Kar Vivad Samadhan settlement extinguishes co-noticees' proceedings and penalties once the principal liability is finally resolved.

Settlement of the principal demand under the Kar Vivad Samadhan Scheme, 1998 brought the adjudication against the main declarant to an end, and the co-noticees' liability could not survive independently once the principal liability was fully and finally settled. The penalties imposed on the co-noticees therefore lost their standalone basis, and the stay order granted in the connected appeals also ceased to operate. On that footing, the co-noticees' appeals were held not to survive and the stay order was recalled.

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Issues: Whether the appeals and the stay order against the co-noticees survived after the main noticee obtained settlement under the Kar Vivad Samadhan Scheme, 1998.

Analysis: The settlement of the demand in favour of the main declarant under Section 90(1) of the Kar Vivad Samadhan Scheme, 1998 brought the adjudication proceedings to an end. Once the principal liability stood settled fully and finally, the proceedings against the co-noticees, including the penalties imposed on them, could not survive independently. In that situation, the stay order already passed in the appeals also ceased to have any effect.

Conclusion: The appeals by the co-noticees did not survive, the stay order was recalled, and the appeals were dismissed.

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