2023 (10) TMI 1344 - AT - Insolvency and Bankruptcy

Approval of Resolution Plan - Seeking out of turn hearing to record the approval of plan - HELD THAT - Clause 1(f) in Chapter X of the Resolution Plan states that all claims prior to the NCLT approval date of Governmental Authorities in relation to all taxes which the Appellant was liable to pay shall stand extinguished on the approval date. Clause 1(o) declares that any tax, duty and legal liability for the period prior to approval date will be waived and extinguished. That the instant Appeal filed in 2012 is a claim which existed prior to approval date and stands extinguished by virtue of Resolution Plan. The payment schedules described in the Resolution Plan have been completed. The dispute underlying in the above appeal stands settled under Resolution Plan and nothing survives. It was prayed that appeal may be heard out of turn to record the approval of Resolution Plan by NCLT and the appeal may be disposed accordingly. Taking note of the fact that the NCLT has approved the Resolution Plan in the insolvency proceedings in regard to the company, the Appeal does not survive any more - appeal dismissed.

Summary

Issues:
The judgment involves issues related to insolvency and bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC), 2016, specifically focusing on the approval and effects of a Resolution Plan.

Summary:
The company faced financial difficulties leading to a financial creditor filing an application under Sec 7 of IBC for debt recovery. NCLT Hyderabad initiated Corporate Insolvency Resolution Process (CIRP) under Sec 13 of IBC. A Resolution Plan was approved on 29.06.2019, extinguishing all debts and legal liabilities prior to the approval date. The Resolution Plan stated that all claims of Governmental Authorities for taxes would be extinguished. An appeal filed in 2012, existing before the approval date, was settled under the Resolution Plan. NCLT approved the Resolution Plan, making it binding on all stakeholders. The Tribunal dismissed the appeal as the Resolution Plan had been approved, rendering the appeal moot.

The NCLT approved the Resolution Plan, finding it compliant with IBC provisions and not in contravention of Sec 29A. The Plan was deemed binding on the Corporate Debtor, employees, creditors, Central Government, State Government, and other stakeholders involved. The NCLT's approval of the Resolution Plan led to the dismissal of the appeal, as the Plan had extinguished all debts and legal liabilities, resolving the underlying dispute.