Approved resolution plan bars separate provident fund claims raised in insolvency resolution proceedings

Once a resolution plan is approved under the Insolvency and Bankruptcy Code, claims relating to the covered period that were raised, or could have been raised, in the insolvency resolution process cannot be pursued separately. The provident fund authority had already lodged the relevant claim before the resolution professional, and the later Section 7A determination related to the same period. The Court treated the approved plan as binding on the corporate debtor and all stakeholders, including statutory authorities, and held that the subsequent demand was impermissible and unsustainable.

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Issues: Whether the provident fund authority could sustain a Section 7A determination for a period covered by the corporate insolvency resolution process after approval of the resolution plan, and whether such claim survived when it had already been lodged before the resolution professional and partly dealt with in the insolvency proceedings.

Analysis: The claim for the relevant period had already been raised before the resolution professional, and the resolution process culminated in approval of the resolution plan. Once the plan is approved, it binds the corporate debtor and all stakeholders, including statutory authorities. Claims that are part of, or ought to have been included in, the insolvency resolution process cannot be pursued independently after approval of the plan. The Court also treated the later Section 7A order as covering a period already within the insolvency claims process, making the subsequent demand impermissible.

Conclusion: The subsequent provident fund demand could not be enforced after approval of the resolution plan and was unsustainable.

Final Conclusion: The writ petition succeeded and the impugned demand order was set aside because the insolvency resolution framework had extinguished the later claim.

Ratio Decidendi: Once a resolution plan is approved under the Insolvency and Bankruptcy Code, claims relating to the relevant period that were raised or were capable of being raised in the resolution process stand bound by the plan and cannot be pursued separately thereafter.

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