2021 (8) TMI 390 - Tri - Insolvency and Bankruptcy

Seeking extinguishment of all the disputed and undisputed claims against the Applicant relating to the period prior to the effective date i.e. 20th September 2018 in terms of the approved Resolution Plan - HELD THAT - Considering the papers/documents made available before this Bench and the observations made and the Judgment of the Hon'ble Supreme Court in the cases of the Committee of Creditors of Essar Steels India Ltd. Vs. Satish Kumar Gupta and others 2019 (11) TMI 731 - SUPREME COURT and Ghanashyam Mishra and Sons Private Limited through the Authorised Signatory Vs. Edelweiss Asset Reconstruction Company Limited 2021 (4) TMI 613 - SUPREME COURT , the prayer made in the present IA No. 17 of 2021 is accepted that the demand of the Respondents for ₹ 13,74,80,376.00 stands extinguished as the Law is settled that once the Resolution Plan approved by the Adjudicating Authority becomes binding on all stakeholders and all claims not dealt stand extinguished. The prayer made by the Petitioner for refund of ₹ 4,23,15,716.00 along with interest to them for the period AY 1982-83 to 1992-1993 is hereby rejected - Application disposed off.

Issues:
1. Application under Section 7 of Insolvency and Bankruptcy Code, 2016 filed by Financial Creditor.
2. Failure of Respondent to file claim during Corporate Insolvency Resolution Process.
3. Submission and approval of Resolution Plan by BRS Ventures Limited.
4. Communication regarding extinguishment of claims prior to effective date.
5. Failure of Respondent to respond to communication.
6. Assessment orders by Respondent No. 2 under the Income Tax Act.
7. Filing of Writ petitions against assessment orders in Gauhati High Court.
8. No claim filed by Respondents before the Tribunal.
9. Request for extinguishing Agriculture income Tax demand.
10. Prayer for necessary orders and directions by the Tribunal.
11. Reliefs sought by the Applicant.
12. Legal arguments citing relevant Supreme Court judgments.
13. Observations made by the Tribunal.
14. Decision and directions of the Tribunal on the issues raised.

Analysis:

1. The case involved an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by a Financial Creditor against the Applicant, leading to the initiation of Corporate Insolvency Resolution Process (CIRP) by the Tribunal. The Tribunal admitted the application, appointed an Interim Resolution Professional (IRP), and later replaced the IRP with a Resolution Professional to manage the process.

2. During the CIRP, the Respondent failed to file its claim with the IRP, and the Resolution Plan submitted by BRS Ventures Limited was approved by the Committee of Creditors and the Tribunal. The Resolution Plan explicitly stated the extinguishment of claims not included in the plan prior to the effective date.

3. Despite communication from the Applicant regarding the approval of the Resolution Plan and the request to extinguish claims, the Respondent did not respond. The Applicant also highlighted assessment orders passed by Respondent No. 2 under the Income Tax Act, leading to the filing of Writ petitions in the Gauhati High Court.

4. The Applicant sought the extinguishment of Agriculture income Tax demand and requested necessary orders and directions from the Tribunal. Citing relevant legal arguments and Supreme Court judgments, the Applicant emphasized the binding nature of approved Resolution Plans on all stakeholders, leading to the extinguishment of claims not addressed in the plan.

5. The Tribunal, considering the documents before it and the legal precedents cited, accepted the extinguishment of the Respondents' demand but rejected the refund request by the Petitioner. The Tribunal disposed of the application with specific observations and directions, in line with the settled legal principles regarding Resolution Plans under the Insolvency and Bankruptcy Code.

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