution plan. The challenge to maintainability was rejected, and the Court held that the municipality could assess liabilities only for the post-approval period in accordance with law and natural justice.

Conclusion: The pre-approval municipal demands were extinguished and the impugned notices, supplementary bills, and demands were quashed. The municipality was left free to reassess the liability for the subsequent period in accordance with law.

Ratio Decidendi: Once a resolution plan is approved under the Insolvency and Bankruptcy Code, 2016, all claims and statutory dues relating to the pre-approval period that are not included in the plan stand extinguished and cannot be enforced by creditors, including local authorities.

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