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2024 (10) TMI 684 - AT - IBCFailure to take into cognizance of the claims filed by it in respect of the outstanding income tax demands raised on the Corporate Debtor while approving the resolution plan - timeliness in the completion of assessment proceedings by the Appellant - admission of belated claim after the approval of the resolution plan. Whether the claim was filed by the Appellant within time and, if so, how the claim was treated by the RP in the CIRP of the Corporate Debtor Company? - HELD THAT - No determinative or crystallised amount has been indicated by the Appellant as their claim amount. Mere intimation by the Appellant to the RP of heavy income-tax demand on the Corporate Debtor cannot be construed in any manner to be equated with filing a claim before the RP. Apart from not indicating any firm claim amount, the Appellant has mentioned in Form B the multiple litigations surrounding the said claims. This is indicative of the nebulous and indeterminate claim amount in Form B. The Appellant was required to submit the crystallised claim within the stipulated time frame in terms of CIRP Regulations to the RP for collation and verification of the same for the same to be duly reflected in the IM. The Appellant in the present facts of the case is trying to make recovery of claims which it is not entitled to recover because of inaction of their part to file their claim on time. On this count, in the absence of the Appellant having filed firm and determinate claims on time, there are no reason to hold the conduct of the RP to be faulty or questionable. It is pertinent to note that the CoC had already approved the Resolution Plan by then. It is also clear from material available on record that the Appellant had crystallised their tax demands for A.Y. 2013-14 to A.Y. 2019-20 by passing assessment orders dated 29.06.2022 to 01.07.2022. This leaves no doubt in our minds that the demand was raised by the Appellant on the Corporate Debtor Company after the CoC and the Adjudicating Authority had already approved the resolution plan on 20.06.2022. Whether such belated claim can be admitted after the approval of the resolution plan? - HELD THAT - The Adjudicating Authority has concluded that once the Resolution Plan was duly approved by the CoC, the claim filed with the RP stands frozen. Since Appellant had failed to file its claim with the RP before the Resolution Plan was approved by the CoC, their claim stands extinguished. The Appellant having failed to file its claim on time before the RP, it cannot be allowed to saddle the SRA with the liability of its claim which was never filed on time. There is a concomitant need to impart finality to the resolution process by protecting a successful resolution applicant from unnecessary litigation arising out of undecided claims. No proceeding can be initiated or continued in respect of a claim which is not part of the resolution plan or was not preferred at the relevant time. No fresh claims can be lodged or enforced against the SRA after the approval of a resolution plan for when any sudden and fresh claim pops out in respect of the Corporate Debtor, the very calculations on the basis of which the SRA has submitted its plans, would go haywire and the plan would be unworkable. In the present case there is no dispute with the facts that the claims made by the Appellant in pursuance to the assessment proceedings were finalised after the approval of the resolution plan by the CoC and the Adjudicating Authority. Allowing the claim at this belated stage would unleash the hydra-headed monster of undecided claims on the SRA and would have the effect of setting the clock back causing further delay in the CIRP of the Corporate Debtor. Thus, no error was committed by the Adjudicating Authority in approving the resolution plan - appeal dismsised.
Issues Involved:
1. Timeliness and treatment of the claim filed by the Appellant. 2. Consideration of statutory demands in the resolution plan. 3. Admissibility of belated claims after the approval of the resolution plan. 4. Compliance with the statutory framework and objectives of the Insolvency and Bankruptcy Code (IBC). Detailed Analysis: 1. Timeliness and Treatment of the Claim Filed by the Appellant: The primary issue was whether the claim by the Appellant, the Assistant Commissioner of Income Tax, was filed within the stipulated time and how it was treated during the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor, M/s Diamond Power Infrastructure Ltd. The Appellant filed its claim in Form B on 08.11.2019, indicating a potential heavy income tax liability. However, the claim was not crystallized, and no specific amount was mentioned, leading to its exclusion from the Information Memorandum (IM). The Resolution Professional (RP) published a list of creditors, including the Appellant, but could not include the claim in the resolution plan due to its indeterminate nature. The Tribunal noted that the Appellant failed to submit a firm and determinate claim within the time frame prescribed by the CIRP Regulations, which was crucial for its inclusion in the resolution plan. 2. Consideration of Statutory Demands in the Resolution Plan: The Appellant argued that the resolution plan ignored statutory demands payable to the government, which should have been considered under Section 30(2) of the IBC. The Tribunal observed that the resolution plan, approved by the Committee of Creditors (CoC) with the requisite majority, included provisions for payment towards CIRP costs, workmen, employees, and operational creditors. The Adjudicating Authority had examined the plan in light of Section 30(2) and found it compliant. The Tribunal emphasized that statutory demands not filed within the stipulated time cannot be included post-approval of the resolution plan, as it would disrupt the CIRP timelines and the principle of a "clean slate." 3. Admissibility of Belated Claims After the Approval of the Resolution Plan: The Tribunal addressed whether belated claims could be admitted after the resolution plan's approval. The Appellant's claims, finalized after the plan's approval, were deemed inadmissible. The Tribunal reiterated the "clean slate" principle, emphasizing that once a resolution plan is approved, all claims not part of the plan are extinguished. This principle is supported by the Supreme Court's judgments, which highlight the necessity of finality in the resolution process to avoid reopening settled matters and imposing unforeseen liabilities on the Successful Resolution Applicant (SRA). 4. Compliance with the Statutory Framework and Objectives of the IBC: The Tribunal analyzed the statutory framework of the IBC, which mandates a time-bound insolvency resolution process. The RP is required to invite claims, collate them, and include them in the IM for consideration by resolution applicants and the CoC. The Tribunal noted that the Appellant's failure to file a crystallized claim on time precluded its inclusion in the resolution plan. The Tribunal cited Supreme Court judgments affirming that post-approval claims cannot be entertained, as it would undermine the IBC's objective of reviving the Corporate Debtor as a going concern. In conclusion, the Tribunal found no error in the Adjudicating Authority's approval of the resolution plan, dismissing the appeal and upholding the principle that all claims must be submitted within the stipulated timeframe to ensure a smooth and effective CIRP.
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