2025 (2) TMI 304

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....s "the Respondent Company") was set up in September 2008 to operate a planned 1.25 million metric tonnes per year purified terephthalic acid (PTA) plant at Mangalore, Karnataka. The plant, a backward integration project of the Respondent Company's polyester plant, was about to be commissioned in 2017 but ceased operations after the Respondent Company defaulted on a loan the very same year. 3. On an application filed by IDBI Bank Ltd. under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "IBC"), which pertains to the initiation of insolvency proceedings by the financial creditors in cases of default, the Respondent Company was admitted into Corporate Insolvency Resolution Process (hereinafter referred to as "CIRP") by the National Company Law Tribunal (hereinafter referred to as "NCLT") vide order dated 28.01.2022. The NCLT's order triggered the imposition of a moratorium, a legally mandated pause on all the proceedings (including litigation, arbitration, and enforcement actions) against the Respondent Company, and Mr. Sundaresh Bhat was first appointed as an Interim Resolution Professional (hereinafter referred to as "IRP") and later on as Resol....

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....mited and ONGC Limited ("IOCL-ONGC Consortium"); ii MPCI Private Limited ("MCPI"); and iii GAIL (India) Limited ("GAIL"). 7.2 After evaluating in terms of both qualitative and quantitative criteria, on 15.10.2022, the CoC approved the Resolution Plan submitted by GAIL with 100% voting share. The Letter of Intent dated 16.10.2022 was duly acknowledged by GAIL, signifying their acceptance of the terms outlined in the resolution process. Also, on 18.10.2022, GAIL submitted a performance bank guarantee amounting to 10% of the total Resolution Plan value, i.e. Rs. 210,10,00,000. 8. The RP filed IA 899/22 on 20.10.2022 before the NCLT, seeking approval of the Resolution Plan pursuant to Section 30(6) of the IBC. The statutory period of 270 days for the completion of the CIRP, as prescribed under section 12(3) of the IBC, expired on 30.10.2022. 9. Upon the filing of IA 899/22, the NCLT, on 09.11.2022. issued notice to the Income Tax Department, affording an opportunity to appear and make submissions, including any claims or objections they may have had concerning the Resolution Plan. The matter was subsequently listed for hearing before the NCLT on 21.02.2023; h....

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....e copy of NCLAT order dated 15.10.2024 is filed before us at page 112 to 135 of the Paper Book. 12. Ld. AR has drawn attention to the relevant clauses of the Resolution Plan, dealing with the treatment of government/ statutory dues, made available at page 59 to 60 of PB: "4.4. Treatment of Government/ Statutory Dues 4.4.1. Pursuant to the settlement of the Statutory Creditors as per Clause 4,3.5 of Part D above and on Effective Date, all the dues under the provisions of Income Tax Act, 1961, including taxes, duty, penalties, interest, fines, cesses, unpaid tax deducted at source / tax collected at source, whether admitted or not, due or contingent, whether part of above claim of income tax authorities or not, asserted or unasserted, crystallized or uncrystallised, known, or unknown, secured or unsecured, disputed or undisputed, present or future, in relation to any period prior to the Closing Date, shall stand extinguished and the Corporate Debtor or Resolution Applicant shall not be liable to pay any amount against such demand. 4.4.2. All assessments/ appellate or other proceedings pending in case of the Corporate Debtor, on the Effective Date, relati....

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....y period prior to the Closing date (i.e. 89 days from the date of approval of Resolution Plan by the NCLT) shall stand extinguished and the Respondent Company shall not be liable to pay any amount against such demand. In other words, any dues/ demands raised even subsequent to the date of approval of the Resolution Plan (but within 89 days therefrom) shall also stand extinguished. 14. It is a settled law that once the Resolution Plan has been approved by the NCLT, new claims of the Tax Department cannot be considered. This position has been upheld by the Hon'ble Supreme Court in the case of Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited (2021) (13 S.C.R. 737) (SC). The relevant extracts of the Hon'ble Supreme Court judgement are as follows: "86. As discussed hereinabove, one of the principal objects of l&B Code is, providing for revival of the Corporate Debtor and to make it a going concern. I&B Code is a complete Code in itself. Upon admission of petition under Section 1, there are various important duties and functions entrusted to RP and CoC. RP is required to issue a publication inviting claims from all the stakeholders....

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....for the period prior to the date on which the NCLT grants its approval under Section 31 could be continued. " (Emphasis supplied) 15. The similar view has been taken by the Hon'ble Supreme Court in the case of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. (2019) (16 S.C.R. 275) (SC). It has been held by the Hon'ble Supreme Court that: "67. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/ Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective res....