AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 801
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....ant has filed Miscellaneous Application No. E/MISC/85469/2022 in appeal No E/966/2012. 1.3 Since the grounds raised in the miscellaneous application are identical these appeals and application have been taken up for consideration simultaneously. 1.4 At the outset leaned counsel for the appellant submits that he does not contests the order in appeal on merits, but would like the matters to be decided on the issues raised in the miscellaneous application filed by the appellants. 2.1 The chronology leading to filing this miscellaneous application is as detailed in the table below: Period of Dispute in E/966/2012 2004-2009 Period of Dispute in E/85432/2019 2008-2015 Date of Commencement of Corporate Insolvency Resolution Process (CIRP) i.e. admission of Petition by NCLT under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). 18.07.2017 Date of Public Announcement of CIRP by the Resolution Professional appointed by NCLT. 19.07.2017 Date of the Resolution Plan. 12.04.2018 Date of Approval of the Resolution Plan by the Committee of Creditors. 20.06.2018 Date of the NCLT O....
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...., it also invited from the operational creditors (which includes the Central Government) to submit its claim against the Corporate Debtor under Regulation 7 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (IBBI Regulations for short). • In terms of the approved Resolution Plan, all payments to the operational creditors including the Central Government, in relation to the statutory dues, which includes the present Respondent, whose liability was in excess of Rs 3,00,000/- for the period prior to the closing date viz 14.09.2020 (i.e. the date on which all the implementation steps as set out in Annexure 2 to the Resolution Plan are completed) were settled at Nil. Therefore the claims which arise relating to the period prior to the closing date, the Resolution Pan clearly provided that no further payments are due to and all liabilities of the operational creditors stand fully and finally satisfied and settled. • Section 31(1) of the IBC provides for the binding nature of the Resolution Plan. In terms of Section 31(1) of the IBC, the approved resolution plan shall be binding on the corporat....
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....8 (SC). • Rule 22 of the CESTAT (Procedure) Rules, 1982 providing for the abatement of appeal in certain circumstances is not applicable in this present case. 3.3 Arguing for the revenue learned authorized representative submits that: • Subsequent to the order of the NCLT approving the resolution plan, the appeal stands abated and all the issues arising out of the order appealed against have acquired finality with the said order of NCLT approving the resolution plan. • The Hon'ble Bombay High Court has in case of Godrej and Boyce Manufacturing Company [2009 (233) ELT 446 (Bom)] clearly laid down the conditions in which the doctrine of merger is applicable. In the present case order of lower authorities now stands merged with the order of the NCLT, and appeal filed before the CESTAT abates in terms of Rule 22 of the CESTAT Procedure Rules. 4.1 We have considered the submissions made by both the sides. 4.2 Undisputedly the proceedings against the appellant in the present two appeals had been initiated against the appellant in these two appeals under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) on 18.07.2....
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.... of the order dated 26th July 2019 1.2 In this regard, this bench is of the view that, after the approval of the Resolution Plan, the control and management has been transferred to successful Resolution Applicant(s) i.e. (present applicant). Now it is prerogative of the applicant to approach any bank(s) as per their choice and convenience and it is also prerogative of any Bank(s)/ third party lender(s), whichever it may be, to disburse any loan as per their/his own term(s) and condition(s). Hence, Successful Applicant may approach any bank(s) / third party lender(s) of their own choice, further approval of plan does not bar any bank(s) /ender(s) to disburse any loon on their own terms and conditions, which is/are the sole prerogative of the borrower(s) and lender(s). Para 27 of order dated 8th March 2019 27. In this regard, this Adjudicating Authority is of the view that Clause No. 3.2.3(iii) at Page No. 19 of the Resolution Plan viz. all legal proceedings initiated before any forum by or on behalf of the financial creditors to enforce any rights or claims against the Company/Corporate Debtor or enforce or invoke any security, interest and/or guarantee, o....
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...., 1982 reads as follows: "RULE 22. Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application. - Where in any proceedings the appellant or applicant or a respondent dies or is adjudicated as an insolvent or in the case of a company, is being wound up, the appeal or application shall abate, unless an application is made for continuance of such proceedings by or against the successor-in-interest, the executor, administrator, receiver, liquidator or other legal representative of the appellant or applicant or respondent, as the case may be : Provided that every such application shall be made within a period of sixty days of the occurrence of the event : Provided further that the Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period so specified, allow it to be presented within such further period as it may deem fit." Learned advocate has labored to explain why this rule should not be made applicable in his case. However in view of the fact as stated in the para 4.2 and 4.3 above we are of the view that moment the successor interest with su....
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.... and shall not increase." Pursuant to the foregoing, the company shall have no liability towards any Operational Creditors with regards to any claims (as defined under the IBC) relating in any manner to the period prior to the closing date. All such Liabilities shall immediately, irrevocably and unconditionally stand fully and finally discharged and settled, with there being no further claims whatsoever, and all forms of security created or suffered to exist, or rights to create such a security, to secure any obligations towards the Operational Creditors (whether by way of guarantee, bank guarantee, letters of credit or otherwise) shall immediately, irrevocably and unconditionally stand released and discharged, and the Operational Creditors shall deem to have waived all rights to invoke or enforce the same. 3.3.5 Treatment of claims under Applicable Laws (including Taxes) (1) All claims that may be or that arise against the Company in relation to any payments required to be made by the Company under Applicable Law (including Taxes), or in relation to any breach, contravention or non compliance of any Applicable Law (including criminal laws), whether or not such claim....
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....e any claim (s) against the Company (including Financial Creditors, Operational Creditors, Other Creditors, Governmental Authorities, persons who have paid any advances to the Company against supply of goods or services by the Company, and persons in respect of whom credit balances were written-back by the Company in the years ended March 31, 2016, March 31, 2017 and March 31, 2018 have all filed their claims and all verifiable claims as on the date of approval of this Plan by the CoC, have been admitted by the Resolution Professional and are disclosed in the Information Memorandum, provided that nothing contained herein shall result in an increase in the Total Financial Outlay proposed under this plan. (ii) In the event any person that has any claim (s) against the Company (including Financial Creditors, Operational Creditors, Other Creditors, Governmental Authorities, or otherwise), has not submitted its claim(s) (whether or not it was aware of such claim at such time), or if the claim(s) filed by any person has been rejected and/or not been admitted by the Resolution Professional (including any claim against the Company from GAIL (India) Limited arising directly or indi....
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....ment has V categorically held as follows - "102. In the result, we answer the questions framed by us as under: (i) That once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; (i) 2019 amendment to Section 31 of the l&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect; (iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of....
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....dmission of the appeals along with interest accrued thereon is directed to be refunded to the appellant." 4.8 However from the date of approval of the resolution plan by the NCLT, the appeal filed by the applicant has abated and CESTAT has become functus officio in the matters relating to this appeal. Further it is also settled that the impugned order's in the appeals have got merged in the order of the NCLT approving the Resolution Plan. The decision of the Hon'ble Bombay High Court referred to by the learned Authorized representative clearly lays down the test as in which condition the said doctrine shall apply in following manner "34. The applicability of the doctrine thus depends on the nature of the Appellate or revisional jurisdiction. The scope of the statutory provisions conferring the appellate or revisional jurisdiction must be first considered. As rightly argued by the Appellants the doctrine of merger is not a doctrine of rigid and universal application. Merely because there are two orders, one by the inferior authority and the other by a superior authority passed in an appeal or revision, it cannot be said that there is a merger of the two orders irrespecti....