2021 (12) TMI 190 - Tri - Insolvency and Bankruptcy

Seeking direction to remove / release the lien on the said property of the Corporate Debtor - HELD THAT - Hon ble Supreme Court in the case of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. 2019 (11) TMI 731 - SUPREME COURT , where it was held that successful resolution Applicant cannot suddenly be faced with undecided claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution Applicant who successfully take over the business of the corporate debtor. The Respondents are directed to forthwith lift lien on property and file claim before Liquidator as Operational Creditor - application disposed off.

Summary

Issues:
1. Application under Section 60(5) of Insolvency and Bankruptcy Code, 2016 for relief against lien on property of Corporate Debtor.

Analysis:

Issue 1: Application under Section 60(5) of Insolvency and Bankruptcy Code, 2016 for relief against lien on property of Corporate Debtor

The application was moved by the Liquidator of the Corporate Debtor against the Deputy Commissioner of State Tax and another respondent under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The Liquidator sought various reliefs, including the removal of the lien on the property of the Corporate Debtor, filing of claims by the respondents, and other consequential reliefs. The Tribunal considered the background facts, noting the admission of the petition under Section 7 of the Code, appointment of the Interim Resolution Professional, constitution of the Committee of Creditors, and subsequent liquidation of the Corporate Debtor. The highest bidder at the e-auction sale had submitted a bid for the property, but a lien was marked by the respondents on the property. The Liquidator requested the removal of the lien to facilitate the transfer of the property smoothly. The Tribunal referred to relevant judgments, including the Supreme Court's decision in the Essar Steel case and the Ghanshyam Mishra case, emphasizing the binding nature of claims post-approval of a Resolution Plan. Based on these precedents, the Tribunal directed the respondents to lift the lien on the property and file claims as Operational Creditors. The Liquidator was instructed to examine the claims under Section 53 of the Code and issue reasoned orders accordingly. The Tribunal disposed of the application in light of the settled legal positions established by the Supreme Court in the mentioned cases.