TaxTMI 
TaxTMI 
2026 (8) TMI 24
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..../2024 by the learned 3rd Additional Senior Civil Judge, Rajkot, whereby the appellants - applicants herein - original defendants No.1 and 7; including original defendant No.2 were directed to pay the sum of Rs. 2,50,78,588/- to the respondent No.1 - original plaintiff. 2. For the sake of convenience and brevity, the parties herein are referred to as per their original status before the learned Judge of the trial Court. 3. Brief facts for adjudication of the present application are that defendant No.1 had delivered the cotton stock and against which raised several bills to the Corporate Debtor, GPI Textiles Ltd., during the year 2011 to the tune of Rs. 2,50,78,588/- and as the same remained unpaid which constrained the respondent No.1 herein to file a Special Summary Suit No.6 of 2019 (previously Special Summary Suit No.11 of 2012) to recover the sum of Rs. 2,51,53,738/- from the GPI Textiles Ltd., in its previous capacity as the Corporate Debtor. 3.1 It also transpires that on being served with the process, the defendant No.2 moved the Court by filing an application seeking Leave to Defend in the said suit and due to the simultaneous proceedings pending against said M/s. G....
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....ting the appellants herein - org. defendant No.1 and 7 to pay the sum of Rs. 2,50,78,588/- to the respondent No.1 herein who is original plaintiff which has given rise to the present appeal. 4. Heard the learned Advocates appearing for the respective parties at length. 5. Learned Advocate Mr. Masoom K Shah appearing for the applicants has submitted that the applicant herein is the Successful Resolution Applicant (SRA) of the original defendant No.1 whose Resolution Plan under the provisions of Insolvency and Bankruptcy Code, 2016 (herein after referred to as "IB Code, 2016") was approved by virtue of an order dated 27/04/2023 passed by the NCLT, Chandigarh. It is further submitted by learned Advocate for the applicant that the applicant cannot be equated with the status of the erstwhile GPI Textiles Ltd., rather can be considered as a new Avtar of the defendant No.1 as per the provisions of IB Code, 2016 and therefore, the applicant cannot be held responsible for any liability which is not the part of the resolution plan of the erstwhile Corporate Debtor post approval of the resolution plan. 5.1 It is further submitted on behalf of the applicants that applicant No.2 herein....
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.... local authority, guarantors and other stakeholders. On the date of approval of the resolution plan by the adjudicating authority, all such claims which are not a part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue any proceeding in respect to a claim which is not part of the resolution plan. The Bench declared that all dues including 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 proceeding in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued. Paragraph 102 of the aforesaid decision reads thus: "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 an....
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....- org. plaintiff sought to execute the same notwithstanding the approval of the resolution plan by the suit proceedings are erroneous and contrary to the law laid down in Electrosteel Steel Ltd., (now ESL Steel Ltd., (supra). 5.4 Learned Advocate for the appellant while inviting attention of this Court to the amended provisions of Section 31 of the Insolvency & Bankruptcy Code (Amendment) Act, 2026 (No.6 of 2026) has submitted that once the resolution plan is approved, the corporate debtor and its assets under any other law for the time being in force, prior to the date of approval shall be extinguished and no such proceedings shall be continued or instituted against the corporate debtor or its assets on the basis of such claims including the proceedings for assessment of the claims. The said amended Section 31 is reproduced hereunder for ready reference. "19. In section 31 of the principal Act,-- (a) in sub-section (1), after the existing proviso, the following proviso shall be inserted, namely:-- "Provided further that the Adjudicating Authority may, on an application made by the resolution professional, with the approval of the committee of creditor....
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.... plan, any claim, against the corporate debtor and its assets under any other law for the time being in force, prior to the date of approval, shall be extinguished; and (b) no proceedings shall be continued or instituted against the corporate debtor or its assets on the basis of such claims, including proceedings for assessment of the claims.". 5.5 Thus, while making the aforesaid submissions, it is submitted that the impugned order directing the appellants - applicants herein - original defendants No.1 and 7; including original defendant No.2 to pay the sum of Rs. 2,50,78,588/- to the respondent No.1 herein who is original plaintiff; is contrary to the established principles of law as the applicant herein is the New Avtar of the erstwhile GPI Textiles Ltd., followed by the proceedings initiated under the IB Code, 2016 which at the most can be said to be new Management / Establishment and therefore this Hon'ble Court may stay the operation and implementation of the impugned order. 6. Per contra, learned Advocate for the respondent No.1 herein - original plaintiff Mr. Parikh has submitted that applicants herein by filing the present appeal has sought to challenge the ....
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.... Engineer, TANGEDCO & Anr. [2024 SCC OnLine Mad 2330] and would submit to reject the prayer seeking stay of the impugned order. 7. Having heard the learned Advocates appearing for the respective parties and examining the order in question, the undisputed facts emerging from the record are that respondent No.1 herein - original plaintiff has filed the suit to recover the amount of Rs. 2,51,53,738/- from the defendant Nos.1, 2 and 7 wherein the defendants No.3 to 6 were deleted; the applicant herein is the Successful Resolution Applicant (SRA) of the original defendant No.1 whose Resolution Plan under the provisions of Insolvency and Bankruptcy Code, 2016 was approved by virtue of an order passed by the NCLT and the applicant cannot be equated with the status of the erstwhile GPI Textiles Ltd., and can be considered as a new Avtar of the defendant No.1 as per the provisions of IB Code, 2016 which cannot hold responsible for any liability which is not the part of the resolution plan of the erstwhile Corporate Debtor post approval of the resolution plan; the applicant No.2 herein has been impleaded as defendant No.7 who in fact was never Director or share-holder of the applicant No.....