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TMI Blog2019 (12) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT In the 'Corporate Insolvency Resolution Process' of 'Vardhman Industries Limited'- ('Corporate Debtor'), the Appellant- 'JSW Steel Limited' has become 'Successful Resolution Applicant'. The 'Resolution Plan' submitted by the Appellant was approved by the 'Committee of Creditors' by 100% voting shares on 10th August, 2018. 2. When the matter was placed before the Adjudicating Authority (National Company Law Tribunal), Bench-III, New Delhi, the Adjudicating Authority by order dated 19th December, 2018 as clarified vide order dated 16th April, 2019, having found the plan in compliance with the provisions of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short) particularly Section 30(2), approved the plan with two conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws: "79. Carry forward and set off of losses in case of certain companies.─ Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place in a previous year,─ (a) in the case of a company not being a company in which the public are substantially interested and other than a company referred to in clause (b), no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, unless on the last day of the previous year, the shares of the company carrying not less than fifty-one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one percent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing contained in this section shall apply to a company where a change in the shareholding takes place in a previous year pursuant to a resolution plan approved under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner.]" 8. However, in view of the modification of the plan as proposed by the 'Resolution Applicant' (Appellant herein), we are not deliberating such issue on merit. 9. With regard to 'right to receivables', the Adjudicating Authority has directed that any amount recovered by the 'Corporate Debtor' due from any third party which has been written off as bad debts or which stands in the books but has not been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccessful Resolution Applicant' and the Income Tax Department will be guided by the Income Tax Act, 1961 and the Rules and Regulations framed thereunder. If the 'Successful Resolution Applicant' is entitled to 'carry forward losses' under Section 79 of the Income Tax Act, it may claim such benefit before the appropriate Authority, who will pass appropriate order in accordance with Section 79 of the Income Tax Act, 1961 and the Rules and Regulations framed thereunder. 13. As regards the 'subsidiaries', 'associate companies' and 'joint ventures' of the 'Corporate Debtor' are concerned, if any of them had any privilege or claim or assets to which they are entitled from the 'Corporate Debtor' prior to approval of the 'Resolution Plan', we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de on this count." 15. From the decision of the Hon'ble Supreme Court in "Committee of Creditors of Essar Steel India Limited Through Authorised Signatory" (Supra), it is clear that a successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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