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2020 (12) TMI 755 - Tri - Insolvency and BankruptcyPayment of licence fees to the Applicants for the CIRP period as CIRP costs - Individual claims of Applicant No.1 and Applicant No. 2 as financial creditors - whether the Applicants are entitled to payment of license fee, for the period between 15.01.2018 and 23.01.2019 and the quantum of the same on the basis of the IT returns filed before passing of the order? - HELD THAT - The contention of the applicants that it was impossible for them, to file the ITR by anticipating the requirement stated in the Hon ble NCLAT order and that the findings of the Appellate Tribunal cannot be held against the applicants as they have filed the ITRs within the last dates - that part of the order of Hon ble NCLAT has to be implemented by the respondents. There is no averment in the reply of any of the Respondents that the Hon ble NCLAT rejected the claim of the applicants regarding the payment of Licence fee. The only contention is that the applicants have not furnished the Income Tax Returns, prior to the order of Hon ble NCLAT. Due to Covid-19 Pandemic, the time for submission of IT Return was extended and the applicants have filed the IT Returns and produced the proof of submission. The contention of the respondents on this core is to be rejected partly. It is found from the chart submitted by the Respondent No.2- Resolution Professional that no amount is payable to Applicant No.1/ MIPL in respect of the factory premises since it was not used for CIRP as a going concern . This statement has not been rebutted by the applicants in their rejoinder. Therefore, this Tribunal is of the view that the respondent- Resolution Applicant is bound only to pay the licence fee claimed by the Applicant No.2. Since the 2nd Applicant- M/s Grove Limited have not refunded the security deposit of ₹ 50 Lakhs, the 3rd respondent is bound to pay the licence fee deducting the amounts of ₹ 50 Lakhs with the interest, if any. Application allowed in part.
Issues Involved:
1. Payment of license fee during the Corporate Insolvency Resolution Process (CIRP). 2. Payment of GST on the license fee. 3. Payment of various charges during the CIRP period. 4. Proportion of license fee and outstanding loans at par with other creditors. 5. Release of corporate guarantees executed favoring the corporate debtor. 6. Validity and enforceability of claims based on Income Tax Returns (ITR). 7. Allegations of preferential transactions. Issue-wise Detailed Analysis: 1. Payment of License Fee During CIRP: The applicants sought the payment of license fees during the CIRP period as CIRP costs. The Tribunal referenced the Hon’ble NCLAT order, which allowed the inclusion of license fees in CIRP costs if the business was running on a "going concern basis" and restricted to the Income Tax Returns filed. The Tribunal found that the factory premises of Applicant No.1 (MIPL) were not used for CIRP as a "going concern," thus no license fee was payable to MIPL. However, for Applicant No.2 (Grove Limited), since the premises were used, the Tribunal directed the payment of the license fee amounting to ?85,66,666. 2. Payment of GST on the License Fee: The Tribunal directed the payment of GST at 18% on the license fee payable to Applicant No.2, amounting to ?15,42,000. 3. Payment of Various Charges During CIRP Period: The Tribunal did not specifically address the payment of power charges, water charges, and other maintenance charges separately. The primary focus was on the license fee and GST. 4. Proportion of License Fee and Outstanding Loans at Par with Other Creditors: The claims for proportionate license fee and outstanding loans by the applicants were deemed frivolous and non-maintainable. The Tribunal upheld that such claims were either settled or extinguished under the Resolution Plan, as per the IB Code, 2016. 5. Release of Corporate Guarantees: The Tribunal did not specifically address the release of corporate guarantees in its order. The focus remained on the payment of the license fee and GST. 6. Validity and Enforceability of Claims Based on Income Tax Returns (ITR): The Tribunal noted that the applicants had filed their ITRs within the extended timelines due to the Covid-19 pandemic. Hence, the Tribunal rejected the respondents' contention that the applicants had not furnished ITRs prior to the NCLAT order. The Tribunal found that the applicants' claims based on the ITRs were valid. 7. Allegations of Preferential Transactions: The Tribunal acknowledged the pending application under Section 43 of the IB Code, 2016, seeking a declaration that payments made to the applicants amounted to preferential transactions. However, this issue was not resolved within the scope of the present order. Findings and Order: The Tribunal concluded that the respondents were bound to pay the license fee to Applicant No.2 (Grove Limited) and allowed the deduction of the security deposit with interest from the payable amount. The Tribunal directed the Respondent No.3 (Resolution Applicant) to make the payments within four weeks from the date of the order. Implementation: The Tribunal ordered the implementation of the payment of ?85,66,666 as the license fee and ?15,42,000 as GST to Applicant No.2 within four weeks, allowing the adjustment of the security deposit with interest. Date of Order: 4th December 2020.
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