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2023 (10) TMI 236
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..... Varinder Kumar Sharma, Ms. Parul Sharma, Advocates in I.A. No. 3701, 3702 and 3704 of 2023 JUDGMENT ASHOK BHUSHAN, J. This Appeal has been filed challenging the order dated 07.03.2023 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Special Bench in I.A. No. 2836/PB/2021 by which the Adjudicating Authority has approved the Resolution Plan submitted by Respondent Nos. 2 and 3 in the Corporate Insolvency Resolution Process of M/s Jaypee Infratech Limited, the Corporate Debtor. Brief facts of the case necessary to be noticed for deciding the Appeal are: (i) By order dated 09.08.2017, NCLT, Allahabad Bench admitted Section 7 application filed by IDBI Bank against the Corporate Debtor - M/s Jaypee Infratech Ltd. Mr. Anuj Jain was appointed as Interim Resolution Professional (IRP). (ii) On 28.09.2017, Appellant filed its claim of Rs.3334.29 Crores plus interest for the AY 2010-11 and AY 2012-13 before the Interim Resolution Professional. (iii) Appellant vide letter dated 26.12.2017 enquired about status of their claim. Interim Resolution Professional vide letter dated 29.01.2018 informed the Assistant Commissioner of I....
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....f the Corporate Debtor, Shri Ramji Srinivasan, learned senior counsel for Respondent Nos. 2 and 3, Successful Resolution Applicant. We have also heard learned counsels for the Interveners. 3. Learned counsel for the Appellant challenging the order contends that the Resolution Applicant has wrongly stated that the Income Tax Department did not file any claim pertaining to operational debt. It is submitted that the Adjudicating Authority has erroneously observed in Para 20.13 the at Department having not filed any claim, no payment provided in the Resolution Plan. It is submitted that the Appellant has filed claim of Rs.3334.29 Crores in Form B on 28.09.2017 within time prescribed in Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Resolution Plan has erroneously considered the claim of Income Tax Department in its Resolution Plan. It is submitted that the Resolution Plan wrongly mentions that claim for AY 2012-13 has been set aside by ITAT whereas appeals were dismissed by order dated 16.01.2023. The payment of Rs.10 Lakhs towards claim of the Income Tax Department is fraud and not in acc....
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....10-11 was set aside by the ITAT by its order dated 03.11.2017 and claim for AY 2012-13 has been treated as contingent liability since an appeal has been filed by JIL before the ITAT, which was pending. The IRP by letter dated 29.01.2018 informed the Appellant that their claim is not admissible. The Appellant never challenged non-admission of their claim. It is further submitted that it was obligatory for creditor to file claim for entire liability of Rs.33,000 Crores which accrued on 31.03.2017. In the scheme of IBC filing of claim is not limited to claim in default and what is due and default. It is obligatory for Appellant to claim entire Rs.33,000 Crores which was crystalized and determined amount as per 31.03.2017. Entire liability arises before the commencement of CIRP of JIL. It is submitted that in view of the clean slate theory, as laid down by Hon'ble Supreme Court in "Ghanashyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd., (2021) 9 SCC 657" no subsequent claim can be entertained which ought to have been filed in CIRP process. The Resolution Applicant takes the Corporate Debtor on clean slate to avoid hydra head popping up. Copy of the Resolut....
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....th Jaypee Kensington Judgement." 8. The above Para refer to Para 19.2. Para 19 deals with 'Financial outlay of Resolution Plan. Para 19.2 (of the impugned order) deals with 'Unsecured Financial Creditors' and under the sub-head (3) it deals with Operational Creditors which included Income Tax Department. Para 19.2 of the impugned order is as follows : 3) Operational Creditors a. YEIDA Rs.0.20 Cr. [Refer clause 20.2 at pg 72, clause 20.8 at pg 83 of Suraksha Resolution Plan dated 07.06.2021 read with addendum dated 09.06.2021 filed in IA 1603/2022] b. Workmen NIL c. Employees NIL d. Income Tax Rs.0.10 Cr [Refer clause 19.3 at page 71 of Suraksha Resolution Plan dated 07.06.2021 read with addendum dated 09.06.2021 filed in IA 1603/2022] e. Other Operational Creditors Rs.0.10 Cr [Refer clause 21.2 at page 85 of Suraksha Resolution Plan dated 07.06.2021 read with addendum dated 09.06.2021 filed in IA 1603/2022] Total (a+b+c+d+e) Rs.0.40 Cr [Refer (3) in point 7 at page 271 in Form H filed with IA 2836/2021] 4. Public Shareholders ....
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.... and if a claim is not made within the stipulated time, the same cannot become a part of the Information Memorandum to be prepared by IRP and obviously, it would not enter into consideration of the resolution applicant es also of the Committee of Creditors. In the very scheme of the corporate insolvency resolution process, a resolution applicant cannot be expected to make a provision in relation to any creditor or depositor who has failed to make a claim within the time stipulated and the extended time as permitted by Regulation 12. 19.3. The Income Tax Department ought to have submitted the Claim to the Resolution Professional and it should have been decided by the Resolution Professional so that Resolution Applicant could proceed on a fresh slate, in line with in the Jaypee Kensington Judgement, the relevant extract whereof in relation whereto has been reproduced hereinbelow for ready reference: "Para 135.1..... In Essar Steel (supra), tulile dealing with the topic 'Extinguishment of Personal Guarantees and Undecided Clains, this Court disapproved that part of the NCLT judgment which held that other claims, that might exist apart from those decided ....
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....ed timeframe, which statement is made in Para 19.2, as extracted above. We may first examine whether claim was filed within time, whether the claim was admitted and what is the status of the claim in the CIRP of the Corporate Debtor. We have noted above that the Resolution Professional has published the list of creditors as on 29.05.2021, which is filed at page 418-419 of the paper book. Details of the 'Operational Creditors Claim' are at page 419 under heading (B). With regard to Income Tax Department, Note 2 on the same page explains the claim. Page 419 including Note 2 is as follows: "B. Operational Creditors Claim # Name of the Operational Creditor Date of claim Claims Filed (INR crores) Claims Admitted (INR crores) Note 1 Yamuna Expressway Industrial Development Authority 23-Aug-17 6,111.6 461.0 1 2 Income tax department 28-Sep-17 3,334.3 - 2 3 Jaiprakash Associates Ltd. (JAL) 23-Aug-17 261.8 - 3 4 SBI capital market Ltd. 24-Aug-17 3.8 2.7 4 5 JIL Informat....
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....fect has also been given (Copy attached) 5. For the claim amount pertaining to AY 2012-13, it may be noted that the same is shown as contingent liability in the books of accounts as the Company has already filed an appeal before Hon'ble ITAT. Thus the said liability does not exists as on date. You are hereby requested to acknowledge the above for non-admissibility of your claim. However, in case of any discrepancy / differences of opinion, you are requested to kindly intimate us. Thanking you, Yours sincerely Anuj Jain Resolution Professional IP Registration no. 1881/IPA-001/IP-P00142/2017-18/10306 (Jaypee Infratech Limited is under Corporate Insolvency Resolution Process of the Insolven and Bankruptcy Code 2016. Its affairs, business and assets are being managed by the Res Professional, Mr Anuj Jain, appointed by the National Company Law Tribunal by order date August 2017 under the provisions of the Code). Copy to: i) The Pr. Commissioner of Income Tax, Noida ii) The Addl. Commissioner of Income Tax, Range-1, Noida" 12. From the above it is clear that the IRP never raised any ....
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.... NBCC has retained the right to withdraw its Resolution Plan in case INR 750 Cr along with interest accrued thereon is not made available to JIL. 2. Enforcement Directorate has initiated investigation under the Prevention of Money Laundering Act, 2002 ("PMLA") against JIL. JIL to be discharged from PMLA and other investigations. NBCC has retained the right to withdraw from its Resolution Plan in case the said relief is not granted. 3. 858 acres of JIL's land was mortgaged with JAL lenders to secure debt of JAL without any consideration or counter guarantee to JIL (Transaction). NBCC has sought relief that 858 acres of mortgaged land shall continue to be vested in JIL free of any mortgage, charge and encumbrance subject to the orders of the Hon'ble Supreme Court. Note: In the meanwhile, out of 858 acres, the Hon'ble Supreme Court vide order dated 26.2.2020 have set aside mortgage of 758 acres as avoidance transaction. 4. Deemed approval of YEIDA for business transfer Approval of the Adjudicating Authority shall be binding on YEIDA and constitute adequate approval by YEIDA for any business transfer to be undertaken between the Corporate Debtor and Expresswa....
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....extinguished, on account of failure of YEIDA to allow JIL to collect and retain toll/fee from the users of the Noida-Greater Noida Expressway during the term of the Concession Agreement. 15. Para 39.3 was thus only reproduction of reliefs which was sought by NBCC. In Para 49 of the judgment, Hon'ble Supreme Court has made observations regarding the NCLT order which dealt with reliefs and concessions. Para 49 is as follows: "49. Having thus dealt with the relevant objections, the NCLT entered into the fifth segment of its order and generally dealt with the provisions relating to the reliefs and concessions with the observations/ directions as under: - "134. The clauses already covered in the aforesaid discussion will not be discussed again, but as to the clauses not covered above are hereby dealt with as follow: - Clauses 1 to 5 have already been covered in the above discussion. Clause No. 6:- With regard to the past liabilities of income tax authority, they shall stand extinguished. Clause No. 7:- Since reduction of the share capital of the corporate debtor is not part of this resolution, this Adjudicating Authority cannot waive the p....
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.... Clause No. 21:- This point has already been dealt with in the above discussion. Clause No. 22:- For the purpose of consolidation of the books of the CD with the resolution applicant, the effective date shall be treated as the first day of the quarter immediately succeeding quarter in which the resolution applicant completes the takeover of the CD. Clause No. 23:- This point is not clear as to whether it is referring to the land of the Corporate Debtor mortgaged to the lenders of JAL, if that is so, since it has been decided by the Honourable Supreme Court, it need not be reiterated. Clause No. 24:- This generalization of cancellation of all agreements cannot be granted unless each transaction is specifically dealt with. Clause No. 25:- The resolution applicant cannot modify the resolution plan once it is approved by the CoC. Clause No. 26:- As to the claims placed before the IRP and other liabilities of the CD which are shown in the records of the company and where notice has been given to such creditors, they can be construed as withdrawn after the approval date. Clause No. 27:- With regard to extension of concession pe....
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....art of the Resolution Plan which did not find favour with the Hon'ble Supreme Court for approval has been specifically mentioned which does not refer to claim of the Income Tax Department. 18. Hon'ble Supreme Court under Para 225 concluded the matter in following manner: "225. Accordingly, while once again exercising our powers under Article 142 of the Constitution of India to do substantial and complete justice to the parties and in the interest of all the stakeholders of JIL, we conclude on these matters with the following order: 225.1. The matter regarding approval of the resolution plan stands remitted to the Committee of Creditors of JIL and the time for completion of the process relating to CIRP of JIL is extended by another period of 45 days from the date of this judgment. 225.2. We direct the IRP to complete the CIRP within the extended time of 45 days from today. For this purpose, it will be open to the IRP to invite modified/fresh resolution plans only from Suraksha Realty and NBCC (Only these resolution applicants were permitted to submit the revised plans in the judgment dated 06.11.2019) respectively, giving them time to submit the same wi....
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....cessions'. Para 132 expressly dealt with obligation of the Corporate Debtor vis-à-vis Income Tax Department. The Adjudicating Authority held that the Adjudicating Authority is not inclined to grant such a blanket relief. Para 132 of the order of the Adjudicating Authority is as follows: "132. Nevertheless, we would like to examine each of the reliefs and concessions asked for. The first relief and concession sought in the Annexure- II of the Resolution Plan are: "1. All the existing legal proceedings relating to Income Tax shall stand irrevocably and unconditionally abated, settled and all liability/ obligations of the Corporate Debtor vis-a-vis the Income Tax authority in relation to such matters shall stand extinguished in perpetuity." Through this relief, the SRA is seeking irrevocable and unconditional abatement/settlement in perpetuity of all Income Tax proceedings of the Corporate Debtor. Thus, the relief sought being abatement/settlement of all legal proceedings relating to Income Tax in perpetuity, we are not inclined to grant such a blanket relief. In our view, it is the duty of the SRA to seek termination of such litigations, pen....
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....not been granted as prayed by the Successful Resolution Applicant. The claim which was submitted in the proceeding and the Successful Resolution Applicant has very well dealt with claim submitted by the Income Tax Department of Rs.3334.29 Crores. Even if the claim for the AY 2012-13 of Income Tax Department cannot be said to be extinguished, Appellant being an Operational Creditor, the liquidation value of the Income Tax Department is NIL. The payment of Rs.10 Lakhs cannot be said to be violative of provisions of Section 30(2)(e). 24. We may also notice that the submission of learned counsel for the Respondent that claim of Rs.33,000 Crores which was crystalized prior to CIRP commencement should be held to be extinguished, which submission cannot be accepted. When the Appellant has not filed any claim for Rs.33,000 Crores in the CIRP process, we cannot accept the submission of learned counsel for the Respondent that the said claim stood extinguished. Even order dated 31.03.2017 which is relied by learned counsel for the Respondent only determine the revenue subsidy of Rs.33,000 Crores to the Corporate Debtor which was decided to be received on yearly basis in staggered manner. H....