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TMI Blog2023 (6) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner company also received a letter dated 11.08.2017 from the 4th respondent stating that the petitioner s EOT proposals up to 26.12.2017 as requested by them was forwarded to the 3rd respondent vide letter dated 25.05.2017 and the EOT was awaited and it was also stated that the transactions were approved by the competent authority on 10.08.2017 and in view of the changed circumstances, instead of giving extension of time to the petitioner company the respondents got issued a fresh notification calling for tenders though the petitioner has completed 85% of the works. It also appears that the financial creditors of the petitioner company have approached the NCLT, Chennai under the provisions of IBC Code, 2016 wherein an interim resolution professional was initially appointed and pending the proceedings before the NCLT a publication was made in relation to the claims of any third parties to which the respondents have not responded and have not choosen to file any claim before the NCLT and therefore a final order was passed on 20.07.2020 approving the resolution plan. In view of the same, the respondents are stopped from initiating any coercive measures against the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 6th respondent dated 17.3.2020 as illegal, arbitrary and without jurisdiction and further direct the respondents not to stop the payments in relation to agreement No. 17/2017-18 and pass . The case of the petitioner in brief is as follows: 2. Brief facts of the case of the review, in pursuance of the tender notification issued by the 2nd respondent in relation to construction of ROB (Road Over Bridge) at Yelamanchili, Visakhapatnam. The petitioner company was awarded the said work vide agreement No. 13/2013-14 dated 27.05.2013. The petitioner company has executed the said work within a period of twenty four (24) months i.e. 27.05.2013. The date on which the site was handed over to the petitioner. The total value of the work is about Rs. 18,73,55,796/-. Apart from the said work, certain additional works were also identified and accordingly supplementary agreements were executed to the tune of approximately about 4.58 crores. The petitioner has executed the works approximately worth of Rs. 15.95 crores. But however, due to certain reasons i.e. Seemandhra Strike, Phailin Cyclone, and certain design changes in formation level and shortage of sand sue to the change of sand p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceed with the process of the tender. But, however directed not to confirm the same in favour of the third party until three weeks. Aggrieved by the said order the respondents filed WA.No. 108 of 2018, in which the Division Bench of this Court had permitted the respondents to proceed with the tender. Accordingly, the respondents proceeded to allot the work in favour of the third party. As the petitioner is also executing the work under the jurisdiction of the 6th respondent at various other places. A letter dated 05.03.2020 was addressed by the 6th respondent to the 5 th respondent informing him to stop the payments to the petitioner s company. Basing upon the recommendations made by the Vigilance and Enforcement Department to recover an amount of Rs. 1,93,87,048/- for liquidated damages and substandard work alleged to have been executed by the petitioner in relation to the said contract executed at Yelamanchali. Prior to letter dated 05.03.2020, the 7th respondent issued Show Cause notice dated 19.02.2020 to the petitioner s company asking them to submit his explanation on 06.03.2020. 8. The case of the petitioner is that, in the Show Cause notice dated 19.02.2020, there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh, Tr. (R B) Roads V Department vide Memo No. 22/70/Roads-V/2018 dated 17.09.2018 has issued instructions to take action to recover an amount of Rs. 1,93,87,048/- (for substandard work Rs. 6,51,468 + for liquidated damages Rs. 1,87,35,580/-. As per Tr.(R B) Vigilance Report No. 9/CC No. 473/V E/E/2017 dated 22.01.2018. Hence, the action taken by the respondents to withhold amount of Rs. 1,93,87,048/- from the other works of the petitioner in (R B) division, Nellore is not illegal and contrary in implementing the Government Orders. 13. It is further stated that, Show Cause Notice was issued to the Contractor on 19.02.2021. However, it was informed about the outcome of the Vigilance report and even as per the letter dated 05.03.2020 the vigilance report is marked with the recommendation made by the Vigilance Enforcement Department. The procedure for recovery was initiated as per the directions of the Special Chief Secretary to Government of Andhra Pradesh, Tr. (R B) Roads-V Dept., vide Memo No. 22/70/Roads-V/2018 dated 17.09.2018. 14. It is further stated that the liquidated damages for the delay caused by the contractor were worked out to be Rs. 6,72,73,394/- which is mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment departments. 18. On perusal of the affidavit filed by the petitioner and the counter affidavit filed by the respondents, it is an admitted fact that the petitioner company has entered into an agreement with the respondents on 27.05.2013 and thereafter in response to the request made by the petitioner, first extension was granted in favour of the petitioner company up to 26.05.2017. But however, though the petitioner company has completed 85% of the work, the balance work could not be completed in view of the change of scope of work which includes preparation of drawings and specifications and also extension of time under a fresh agreement as the specifications in relation to the contract of RE walls is not suitable and therefore the petitioner company suggested for construction of retaining walls with Reinforced Cement Concrete, for which, a fresh agreement was not entered with by the respondents because of which the petitioner s company would not proceed with the work and thereafter the petitioner company also received a letter dated 11.08.2017 from the 4th respondent stating that the petitioner s EOT proposals up to 26.12.2017 as requested by them was forwarded to the 3r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority under sub Section (1) of Section 31 of the Insolvency and Bankruptcy Code, 2016 herein after referred as? 2) As to whether the amendment to Section 31 by Section 7 of Act 26 of 2019 is clarificatory/declaratory or substantive in nature? 3) As to whether after approval of resolution plan by the Adjudicating Authority a creditor including the Central Government, State Government or any local authority is entitled to initiate any proceedings for recovery of any of the dues from the Corporate Debtor, which are not a part of the Resolution Plan approved by the adjudicating authority? have answered as follows:- (i) That once a resolution plan is duly approved by the Adjudicating Authority under sub Section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; 22. In view of the above Judgment of the Hon ble Apex Court in Criminal Appeal No. 8129 of 2019 , which was further followed by the High Court of Telangana in the case of The Sirpur Paper Mills Limited, vs. Union of India , this Court holds that any debt in respect of payment of dues arising under any law for the time being in force including the ones owed to the Central Government or any State Government, or any local authority which does not form a part of the approved resolution plan shall stand extinguished and once a resolution plan is duly approved by the Adjudicating Authority under sub-Section (1) of Section 31, the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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