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2022 (4) TMI 15 - HC - Insolvency and BankruptcyApproval of Resolution Plan - HELD THAT - This Court, after hearing learned counsel for the parties as well as perusing the record of the case alongwith the precedent laws cited at the Bar, is of the firm opinion that once the application under Section 7 of the Code of 2016 was admitted by the NCLAT at the instance of the Bank, and thereafter, the IRP was confirmed by the resolution professional in their meeting dated 28.05.2018 which was further affirmed by the NCLAT vide its order dated 14.11.2018, then only option left to the State was to contest the same. Thus, once the Hon ble Apex Court in on 19.11.2018 in Civil Appeal No.10998 of 2018 2018 (11) TMI 1608 - SUPREME COURT has categorically laid down the law that once a resolution plan is duly approved by the Adjudicating Authority under Sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and all the parties including the Corporate Debtor, employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders shall be bound down by such plan. The writ petitions are allowed.
Issues:
1. Challenge to fresh demand raised by impugned demand notice dated 28.03.2019. 2. Interpretation of the law regarding resolution plans under Section 31 of the Insolvency & Bankruptcy Code, 2016. 3. Dispute over payment of certain claims despite resolution plan approval. 4. Application of legal principles in light of relevant judgments. Issue 1: Challenge to Fresh Demand Notice: The petitioner, a subsidiary of UltraTech Cement Limited, contested a fresh demand notice dated 28.03.2019, claiming it was contrary to the approved resolution plan and the provisions of the Insolvency & Bankruptcy Code, 2016. The petitioner argued that the National Company Law Appellate Tribunal (NCLAT) had accepted the payment terms proposed in the resolution plan, making the new demand invalid. Issue 2: Interpretation of Section 31 of the Code: The petitioner relied on a Supreme Court judgment to argue that once a resolution plan is approved by the Adjudicating Authority under Section 31, all claims specified in the plan become binding and any other claims stand extinguished. This includes statutory dues, and no further proceedings can be initiated for such dues post-approval of the resolution plan. Issue 3: Dispute Over Payment of Claims: The respondents contended that despite the resolution plan approval, certain claims were under adjudication in another court, necessitating payment by the petitioner. They highlighted a distinction based on a Supreme Court judgment regarding contributions to District Mineral Funds by lease holders, emphasizing the obligation to pay with interest if contributions were delayed. Issue 4: Application of Legal Principles: The Court referred to the Apex Court's decision upholding the NCLAT's approval of the resolution plan, emphasizing that once a resolution plan is approved under Section 31, all parties, including the Corporate Debtor and various stakeholders, are bound by it. The Court reiterated the extinguishment of all dues, including statutory ones, not part of the resolution plan as per the law laid down by the Supreme Court. In the final judgment, the Court allowed the writ petitions, quashing the impugned demand orders, citing the binding nature of the resolution plan post-approval under Section 31. The Court emphasized that all dues, including statutory ones, not included in the plan would stand extinguished. The parties were advised to seek legal remedies if necessary, and all pending applications were disposed of accordingly.
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