TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1641
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....ding the appeal are: i. An asset of corporate debtor situated within the Municipal Corporation Kolkata was assessed for property tax. Part payment was made by the corporate debtor in the year 2018. Amount of Rs. 30,28,233/- remain unpaid hence the warrant of distress was issued to the corporate debtor in the year 2018. ii. By order dated 11.01.2021, CIRP commenced against the corporate debtor, Talwalkers Better Value Fitness Ltd. Demand notice for outstanding property tax was issued by the appellant on 22.03.2022. iii. Adjudicating authority initiated liquidation proceeding vide order dated 28.04.2022. Appellant sealed the property on 24.09.2022. Adjudicating authority on 02.05.2023 directed the appellant to de-seal the property. Appellant was directed to file the claim before the liquidator. Appellant filed a claim in 'Form-C' on 12.05.2023 for Rs. 51,72,258/-. There has been exchange of correspondence between the liquidator and the appellant, ultimately the liquidator vide letter dated 21.07.2023 partly rejected the claim and categorised the appellant as unsecured operational creditor. iv. Appellant filed Appeal No. 03/2024 under Section 42 of ....
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....n a separate interest-bearing account until the dues of the Applicant are paid; h) Stay the auction of the Property during the pendency of this Application; i) Stay the Liquidation proceedings of the Corporate Debtor during the pendency of this Application; j) Grant ad-interim reliefs in respect of prayers- above; k) Condone the delay of three days in filing this application in the interest of justice;" v. Adjudicating authority vide impugned order rejected the submission of the appellant that appellant is a secured creditor of the corporate debtor. Adjudicating authority relying on judgment of the Calcutta High Court in 'Kolkata Municipal Corporation & Anr.' Vs. 'Union of India & Ors.' reported in [(2021) SCC OnLine CAL 145], held that the debt of the appellant is a crown debt. Relying on the said judgment, adjudicating authority held that appellant is not a secured creditor and the debt of the appellant is categorised as Government dues. Liquidator was directed to admit the claim of Rs. 34,23,403/-. 3. We have heard learned counsel for the appellant and learned counsel appearing for the respondent. 4. Learned counsel for the appe....
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....state legislature. Against the judgment of Calcutta High Court in 'Kolkata Municipal Corporation & Anr.' (supra), SLP has already been dismissed on 14.10.2024. Learned counsel for the respondent has placed reliance on the judgment of the Hon'ble Supreme Court in 'Pashchimanchal Vidyut Vitran Nigam Ltd.' (supra). The judgment relied by appellant of the Hon'ble Supreme Court in 'Rainbow Papers Ltd.' (supra) is not applicable. 'Rainbow Papers Ltd.' (supra) was considering the provisions of Section 48 of Gujarat Value Added Tax Act, 2023 which contained a non-obstante clause, whereas, Section 232 of the Kolkata Municipal Corporation Act does not contain any non-obstante clause. Only issue to be considered in this appeal is as to whether the appellant is secured creditor or not. Learned counsel for the respondent supported the order of the adjudicating authority. 6. We have considered the submissions of the counsel for the parties and perused the records. 7. Only question which need to be answered in the present case is as to whether the appellant is secured creditor of the corporate debtor by virtue of Section 232 of the Kolkata Municipal Corporation Act, 1980. There is no disput....
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.... "56. Section 48 of the GVAT Act is not contrary to or inconsistent with Section 53 or any other provisions of IBC. Under Section 53(1)(b)(ii), the debts owed to a secured creditor, which would include the State under the GVAT Act, are to rank equally with other specified debts including debts on account of workman's dues for a period of 24 months preceding the liquidation commencement date. 57. As observed above, the State is a secured creditor under the GVAT Act. Section 3(30) IBC defines "secured creditor" to mean a creditor in favour of whom security interest is credited. Such security interest could be created by operation of law. The definition of "secured creditor" in IBC does not exclude any Government or Governmental Authority." 10. Learned counsel for the appellant has also placed reliance on the judgment of the Hon'ble Supreme Court in 'K.C. Ninan' Vs. 'Kerala State Electricity Board & Ors.' reported in [(2023) 14 SCC 431], where the issue was considered by the Hon'ble Supreme Court is as to whether the Paschimanchal Vidyut Vitrat Nigam is a secured creditor of the corporate debtor by virtue of provisions of electricity supply code. One of the issues fra....
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.... be recovered from a subsequent transferee. ... 116. The provisions of the statute and statutory conditions of supply need to be examined to determine whether the conditions of supply provide for the creation of a charge in terms of Section 100 of the Transfer of Property Act, 1882. Once it is established that a statutory charge is created and required notice was given, the charge attaches to the property and the licensee is entitled to recover the unpaid electricity dues by proceeding against the premises. Consequent to the charge created, Article 62 of the Limitation Act, 1963 would come into play. Article 62 of the Limitation Act relates to enforcing the payment of money procured by mortgaged or otherwise charged upon the immovable property. The electricity utilities would get a period of twelve years to recover the dues charged on the immovable property from the date when the money payable became due. 117. In light of the above discussion, we are of the opinion that the electricity utilities can create a charge by framing subordinate legislation or statutory conditions of supply enabling recovery of electricity arrears from a subsequent transferee. Su....
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....nsider the nature of dues of Paschimanchal Vidyut Vitran Nigam Ltd. as to whether the said dues are Government dues or whether it is secured operational debt. Hon'ble Supreme Court in the above case has noticed the judgment of Hon'ble Supreme Court in 'K.C. Ninan' (supra) reiterated the proposition that charge could be created not only by plenary legislation but could be created by regulations. In paragraph 46, following has been held: "46. A recent ruling of this Court in K.C. Ninan v. Kerala SEB [K.C. Ninan v. Kerala SEB, (2023) 14 SCC 431 : 2023 SCC OnLine SC 663] examined the circumstances in which such a "charge" could be constituted in law, and held as follows : (SCC para 107) "107. Consequently, in general law, a transferee of the premises cannot be made liable for the outstanding dues of the previous owner since electricity arrears do not automatically become a charge over the premises. Such an action is permissible only where the statutory conditions of supply authorise the recovery of outstanding electricity dues from a subsequent purchaser claiming fresh connection of electricity, or if there is an express provision of law providing for creation of a st....
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....creditors who may have secured interest (in respect of which amounts may be payable to them). The repeated reference of lowering of priority of debts to the government, on account of statutory tax, or other dues payable to the Central Government or the State Government, or amounts payable into the Consolidated Fund on account of either government, in the various reports which preceded the enactment of IBC, as well as its Preamble, means that these dues are distinct and have to be treated as separate from those owed to secured creditors. 48. The Central Government and State Government are defined by the General Clauses Act, 1897. The former is defined by Section 3(8), and latter by Section 3(60). The distinction between the Governments has been recognised and maintained by previous decisions of this Court. for instance, in Shrikant v. Vasantrao [Shrikant v. Vasantrao, (2006) 2 SCC 682] this Court underlined that while an entity or corporation may be "State" under Article 12 of the Constitution of India, nevertheless, its distinct entity, for other purposes, is always maintained, and fact-dependent : (SCC p. 694, para 19) "19. ... Both may answer the definition of "....
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....though it was made a body corporate with all the necessary and incidental powers that go with such concept. The International Airports Authority is one such corporation created under the Act with no share capital but which has its own properties, its own fund, accounts, employees and capable of lending and borrowing and entering into contracts." 50. The specific mention of other class of creditors whose dues are statutory, such as dues payable to workmen or employees, "the provident fund, the pension fund, the gratuity fund" under Section 36(4), which excludes these enumerated amounts from the liquidation, especially clarifies that not all dues owed under statute are treated as "government" dues. In other words, dues payable to statutory corporations which do not fall within the description "amounts due to the Central or State Government" such as for instance amounts payable to corporations created by statutes which have distinct juristic entity but whose dues do not constitute government dues payable or those payable into the respective Consolidated Funds stand on a different footing. Such corporations may be operational creditors or financial creditors or secured credito....
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....ofessional, in taking control and custody of the asset, being subject to the determination of ownership by any authority, as contemplated under section 18(f)(vi) of the IBC. Rather, the claim of the KMC, in the absence of any successful challenge thereto, attained finality, fastening a liability upon the corporate debtor. As per the interpretation in Embassy Property Developments P. Ltd. v. State of Karnataka 2019 SCC OnLine SC 1542 ; (2020) 9 Comp Cas-OL 609 (SC), such a finalized claim would come within the purview of "operational debt" under section 5(21) of the IBC. Hence, the resolution professional has jurisdiction to take custody and control of the same. 48. As discussed earlier, the parameters of powers of the National Company Law Tribunal, as an Adjudicating Authority under section 60 of the IBC, is defined and circumscribed by the scope of section 18(f)(vi) of the IBC. Such exercise of power would fall within the ambit of the expression "arising out of or in relation to the insolvency resolution", as envisaged in section 60(5)(c) of the IBC. 49. The proposition laid down in Principal CIT v. Monnet Ispat and Energy Ltd. (Special Leave to Appeal (C) No(s).....