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TMI Blog2019 (12) TMI 1490X X X X Extracts X X X X X X X X Extracts X X X X ..... t covered by any of the grounds mentioned in Section 61(3) and this Appellate Tribunal cannot decide the question of fact relating to whether it is a Secured Creditor or Unsecured Creditor , the impugned order need not be interfered with. Amount of interest to be included as on Insolvency Commencement Date, is reduced without any explanation - HELD THAT:- The Committee of Creditors has made the distribution in terms of Section 30(4), this Appellate Tribunal has no jurisdiction to question the distribution so made - Admittedly, the Appellant- Virag Enterprise has been provided the amount more than the liquidation value, therefore, it cannot allege that the plan is violative of Section 30(2)(b) of the I B Code . If the Appellant does not accept the amount within the time frame, as proposed, in such case, it will not be entitled to receive any amount as the Appellant is not a Secured Creditor , it may not receive 10% - This Appellate Tribunal cannot sit in an appeal over such decision of the Committee of Creditors which approved the plan with more than 77.79% of the voting shares looking into the viability, feasibility and other factors prescribed by the Insolvency and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishti Kapoor, Ms. Priyanka Anand, Mr. Sanjay Bhatt, Mr. N. Ramachandran, Advocates and Ms. Kiran Sharma, C.S For the Respondent : Mr. M.S Vishnu Sankar, Advocate Mr. David Rao, Advocate for R-2 and Mr. Sriram P. Advocate for R-4., Ms. Shilpi Chowdhary and Mr. Jasdeep Dhillon, Advocates for Resolution Applicant ORDER SUDHANSU JYOTI MUKHOPADHAYA, J. In the Corporate Insolvency Resolution Process of Rainbow Papers Limited - ( Corporate Debtor ), the Resolution Professional filed application under Section 30(6) r/w Section 31 of the Insolvency and Bankruptcy Code, 2016 ( I B Code for short) seeking approval of the Resolution Plan submitted by Kushal Limited . 2. In the said Corporate Insolvency Resolution Process , Tourism Finance Corporation of India Limited ( Financial Creditor ) moved Interlocutory Application No. 273 of 2018 alleging that the Tourism Finance Corporation of India Limited (one of the Appellants herein) has been wrongly categorized as Unsecured Financial Creditor . 3. Another Interlocutory Application No. 337 of 2018 was filed by Virag Enterprise , an Operational Creditor (Appellant herein) alleging wrong distribution and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsecured Financial Creditor . 9. According to the Appellant, the Appellant was entitled to receive 38.27% of admitted claim with 19.14% amount as cash and the balance in the form of 5.22% debentures and 13.92% shares of the Corporate Debtor to be paid over 18 months; as Unsecured Financial Creditor was being offered 35% of admitted claim with only 10% in cash to be paid in 5 installments starting at the end of 3rd year and 25% as share warrants thus causing grave loss and prejudice to the Appellant also discriminating among the same class of Secured Financial Creditors . 10. It was submitted that the action of the Resolution Plan and the Committee of Creditors which convened its meeting on 4th June, 2018 is against the provision of Section 30(4) of the I B Code . 11. It was further submitted that the Resolution Professional can only collate the claim but it has no jurisdiction to decide or adjudicate upon the nature and status of claim or debt. 12. The Resolution Professional has raised preliminary objections about the maintainability of the appeal preferred by Tourism Finance Corporation of India Limited . 13. It was submitted by the Resolution Profe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process costs have not been provided for repayment in priority to all other debts; or (v) the resolution plan does not comply with any other criteria specified by the Board. 17. As the case of the Appellant- Tourism Finance Corporation of India Limited was not covered by any of the grounds mentioned in Section 61(3) and this Appellate Tribunal cannot decide the question of fact relating to whether it is a Secured Creditor or Unsecured Creditor , we are not inclined to interfere with the impugned order dated 27th February, 2019. The appeal is dismissed. Case of Appellant- Virag Enterprise 18. The case of the Appellant- Virag Enterprise is that the proof of the claim for ₹ 41,01,098/- was provided to the Resolution Professional along with the Affidavit dated 29th September, 2017 with all the relevant documents. The total amount of the claim included interest as on the Insolvency Commencement Date. However, the Resolution Professional reduced the claim to ₹ 29,38,689/- without giving any explanation. 19. It was submitted that as per the Resolution Plan , the Appellant- Operational Creditor will get cash payment of the 10% of the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itors which approved the plan with more than 77.79% of the voting shares looking into the viability, feasibility and other factors prescribed by the Insolvency and Bankruptcy Board of India. 28. For the reasons aforesaid, we are not inclined to interfere with the impugned order dated 27th February, 2019. The appeal is dismissed. Case of the Appellant- State Tax Officer- (1) 29. The case of the Appellant- Sales Tax Officer- (1) , Kadi, Dist. Mehsana, Gujarat is that the demand of ₹ 47,35,72,314/- towards Value Added Tax/ Central Sales Tax due from the Corporate Debtor by Demand Notice in Form 305 under the Gujarat Value Added Tax, 2003, and Demand Notice in Form 8(B) under the Central Sales Tax Act, 1956 for the years 2012-13 to 2015-16 and as per return filed by the Dealer, the Corporate Debtor for the period 1st March, 2016 to 30th June, 2016. 30. After Demand Notice, the matter was challenged and remained pending before the Gujarat Value Added Tax Tribunal at Ahmedabad. In the meantime, by order dated 12th September, 2017, the Adjudicating Authority declared Moratorium under Section 13(1) (a) and Section 14 of the I B Code since it has the overri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not fall within the meaning of Secured Creditor as defined under Section 3(30) read with Section 3(31) of the I B Code . 37. Section 48 of the Gujarat Value Added Tax Act, 2003 is under: 48. Notwithstanding anything to the contrary contained in any law for the time being in force, any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall be a first charge on the property of such dealer, or as the case may be, such person. 38. In view of Statement of Objects and Reasons of the I B Code read with Section 53 of the I B Code , the Government cannot claim first charge over the property of the Corporate Debtor . Section 48 cannot prevail over Section 53. Therefore, the Appellant- State Tax Officer- (1) do not come within the meaning of Secured Creditor as defined under Section 3(30) read with Section 3(31) of the I B Code . 39. Further, as Sales Tax Department filed its claim at belated stage after the plan had been approved by the Committee of Creditors , the Resolution Professional had no jurisdiction to entertain the same and rightly not entertained. We find no m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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