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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>Effect of Approved Resolution Plan under IBC on Extinguishment of Claims and Abatement of Proceedings; Appeal Closed</h1> An approved resolution plan under the IBC extinguishes claims not incorporated in the plan, and prevents initiation or continuation of proceedings or ... Effect of approved resolution plan u/s 31 - Extinguishment of claims not included in an approved resolution plan - Abatement of statutory proceedings and appeals on approval of resolution plan - Binding nature of resolution plan on creditors and statutory authorities - Reliance on Ghanashyam Mishra and Sons Pvt. Ltd. [2021 (4) TMI 613 - SUPREME COURT] - HELD THAT:- It is clear from the above that once the Resolution Plan is approved by the Adjudicating Authority under Section 31 (1) of Insolvency and Bankruptcy Code, 2016 (IBC) then ‘no person will be entitled to initiate or continue any proceedings in respect to a claim which is not part of the resolution plan’. That means even the present proceedings before us cannot be continued as held in Ghanashyam Mishra and Sons Pvt. Ltd. [2021 (4) TMI 613 - SUPREME COURT]. Resultantly, the appeal stands closed/disposed of accordingly. Issues: Whether, upon approval of a resolution plan by the Adjudicating Authority under Section 31(1) of the Insolvency and Bankruptcy Code, 2016, the present appeals/proceedings raising demands can be continued or must be abated.Analysis: The decision applies Section 31(1) of the Insolvency and Bankruptcy Code, 2016 and the ruling in Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. (Supreme Court) which holds that once a resolution plan is approved by the Adjudicating Authority, claims not included in the resolution plan stand frozen or extinguished and no proceedings in respect of such claims may be initiated or continued. The 2019 amendment to Section 31 is treated as clarificatory and declaratory, and the principle that statutory dues not part of an approved resolution plan cannot be pursued is applied to the present appeals.Conclusion: The appeals cannot be continued after the approval of the resolution plan and therefore stand abated/closed; the appeals are disposed of accordingly.
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