2022 (8) TMI 179 - HC - Insolvency and Bankruptcy

Demand has been foisted on the petitioner, even though a resolution plan has received the approval of the National Company Law Tribunal, Delhi Bench - HELD THAT - The record shows, that a resolution plan concerning JSW Steel Ltd. was approved by the NCLT under Section 31 of the Code on 05.09.2019. 12.1. It appears that an appeal was carried to the National Company Law Appellate Tribunal NCLAT , which affirmed the resolution plan via order dated 17.02.2020 with slight modifications. In terms of the approved resolution plan, the creditors of JSW Steel Ltd. were paid on 26.03.2021 - it is clear that if we were to reprise the resolution plan, it would result in burdening the petitioner with unexpected claims, and thus derail it from its path to recovery. Petition allowed.

Summary

Issues:
Challenge to Order-in-Original regarding demand post-approval of resolution plan by NCLT, Maintainability of writ petition in light of alternate remedy, Extinction of demand post-approval of resolution plan, Applicability of relevant legal principles.

Analysis:
1. The writ petition challenges the Order-in-Original dated 27.07.2020, post-approval of the resolution plan by the NCLT, concerning a demand of Rs. 23.53 crores along with penalty and interest.

2. The petitioner contends that as the resolution plan is approved by the NCLT, the demand should stand extinguished under the Insolvency and Bankruptcy Code, 2016, citing the Supreme Court judgment in Ghanshyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., 2021 SCC OnLine SC 313.

3. The respondents argue for the availability of an alternate remedy through appeal, while the petitioner asserts that the issue is settled in their favor, thus negating the need for an alternate remedy.

4. The Court, relying on legal precedents, including Whirlpool Corporation v. Registrar of Trade Marks, upholds its plenary power under Article 226 of the Constitution to entertain the writ petition despite the availability of an alternate remedy.

5. The respondents fail to contest the merits of the matter, and the Court acknowledges that the demand stands extinguished post-approval of the resolution plan by the NCLT, as per the Ghanshyam Mishra judgment.

6. The timeline of events, including the issuance of public notice, show that the demand was subsisting before the resolution plan approval, and the respondents did not lodge their claim during the Corporate Insolvency Resolution Process.

7. The resolution plan concerning JSW Steel Ltd. was approved by the NCLT and NCLAT, and the creditors were paid, further solidifying the extinguishment of the demand post-approval.

8. Citing the Ghanshyam Mishra judgment, the Court rules in favor of the petitioner, quashing the impugned order dated 27.07.2020, and closing the pending application, with parties bearing their own costs.