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2023 (10) TMI 236
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....cates 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 Income Tax that with regard to AY 2010-11, the Company has received favoura....
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....esolution 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 accordance with law. List of creditors prepared by the Resolution Professional has noted submission of the claim by ....
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....nt 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 Resolution Plan could not have been shared with the Appellant, which can only be done after approval of the plan. The appe....
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....ara 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 Rs.0.14 Cr [Refer clause 24.8 at page 90 of Suraksha Resolution Plan dated 07.06.2021 read with addendum dated 09.06.2021 filed in IA 1603/2022] [Refer point 8 of Form H at page 273 filed with IA 2836/2021] Grand Total (1+2+3+4) Rs.20,363.36....
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....lution 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 on merits by the resolution professional and by Die Adjudicating Authority/Appellate Tribunal, could be decided in an appropriate forum in terms of Section 60(6) of the Code. This Court specifically held that a resolution applicant cannot be made to suddenly encounter undecided claims after resolution plan submitted by him has b....
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....age 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 Information Technology Ltd. 21-Aug-17 0.4 0.4 4 6 Kone Elevator India Private Ltd. 23-Aug-17 0.3 0.0 4 7 IDBI Capital Markets and Securities Ltd. 23-Aug-17 0.2 0.1 4 8 Mitsubishi Elevator India Private Ltd. 21-Aug-17 0.1 0.0 4 9 Advance Panels and Switchgears 23-Aug-17 0.1 0.0 4 Notes : 2. Of the total claim, INR 1,276 crores is pending before ITAT and for balance amount of INR 2,058 crores, JIL has received a favourable order from ITAT. JIL has received on order dated 29 September 2017 f....
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....irs, 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 dispute regarding non-submission of claim by the Income Tax Department in Form B. What was communicated to the Department was that claim for AY 2010-11 does not subsist and with regard to claim pertaining to AY 2012-13 Company having already filed appeal before ITAT, the said liability does not exist as on date. 13. In the list of creditors which was published by the IRP, it was clearly mentioned that claim has been received of Rs.3334.29 Crores form the Income Tax Department. Learned counsel for the Appellant has referred to the provisions of Income Tax Act; Section 220 of the Income Tax Act which provides that when tax payable and when assessee deem in default. Demand was raised for AY 2010-11 and AY 2012-13 only. Demand for AY 2010-11 having been set aside, there is no error in not accepting any claim for the said ....
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....ide 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 Expressway SPV. As per NBCC, no separate approval will be required for 'carve-out' and transfer of lands to land bank SPV and toll road to Road SPV as contemplated in the plan. 5. Income Tax Liability On account of transfer of land parcels from YEIDA to JIL in terms of the Concession Agreement, the Income Tax authority has been making an addition to the income of approximately INR 3,000 Cr on an annual basis estimated by the Resolution Applicant to be a tax demand of INR 33,000 Cr. for a period of 30 years, treating the transfer of land parcels as the revenue subsidy. This amount is being treated as operational debt and is being settled in accordance with the Resolution Plan. 6. INR 716 Cr advance to JAL on Insolvency commencement date (subsequently this amount has reduced to approx. INR 500 crore) INR 716 Cr was advanced to JAL towards construction work an....
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....lause 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 procedure for reduction of share capital in relation to the companies not yet incorporated. Clause No. 8 & 10:- Payment of stamp duty mentioned in clause 8 is waived to the extent permissible under law. Clause No. 9:- Any non-compliance arising out of past claims prior to CIRP initiation shall not have any bearing on this corporate debtor from hereof. Clause No. 11:- The lenders to the corporate debtor shall regularise all the accounts and ensure that such classification of the loan account is standard in their books with effect from the transfer dates. Clause No. 12:- All claims which have been placed before the RP and any criminal proceedings appurtenant to those claims are hereby extinguished. Clause No. 13:- As to the contracts relating to the development of land by JAL, the Resolution applicant can reserve its right to terminate the same, as to the claims, if any, the resolution applicant has right to take appr....
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....iven to such creditors, they can be construed as withdrawn after the approval date. Clause No. 27:- With regard to extension of concession period by YEIDA, it is YEIDA to decide as to whether such extension should be given or not. Clause No. 28:- This Adjudicating Authority can only direct the Central Government and Reserve Bank of India to accord permissions to the extent permissible under law."" 16. Para 216 and 217 of the judgment are summation of findings; final order and conclusion. We have looked into the various conclusions and findings in Para 216. None of the sub-paras of Para 216 deals with the claim of the Income Tax Department. Para 217 is as follows: "217. The net result of the discussion and findings hitherto is that some of the terms and stipulations of the resolution plan of NBCC, which was voted for approval by 97.36% of the voting share of the Committee of Creditors, do not meet with approval. Although, barring such terms and stipulations, all other terms and propositions of the resolution plan stand approved. To be specific, the terms and stipulations in the resolution plan which do not meet with approval are those concerning: (a) the land providing agency....
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....e judgment dated 06.11.2019) respectively, giving them time to submit the same within 2 weeks from the date of this judgment. 225.3. It is made clear that the IRP shall not entertain any expression of interest by any other person nor shall be required to issue any new information memorandum. The said resolution applicants shall be expected to proceed on the basis of the information memorandum already issued by IRP and shall also take into account the facts noticed and findings recorded in this judgment. 225.4. After receiving the resolution plans as aforementioned, the IRP shall take all further steps in the manner that the processes of voting by the Committee of Creditors and his submission of report to the Adjudicating Authority (NCLT) are accomplished in all respects within the extended period of 45 days from the date of this judgment. The Adjudicating Authority shall take final decision in terms of Section 31 of the Code expeditiously upon submission of report by the IRP. 225.5. These directions, particularly for enlargement of time to complete the process of CIRP, are being issued in exceptional circumstances of the present case and shall not be treated as a precedent. ....
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....such litigations, pending before the relevant Authorities, in accordance with the law. It would not be apt for this Adjudicating Authority to interfere with the jurisdiction of various legal forums on a blanket basis and therefore, the relief is declined." 21. Para 135 also dealt with the relief of waiver of Income Tax Authority dues of further claims, which was not granted. Para 135 of the order is as follows: "135. The next relief and concession asked by the SRA is mentioned in Serial No.4 of Annexure II, which reads as under: "4. All Governmental Authorities (including the Income Tax authority) to waive the non-compliances of the Corporate Debtor or further claims of the Governmental Authorities on the Corporate Debtor arising out of or in relation to the past claims or non-compliances, prior to the Approval Date." Since the relief sought is with respect to non-compliance of the CD or further claims of the Governmental Authorities (including the Income Tax authority) on the Corporate Debtor, which has neither been crystalized nor an opportunity of hearing to the relevant Governmental Authorities including the Income Tax Department was available, we are not inclined to gra....
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....res did not become due on the Corporate Debtor on passing of the order dated 31.03.2023 but become due when demands are raised year to year. That is why Appellant has filed claim for AY 2010-11 and 2012-13 in the CIRP of the Corporate Debtor. 25. Further, as noted above, reliefs and concessions claimed by the Successful Resolution Applicant in the Resolution Plan has been specifically rejected in Para 132, 135 and 136 of the impugned order. The submission of the Respondent No.1 is not liable to be accepted in view of the express refusal of reliefs and concessions as prayed for. We may notice that the Appeal has been filed by the Income Tax Department aggrieved by treatment of their claim and not by Respondent No. 2 and 3. 26. Now we may notice, I.A. No. 2910 of 2023 filed by JIL Real Estate Allottees Welfare Society who sought permission to intervene in the Appeal. Intervenor at best support the impugned order or make submissions against the order. Respondent No.1, 2& 3 has already made elaborate submissions to support the impugned order. We see no reason to separately consider I.A. No. 2910 of 2023. 27. I.A. No. 2331 of 2023 has been filed by Jaypee Kensington Boulevard Apartme....