TaxTMI 
TaxTMI 
2026 (9) TMI 96
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....bast, and Mr. Ashutosh Shrivastava, Advocates For Union of India : Mr. Abhishek Banjare, C.G.C. For State: Mr. Vinay Pandey, Deputy Advocate General (WPC No. 1074/2014, WPC No. 1005/2014, WPC No. 1007/2014, WPC No. 1008/2014) For the Petitioners: Mr. Ankit Singhal, Advocate along with Mr. Ashish Mittal, Advocate For the State : Mr. Vinay Pandey, Deputy Advocate General For the Respondent No. 6 (WPC No. 1074/2014): Mr. Anumeh Shrivatava, Advocate Order on Board 1. Since common question of law and facts are involved in these batch of writ petitions, therefore, they are heard together and being disposed of by common order. 2. In WPC No. 1074 of 2014, the petitioner has challenged demand of electricity duty dated 28.05.2014 to the tune of Rs. 41 crores. The facts are like that on 01.02.1990, the promoters of the petitioners had floated and incorporated a Public Limited Company under the provisions of the Companies Act, 1956 for setting up in phases Integrated Steel Plant in Raipur District as well as in Naharpalli, Raigarh. On 21.05.2001, a MOU was executed between the petitioner and the State of Chhattisgarh, wherein, the petitioner proposed to invest a sum ....
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....enerator Set and agreements were entered in alike manner, and subsequently, demand notices were issued to the petitioner to make payment of electricity duties and those demand notices have been challenged by filing this petition. 5. The facts of WPC No. 1103 of 2015 are that Government of Chhattsigarh leased out lands for extraction of Coal at Gare Palma and Milupara, District Raigarh in favour of the petitioner for period of 30 years vide order dated 07.06.2002. A notification was published in the official gazette on 10.05.2012. On 24.09.2014, lease-deed was cancelled. In the year 2015, Coal Block was again allocated to the petitioner, and subsequently, on 06.04.2015 demand of cess and taxes from the petitioner for sum of Rs. 2.13 cores were made. The petitioner made a representation before the respondent authorities on 01.05.2015. An interim order was passed by Writ Court on 27.01.2016 in favour of the petitioner as under :- "In the meanwhile, it is directed that the respondents shall only recover that amount of cess or royalty which is payable by the petitioner after adjusting the entire amount of royalty or cess, which is payable by the petitioner in accordance with....
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.... would submit that the issue involved in the present case is no more res-integra, even case of one of the petitioners, namely, Monnet Ispat & Energy Ltd. was considered by the Hon'ble Supreme Court in the matter of Ghanshyam Mishra and Sons Private Limited through the Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director and Others reported in (2021) 9 SCC 657. 9. On the other hand, Mr. Vinay Pandey, Dy. Advocate General, Mr. Abhishek Banjare, Central Government Counsel and Mr. Anumeh Shrivastava, Advocate appearing for respective respondents would oppose the submissions. They would contend that the Industrial Policy 2001-2006 was not applicable in the cases of the petitioners as they started commercial production after 2006 and the relevant provision for policy of 2004-2009 was in existence at that point of time. Therefore, the petitioners are not entitled to claim exemption. He would submit that these petitions deserve to be dismissed. 10. I have heard learned counsel for the parties and perused the documents placed on record. 11. Admittedly, learned NCLT, Mumbai Bench initiated Corporate Insolvency Resolution Process (CIRP) vide or....
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....ered by RP after receipt of various claims in response to the statutorily mandated public notice. The resolution plan is required to provide for the payment of insolvency resolution process costs, management of the affairs of the Corporate Debtor after approval of the resolution plan; the implementation and supervision of the resolution plan. It is only after the Adjudicating Authority satisfies itself, that the plan as approved by CoC with the requisite voting share of financial creditors meets the requirement as referred to in subsection (2) of Section 30, grants its approval to it. It is only thereafter, that the said plan is binding on the Corporate Debtor as well as its employees, members, creditors, guarantors and other stakeholders involved in the resolution Plan. The moratorium order passed by the Adjudicating Authority under Section 14 shall cease to operate, once the Adjudicating Authority approves the resolution plan. The scheme of I&B Code therefore is, to make an attempt, by divesting the erstwhile management of its powers and vesting it in a professional agency, to continue the business of the Corporate Debtor as a going concern until a resolution plan is drawn up. On....
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.... creditors committee, within a reasonable period after the solution is implemented; and lastly 154.3 the plan should comply with existing laws governing the actions of the entity while implementing the solutions. 155. The Committee also expressed the opinion, that there should be freedom permitted to the overall market, to propose solutions on keeping the entity as a going concern. The Committee opined, that the details as to how the insolvency is to be resolved or as to how the entity is to be revived, or the debt is to be restructured will not be provided in the I&B Code but such a decision will come from the deliberations of CoC in response to the solutions proposed by the market. 156 This Court in the case of K. Sashidhar (supra) observed thus: "32. Having heard the learned counsel for the parties, the moot question is about the sequel of the approval of the resolution plan by CoC of the respective corporate debtor, namely, KS&PIPL and IIL, by a vote of less than seventy-five per cent of voting share of the financial creditors; and about the correctness of the view taken by NCLAT that the percentage of voting share of the financial creditors ....
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....ng shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the "commercial wisdom" of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable." (emphasis supplied) 158. This Court has held, that it is not open to the Adjudicating Authority or Appellate Authority to reckon any other factor other than specified in Sections 30(2) or 61(3) of the I&B Code. It has further been held, that the commercial wisdom of CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. This Court thus, in unequivocal terms, held, that there is an intrinsic assumption, that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. It has been held, that the opinion expressed by CoC after due deliberations in the meetings through voting, as per voting shares, is a col....
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....rying on the business of the Corporate Debtor does not become impossible, which suggestion may, in turn, be accepted by the resolution applicant with a consequent modification as to distribution of funds, etc. It has been held, that what is important is, the commercial wisdom of the majority of creditors, which is to determine, through negotiation with the prospective resolution applicant, as to how and in what manner the corporate resolution process is to take place. 161. The view taken in the case of K. Sashidhar (supra) and Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) has been reiterated by another three Judges Bench of this Court in the case of Maharashtra Seamless Limited (supra). 162. In all the aforesaid three judgments of this Court, the scope of jurisdiction of the Adjudicating Authority (NCLT) and the Appellate Authority (NCLAT) has also been elaborately considered. It will be relevant to refer to paragraph 55 of the judgment in the case of K. Sashidhar (supra), which reads thus: "55. Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the ....
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.... 163.2 the repayment of the debts of operational creditors in prescribed manner, 163.3 the management of the affairs of the corporate debtor, 163.4 the implementation and supervision of the resolution plan, 163.5 the plan does not contravene any of the provisions of the law for the time being in force, 163.6 conforms to such other requirements as may be specified by the Board. 164. It will be further relevant to refer to the following observations of this Court in K. Sashidhar (supra): 57. ...Indubitably, the remedy of appeal including the width of jurisdiction of the appellate authority and the grounds of appeal, is a creature of statute. The provisions investing jurisdiction and authority in NCLT or NCLAT as noticed earlier, have not made the commercial decision exercised by CoC of not approving the resolution plan or rejecting the same, justiciable. This position is reinforced from the limited grounds specified for instituting an appeal that too against an order "approving a resolution plan" under Section 31. First, that the approved resolution plan is in contravention of the provisions of any law for the time being ....
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....ted judicial review, which is available, can in no circumstance trespass upon a business decision arrived at by the majority of CoC. 169. In the case of Maharashtra Seamless Limited (supra), NCLT had approved the plan of appellant therein with regard to CIRP of United Seamless Tubulaar (P) Ltd. In appeal, NCLAT directed, that the appellant therein should increase upfront payment to Rs. 597.54 crore to the "financial creditors", "operational creditors" and other creditors by paying an additional amount of Rs. 120.54 crore. NCLAT further directed, that in the event the "resolution applicant" failed to undertake the payment of additional amount of Rs. 120.54 crore in addition to Rs. 477 crore and deposit the said amount in escrow account within 30 days, the order of approval of the 'resolution plan' was to be treated to be set aside. While allowing the appeal and setting aside the directions of NCLAT, this Court observed thus: "30. The appellate authority has, in our opinion, proceeded on equitable perception rather than commercial wisdom. On the face of it, release of assets at a value 20% below its liquidation value arrived at by the valuers seems inequitable. Here....
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....ntain various provisions, viz., provision for payment of insolvency resolution process costs, provision for payment of debts of operational creditors, which shall not be less than the amount to be paid to such creditors in the event of liquidation of the Corporate Debtor under section 53; or the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in subsection (1) of section 53, whichever is higher. The resolution plan is also required to provide for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, which also shall not be less than the amount to be paid to such creditors in accordance with sub section (1) of section 53 in the event of a liquidation of the Corporate Debtor. Explanation 1 to clause (b) of sub section (2) of Section 30 of the I&B Code clarifies for the removal of doubts, that a distribution in accordance with the provisions of the said clause shall be fair and equitable to such creditors. The resolution plan is also required to provide for the management of the affairs of the Corporate Debtor after approv....