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2020 (10) TMI 865 - Tri - Insolvency and BankruptcyApplication for condonation of delay in filing restoration application - issuance of appropriate directions to the Resolution Professional to ensure the payment of dues of Applicant as Secured Creditors as provided under the provisions of the Part II, Chapter II of the Insolvency Bankruptcy Code 2016 - HELD THAT - The dues of the Government, Central Government and/or State Government or any legal authority fall under the category of Operational Debt . That apart, the applicant is claiming that in view of the provision of section 48 of Gujarat Value Added Tax, 2003, he may be treated as Secured Creditor. This contention of the Applicant is also not maintainable in view of section 238 of the IBC. Any dues and services of the Government Departments are considered as Operational Creditor . Under such circumstances, even if, the Applications is/are restored by condoning the delay, the very purpose for which the IA has been filed is not going to succeed as they fall under the category of Operational Creditor as per the provisions of IBC. There are no merits in the application - application disposed off.
Issues:
Restoration of application and condonation of delay. Analysis: The Tribunal dealt with applications for the restoration of an application and condonation of delay. The original application, IA 469 of 2019, was dismissed for non-prosecution by the Adjudicating Authority. The Applicant, a State Tax Officer-2, sought restoration of IA 469 of 2019, which requested directions to ensure payment as a Secured Creditor under the Insolvency & Bankruptcy Code 2016. The delay in filing the restoration application was 25 days, attributed to administrative procedures. The main contention revolved around the Applicant claiming to be a Secured Creditor in a Corporate Insolvency Resolution Process (CIRP). The Tribunal delved into the definitions of "Operational Creditor," "Financial Creditor," and "Operational Debt" under the Code. It was established that dues of the Government, Central Government, or any legal authority fall under "Operational Debt." The Applicant's argument to be treated as a Secured Creditor under a specific state law was deemed not maintainable due to the overriding effect of the IBC under Section 238. Citing precedents, the Tribunal highlighted the Supreme Court's stance on the overriding effect of the IBC, emphasizing that any right of the Corporate Debtor under another law cannot impede the Code. The Court's observations in various cases underscored the classification of statutory dues and services of Government Departments as "Operational Creditor." Consequently, even if the applications were restored, the purpose would not succeed as the claims fell under the Operational Creditor category as per the IBC. Ultimately, the Tribunal found no merit in the application, dismissing it while granting the State Tax Officer-2 the liberty to assert their claim as an "Operational Creditor" before the Resolution Professional. The judgment elucidated the application's lack of success due to its classification as an Operational Creditor, aligning with the provisions of the Insolvency & Bankruptcy Code.
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