9911796707
TMI Blog2021 (2) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice is caused to the Applicant not only in carrying on, running and operating the said sugar plant, payment of wages and salaries to workers and labourers, procurement of sugarcane from the farmers but also implementations and giving effect to the approved Resolution Plan. This non-implementation of the Resolution Plan is also causing great prejudice to the poor farmers and therefore, keeping their interest in view along with the interest of the Corporate Debtor Company and according to the provisions of law, this application needs to be allowed. Once the Resolution Plan is approved under section 31 of the Code, all the assets and benefits of the contracts of the Corporate Debtor stands unconditionally transferred and assigned and vested in the Successful Resolution Applicant free from all encumbrances. Further, all persons including Central and State Government as well as the Local Authorities are bound by the said Order. However, Respondent No. 1 despite being bound by the said Order dated 11-11-2019 did not recall his orders dated 26-4-2018 and 18-9-2019 issuing Revenue Recovery Certificates (RRCs) of the sum of ₹ 4783.98 lakhs and ₹ 138.92 lakhs aggregating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. This is an Interlocutory Application filed by Shri. Dutt India Pvt. Ltd. (hereinafter called the Applicant ) against the Office of the Sugar Commissioner, Maharashtra State (hereinafter called as the respondent ). This application has been filed under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (hereinafter called as the Code ). The applicant herein prays for various directions to be given to the Sugar Commissioner, Maharashtra State, to the Collector/Sub-Divisional Officer/Gram Panchayat/Talathi of Sakharwadi for removing the entry of Government of Maharashtra on the 7/12 extracts of New Phaltan Sugar Works Limited existing on GAT Nos. 62/1, 62/2, 62/3A, 62/4, 62/5A, 62/8A, 65/2, 69, 70, 71/1, 74 (11Gat Nos.) 2. The learned counsel appearing for the applicant mentioned the facts of the case. He initiated with stating about this Company Petition bearing number 2956 of 2018 was filed by one Cosmos Co-Operative Bank (hereinafter called as the original petitioner ) who was the financial creditor of M/s New Phaltan Sugar Works Limited (hereinafter referred to as the Corporate Debtor ). This petition was filed under section 7 of the Code and was admitted by thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Fifty Nine Lakhs Forty Nine Thousand Eight Hundred and Eighty Eight Only) in the following manner i.e. Sl. No. Particulars Amount (Rs.) 1 Cash Component 10,59,49,888 2 Cash Component to be paid within 3 months after the end of year 1. 15,00,00,000 Total 25,59,49,888 6. The applicant further mentioned that he was then ordered by this Tribunal to furnish a Bank Guarantee in the sum of ₹ 5,00,00,000/- in order to secure the amount due and payable to the farmers in the manner mentioned above and the Applicant agreed for the Bank Guarantee to be kept alive and valid till such time the entire amount agreed to be paid towards the farmers' dues were paid. A copy of the said affidavit dated 5-11-2019 and Bank Guarantee dated 5-11-2019 are hereto annexed with the copy of this application and marked as Exhibits D-1 and D-2 . 7. The counsel further mentioned that during the course of the hearing of the said Misc. Application No. 3271 of 2019, the Farm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount paid till date by the Applicants in discharge of their obligation under the said Order dated 11-11-2019 is more particularly set out hereinunder: Sl. No Particulars Settlement Amount Paid as on date 1. CIRP Cost ₹ 1,00,00,000 ₹ 1,37,15,873 2. Employees and Workmen Dues ₹ 2,00,93,325 ₹ 4,40,77,899 ₹ 2,19,50,903 ₹ 4,40,77,899 3. Financial Creditors ₹ 30,92,52,619 ₹ 30,92,52,619 4. Operational Creditors ₹ 54,65,628 ₹ 31,89,400 5. Statutory Dues ₹ 22,87,902 ₹ 22,87,902 6. Farmers ₹ 25,59,49,888 ₹ 20,70,61,088 TOTAL ₹ 68,61,06,870 ₹ 61,52,51,55 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant has annexed a copy of the 7/12 extract evidencing Registration of charge in favour of the State Government at Exhibit I . 12. The Applicant mentioned that after passing the said Order dated 11-11-2019, it requested the Office of the Sub-Divisional Officer, Phlatan and Collector, Satara to remove and/or delete the charge recorded in the land revenue records in respect of the immovable property which belonged to the Company in Liquidation and which now stands vested and transferred in favour of the successful Resolution Applicant in accordance with and furtherance of their approved Resolution Plan. The Office of the Sub-Divisional Officer Phaltan, through a letter dated 1-6-2020, a copy of which is annexed at Exhibit J , addressed to the Office of the Collector, Satara after recording the entire facts sought appropriate orders and directions for deletion and/or removal of the charge recorded in the land revenue records in respect of the immoveable property which now stands vested and transferred in favour of the successful Resolution Applicant. 13. The Office of the Collector, Satara upon receipt of the said letter from the Office of the Sub-Divisional Officer Ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Tax, Excise etc. including farmers' dues fall under the category of Operational Creditors. Also, all the assets, immoveable and moveable, which belonged to and/or owned by the Company in Liquidation now stands transferred and vested in the Applicant free of all encumbrances and charges. Further, all the secured and/or financial creditors in whose favour the immoveable and moveable property of the company in Liquidation had been mortgaged and/or hypothecated have released their security and/or claim on the same in favour of the Applicants. The said Secured and/or Financial Creditors upon receipt of the amount agreed to be paid to them by the Applicants in accordance with the Resolution Plan have released all their rights, claims or lien over the immoveable and moveable property of the Company in Liquidation in favour of the Applicant. Therefore, the Applicant mentioned that in these circumstances, the Respondent by not passing appropriate Orders and directions for withdrawal and/or quashing and/or setting aside of the R.R.C.is disobeying and/or not adhering and/or complying with the impugned said dated 11-11-2019 and this act on the part of the Respondent in not taking steps ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egating to 2,60,459 M.Ts. and the total sugar produced was 2,99,424 Quintals. Further, the Applicants have made full payment of farmer FRP (Fair and Remunerative Price) for the current season. at the rate of ₹ 2500 per tonne of cane crushed which amounts to more than ₹ 65,00,00,000/-. 19. The Applicant mentioned the following difficulties faced by it due to the act of the Respondent: i. The Applicant despite sanction letter issued by Banks and Financial Institution is unable to raise finance from Banks and financial institution against the security of the said immoveable property as the said property in the land revenue records continues to be shown as encumbered and/or charged in favour of the Respondent for non-payment of farmers' dues. A copy of the said letter by the State Bank of India is annexed at Exhibit N . ii. In furtherance of the said Order dated 11-11-2019 approving the Applicants' Resolution Plan, the Corporate Debtor/Company in Liquidation stands merged with the Applicant. However, on account of non-withdrawal of the R.R.C., the said property continues to be shown as belonging to the Corporate Debtor which now has become non-existent hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational creditors including amount due to either the Central and State Government by way of taxes, cess, revenue receipts of any nature or amount due to the employees, workers and labour are all categorised as Operational Creditors. Therefore the claim of the Respondent being in the nature of a revenue receipts is a claim made by the Operational Creditor. Thus, the Respondent cannot claim and/or is entitled to claim a right higher than what is entitled to under the provisions of I.B.C., 2016. It is therefore in the interest of justice, equity and good conscious, that the Respondent viz Sugar Commissioner, Maharashtra State be ordered and directed to forthwith intimate to the Collector/Sub-Divisional Officer/Gram Panchayat/Talati of Sakharwadi to forthwith remove the entry of the Government of Maharashtra on the 7/12 Extracts of New Phaltan Sugar Works Limited for the aforesaid GAT Nos. In the above circumstances, the Applicants most respectfully pray this Tribunal to direct for removal of the attachment over the assets of the Corporate Debtor and to cancel the RRC charge created on the assets of the Applicant on immediate basis. 22. The applicant therefore, by this Application p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Corporate Debtor are transferred to the applicant herein. It is to be noted that as per the RRC orders, arrears of FRP to be paid to farmers amounts to ₹ 4925.80 lakhs but the impugned order dated 11-11-2019 has sanctioned only ₹ 2559.50 lakhs as dues of farmers and amount of ₹ 236641.41 lakh is still to be paid to farmers as arrears of FRP which the farmers are demanding and requesting the Respondent. 25. The Respondent further mentioned that the Corporate Debtor has challenged the order before the Hon'ble High Court of Mumbai for implementation of RRC. Both the Appeal as well as Writ Petition are still pending. In view of this pendancy and the remaining amount of FRP arrears of ₹ 2366.41, the Respondent is of the view that this Tribunal has no jurisdiction to entertain the said application as there is an alternative remedy available. 26. Also, the applicant by its letter dated 20-3-2020, 25-3-2020 and 05-6-2020 had requested the Respondent to cancel the RRC and to remove the charge created upon the properties of the Corporate Debtor. Also, the Collector, Satara by its letter dated 4-6-2020 requested the Respondent to take necessary action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of law, this application needs to be allowed. In view of the above and with the above observations, this Interlocutory Application bearing number 1055 of 2020 is allowed and the Sugar Commissioner is hereby directed to remove the entry of the government of Maharashtra on the 7/12 extracts of New Phaltan Sugar Works Limited. We are of the opinion that once the Resolution Plan is approved under section 31 of the Code, all the assets and benefits of the contracts of the Corporate Debtor stands unconditionally transferred and assigned and vested in the Successful Resolution Applicant free from all encumbrances. Further, all persons including Central and State Government as well as the Local Authorities are bound by the said Order. However, Respondent No. 1 despite being bound by the said Order dated 11-11-2019 did not recall his orders dated 26-4-2018 and 18-9-2019 issuing Revenue Recovery Certificates (RRCs) of the sum of ₹ 4783.98 lakhs and ₹ 138.92 lakhs aggregating to ₹ 4925.80 lakhs creating a charge on the immoveable property of the Corporate Debtor in the land revenue records. The Respondent has mentioned that this Tribunal has no jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly act as an authority to recover the amount specified in the certificate only as an executing authority for the RC issued. These monies are owned neither to the Commissioner of Sugar nor to the State Government but to the farmers. He merely has to act as an agent for the aforesaid recovery. Also, as far as the confiscation of the properties is concerned, the applicant has immunity under section 32A which was inserted vide the Insolvency and Bankruptcy Code (Amendment) Act, 2020, from the fraudulent acts committed by the erstwhile promoters of the Corporate Debtor prior to the initiation of CIRP. It was argued in the matter of JWS Steel Ltd. v. Mahender Kumar Khandelwal . [Company Appeal (AT) (Insolvency) No. 957 of 2019, dated 17-2-2020] for the CIRP of Bhushan Power Steel Ltd. 7. Resolution Plan submitted by the interested Resolution Applicants are duly examined and validated by the Resolution Professional and the Committee of Creditors ( CoC ). Once the Resolution Plan is voted upon and approved by the CoC, it is submitted to the Ld. Adjudicating Authority for its approval. The Ld. Adjudicating Authority after hearing the objections, if any, and being satisfied that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this matter held the following: 7. Taking into consideration the fact that the stand taken by the 'Directorate of Enforcement', is contrary to the stand taken by the Government of India, the order of attachment dated 10th October, 2019 passed by the Deputy Director, 'Directorate of Enforcement' with regard to part property of the 'Corporate Debtor' (Bhushan Power Steel Limited) is stayed. The Director, Deputy Director and other officers of 'Directorate of Enforcement' are prohibited from attachment of any property of the 'Corporate Debtor' (Bhushan Power and Steel Limited) without prior approval of this Appellate Tribunal. The property already attached by them be released in favour of the 'Resolution Professional' immediately. Further, to ensure that the 'resolution plan' is not given effect before deciding the issue, we stay the impugned order dated 5th September, 2019, so far it relates to the payment of the creditors. Also, in the matter of Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 143 SCL 625 the Hon'ble Supreme Court of India held that: ' 54. On reading its provisions, the moment init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Also, Section 238 of the Code reads as under: Sec. 238. Provisions of this Code to override other laws.- The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. It is clear that the later non-obstante clause of the Parliamentary enactment will also prevail over the limited Vnon-obstante clause contained in Section 4 of the Maharashtra Act. For these reasons, we are of the view that the Maharashtra Act cannot stand in the way of the corporate insolvency resolution process under the Code.' From the above, it is clear that Section 238 of the Code is an overriding provision and has an overriding effect on all the other laws. The company is already into CIRP and therefore, no question as to the jurisdiction of this Bench to hear and decide this matter arise. We believe that the amount specified in the certificate has already been paid directly to the farmers in accordance and in furtherance of the Order of this Tribunal approving the Resolution Plan. Therefore, there appears no apparent reason to keep these prop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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