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2023 (6) TMI 757

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..... 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 policy of the Government. There was some delay in execution of the said work, as such the petitioner made a representation explaining all his difficulties vide letter dated 23.12.2015. Considering the sa .....

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..... e 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 5th 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 mention with regard to any allegation of substandard work or claiming liquidated damages except referring to the Vigilance Report. 9. The grievance of the petitioner is that, no notice was given to the petitioner's .....

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..... 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 more than 10% of the contract value. But as per clause 48.2 of the agreement the maximum amount of liquidated damages for the whole of work is 10% of the final contract value. Hence, the amount proposed by the Vigilance & Enforcement .....

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..... 5.2013 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 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 .....

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..... 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 entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; (ii) 2019 amendment to Section 31 of the I & B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which .....

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..... oval 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 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 .....

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