2023 (10) TMI 725 - AT - Central Excise

Recovery of dues - instant appeal filed in 2011 is a claim which existed prior to approval date and stands extinguished by virtue of Resolution Plan - HELD THAT - Taking note of the fact that the NCLT has approved the resolution plan in the insolvency proceedings in regard to the company, the appeal does not survive any more. The appeal is disposed of accordingly as dismissed.

Summary

Issues involved:
The issues involved in the judgment are the initiation of Corporate Insolvency Resolution Process (CIRP) under section 13 of the Insolvency and Bankruptcy Code, 2016, approval of Resolution Plan by National Company Law Tribunal (NCLT) under section 30(6) of IBC, extinguishment of debts and claims by Resolution Plan, and the disposal of appeal based on the approval of Resolution Plan by NCLT.

Initiation of CIRP under IBC:
The appellant company faced financial difficulties leading to an application filed by a financial creditor under section 7 of the Insolvency and Bankruptcy Code, 2016. The NCLT issued an order on 4.10.2019 initiating Corporate Insolvency Resolution Process (CIRP) under section 13 of IBC. A Resolution Plan was floated, approved by the Committee of Creditors, and submitted before NCLT as required under section 30(6) of IBC. The Resolution Plan was approved by NCLT on 17.10.2019, making it effective from that date as per the NCLT order.

Extinguishment of Debts and Claims by Resolution Plan:
The Resolution Plan stipulated that all debts of the company would be settled upon compliance with payment schedules. Clause 7.4 of Chapter IV and clauses in Chapter X of the Resolution Plan declared that all proceedings against the company and claims of governmental authorities for taxes prior to the NCLT approval date would stand extinguished. The Resolution Plan waived and extinguished any tax, duty, or legal liability for the period before the approval date. The appellant's appeal, filed in 2011, was considered a claim existing prior to the approval date and was extinguished by the Resolution Plan. Payment schedules outlined in the Resolution Plan were completed, settling the dispute underlying the appeal.

Disposal of Appeal based on Resolution Plan Approval:
The NCLT approved the Resolution Plan in insolvency proceedings concerning the company, leading to the conclusion that the appeal no longer had merit. As a result, the appeal was dismissed, considering that it did not survive after the approval of the Resolution Plan by NCLT.