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TMI Blog2023 (2) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... application and the claim was filed in the form of 'Form - B' dated 14.11.2017 by Income Tax Department. The Appellants filed an application for review of the order passed by the NCLT dated 20.09.2018 with necessary directions to the Resolution Professional for submission of the revised resolution plan incorporating the entire amount alleged to be due to the Appellants. Subsequently, the NCLT vide its order dated 22.10.2019 stated that since the Resolution Professional intimated the Appellants that the demand after finalization of appeal by CIT(A) would be payable by the new promoter, such written intimation of the Resolution Professional is to be read with the new resolution plan and the demand of the Appellants is duly considered and the Appellants have a right to lay its claim before the new promoter of the Respondent Company. It is observed that the Respondent were examined and rebuttal letter was sent to the Respondent stating that the stay granted by the Appellate Authority had since expired on 13.12.2019 and therefore, the Respondent was requested to pay the outstanding demand for the Assessment Year 2014-15 immediately and intimated within 7 days. Since, there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax and Rs. 1,70,53,311.00 towards interest for the assessment year 2014-15 to the Banker of the applicant i.e. to the Chief Manager/Principal Officer, Allahabad Bank, Dibrugarh Bench i.e. after 15 months of the approval of the Resolution Plan, their claim at this stage cannot be entertained. Prayer made by the Resolution Applicant in this I.A. No. 10 of 2020 [in CPIB No. 20/GB/2017] is accepted to the following extent: (1) Attachment orders issued by the Income Tax Department are hereby set aside. (2) Company can operate the Bank Account without any obstructions from the Income Tax Department. (3) The Resolution Applicant/the Petitioner is hereby directed to strictly implement the Resolution Plan as approved in time without any violation. (4) The Petitioner is further directed to file a compliance report within 15 days of this order before the Registry stating that the Company has been paying all current statutory dues up-to-date especially, EPF, Income Tax, GST without delay. 21. Accordingly, the IA No. 10 of 2020 is disposed of with the above observations and directions. 2. The facts giving rise to this Appeal are as follows: i) A Financial Creditor i.e. Seri Infrastructure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have to wait for the final order of the CIT (Appeals). We also want to intimate you that this is a statutory liability and I the CIT also in the future demanded the same then in that case if it all the resolution process completes then the new promoter of ACIL has to pay the liability to the concern department. iii) It was subsequently intimated by the Resolution Professional vide email dated 08.08.2018 that the National Company Law Tribunal, Guwahati Bench may consider payment of Rs. 1,97,92,084/- being 15% of the outstanding dues owed to the Appellants since the Respondent had filed petition for stay of demand before the Assessing Officer. Further, the balance amount which is considered as contingent liability by the Respondent in the audited accounts for the year 2017 stands payable by the Respondent upon final outcome of the appeal. The Respondent failed to deposit the required tax amount and as such the proposed stay demand was considered null and void and the entire amount of Rs. 16,20,25,953/- was outstanding and collectible demand as on the date of CIRP. On 25.10.2018, the Appellants received a draft of Rs. 41,22,407/- from the Resolution Professional as a tranche payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the Appellants are premature as it is pending with CIT(A) for Assessment Year 2013-14 and with the ITAT, Guwahati Bench for the Assessment Year 2014-15. Further, the Respondent also stated that the demand for Assessment Year 2014-15 has been stayed by the Tribunal vide its order dated 14.06.2019 [Annexure A/7 (Colly)]. The contentions of the Respondent were examined and rebuttal letter bearing No. ITBA/COM/F/17/2019-20/1024086061(1) dated 21.01.2020 was sent to the Respondent stating that the stay granted by the Appellate Authority had since expired on 13.12.2019 and therefore, the Respondent was requested to pay the outstanding demand for the Assessment Year 2014-15 immediately and intimate within 7 days. vi) Since there was no compliance of the notice sent by the Appellants, a bank attachment in the following banks were carried out Allahabad Bank, Dibrugarh Branch and Allahabad Bank, Industrial Finance Bank, Kolkata and further an email dated 28.01.2020 was received from the Allahabad Bank, Industrial Finance Bank, Kolkata that accounts have been marked debit freeze. Subsequently, an email dated 03.02.2020 was sent to the concerned Bank to remit the outstanding demand forth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants is duly considered and the Appellants have a right to lay its claim before the new promoter of the Respondent Company. 4. Further, the Impugned Order has erred in stating that the Appellants claims cannot be entertained after 15 months of the approval of the Resolution Plan. It is submitted that the Appellants have not made any fresh claims but has laid its right to such claims which were made before the NCLT, Guwahati Bench and which has been duly considered by the Bench. 5. The Ld. Counsel for the Appellants during the course of argument and in his memo of appeal along with written submissions submitted that the Financial Creditor i.e. Seri Infrastructure Pvt. Ltd. approached the NCLT, Guwahati Bench by filing an application under Section 7 of the IBC seeking initiation of Corporate Insolvency and Bankruptcy Code. On coming to know about the insolvency proceedings, the Appellants placed before the Resolution Professional demand of income tax for the Assessment Year 2013-14 for Rs. 6,69,84,657 and Assessment Year 2014-15 for Rs. 9,50,41,296 totalling to Rs. 16,20,25,953/- which were outstanding before the date of admitting the said application. The claim was filed in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the revised resolution plan incorporating the entire amount alleged to be due to the Appellants. Subsequently, the NCLT vide its order dated 22.10.2019 stated that since the Resolution Professional intimated the Appellants that the demand after finalization of appeal by CIT(A) would be payable by the new promoter, such written intimation of the Resolution Professional is to be read with the new resolution plan and the demand of the Appellants is duly considered and the Appellants have a right to lay its claim before the new promoter of the Respondent Company. Thereafter, the Appellants vide letter dated 29.11.2019 wrote to the Respondent for payment of outstanding dues along with interest under Section 220(2) of the Income Tax Act, 1961. In response to this, the Respondent stated that the demands of the Appellants are premature as it is pending with CIT(A) for Assessment year 2013-14 and with the ITAT, Guwahati Bench for the Assessment Year 2014-15. Further, the Respondent also stated that the demand for Assessment Year 2014-15 has been stayed by the tribunal vide its order dated 14.06.2019. 8. It is further submitted that plea of the Respondent was examined and rebuttal lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval of a Resolution Plan by the Adjudicating Authority makes it clear that the Adjudicating Authority can approve the Resolution Plan only upon satisfaction that the Resolution Plan, as approved by the Committee of Creditors (CoC), meets the requirements of Section 30(2) of the IBC. When the Resolution Plan does not meet the requirements of Section 30(2), the same cannot be approved. 42. In Ghanshyam Mishra Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., cited by the learned Solicitor General, this Court observed:- 64. It could thus be seen, that the legislature has given paramount importance to the commercial wisdom of CoC and the scope of judicial review by adjudicating authority is limited to the extent provided under Section 31 of the I B Code and of the appellate authority is limited to the extent provided under sub-section (3) of Section 61 of the I B Code, is no more res integra. 65. Bare reading of Section 31 of the I B Code would also make it abundantly clear that once the resolution plan is approved by the adjudicating authority, after it is satisfied, that the resolution plan as approved by CoC meets the requirements as referred to in sub-section (2) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge to the approval of a Resolution Plan, is set out hereinbelow for convenience:- 61. Appeals and Appellate Authority.--(1)... (2) ... (3) An appeal against an order approving a resolution plan under Section 31 may be filed on the following grounds, namely-- (i) the approved resolution plan is in contravention of the provisions of any law for the time being in force; (ii) there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period; (iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the Board; (iv) the insolvency resolution 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. 45. As rightly argued by the learned Solicitor General, there can be no question of acceptance of a Resolution Plan that is not in conformity with the statutory provisions of Section 31(2) of the IBC. Section 30(2)(b) of the IBC, casts an obligation on the Resolution Professional to examine each resolution plan rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meet the requirements of Sub-Section (2) of Section 30 of the IBC, would be invalid and not binding on the Central Government, any State Government, any statutory or other authority, any financial creditor, or other creditor to whom a debt in respect of dues arising under any law for the time being in force is owed. Such a resolution plan would not bind the State when there are outstanding statutory dues of a Corporate Debtor. 49. Section 31(1) of the IBC which empowers the Adjudicating Authority to approve a Resolution Plan uses the expression it shall by order approve the resolution plan which shall be binding... subject to the condition that the Resolution Plan meets the requirements of sub-section (2) of Section 30. If a Resolution Plan meets the requirements, the Adjudicating Authority is mandatorily required to approve the Resolution Plan. On the other hand, Sub-section (2) of Section 31, which enables the Adjudicating Authority to reject a Resolution Plan which does not conform to the requirements referred to in sub-section (1) of Section 31, uses the expression may . 50. Ordinarily, the use of the word shall connotes a mandate/binding direction, while use of the expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debts owed to a secured creditor, which would include the State under the GVAT Act, are to rank equally with other specified debts including debts on account of workman's dues for a period of 24 months preceding the liquidation commencement date. 57. As observed above, the State is a secured creditor under the GVAT Act. Section 3(30) of the IBC defines secured creditor to mean a creditor in favour of whom security interest is credited. Such security interest could be created by operation of law. The definition of secured creditor in the IBC does not exclude any Government or Governmental Authority. 58. We are constrained to hold that the Appellate Authority (NCLAT) and the Adjudicating Authority erred in law in rejecting the application/appeal of the appellant. As observed above, delay in filing a claim cannot be the sole ground for rejecting the claim. 59. The appeals are allowed. The impugned orders are set aside. The Resolution plan approved by the CoC is also set aside. The Resolution Professional may consider a fresh Resolution Plan in the light of the observations made above. However, this judgment and order will not, prevent the Resolution Applicant from submitting a pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Line NCLAT 499. 13. It is further submitted that the Resolution Plan duly approved and implemented cannot be modified. The law is well laid down that once the resolution plan is duly approved by the Committee of Creditors and the Adjudicating Authority, it cannot be altered or modified. In the present case the Appellants had filed its claim for Rs. 16,20,25,953/- which was accepted to the extent of Rs. 1,97,92,084/-. The claim of the appellants formed the part of the information memorandum, pursuant to which the successful resolution applicant has already paid an amount of Rs. 1,20,23,691.30. Therefore, the claim raised by the Appellants for Rs. 16,20,25,953/- cannot be accepted as it would lead to a modification of the resolution plan which otherwise is not allowed under I B Code. Once the requirements of the IBC have been fulfilled, the Adjudicating Authority and the Appellate Authority are duty bound to abide by the discipline of the statutory provisions of I B Code. In this regard referred following judgments: Ebix Singapore (P) Ltd. V. Educomp Solutions Ltd. (CoC) (2022) 2 SCC 401 : 2021 SCC OnLine SC 707. Pratap Technocrats 9P) Ltd. V. Reliance Infratel Ltd. 9Monitoring Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer (1) Vs. Rainbow Papers Limited, Civil Appeal No. 1661 of 2020 dated 06th September, 2022 which is not maintainable since the statutory authority was not paid any amount through the resolution plan whereas in the instant case Rs. 1,97,92,084/- was accepted and subsequently Rs. 1,20,23,691.03 was paid towards full and final settlement of its claim. The Hon'ble Bombay High Court in the case of NRC Limited V. State of Maharashtra Anr. (Writ Petition No. 8449 of 2022) has clearly stated that the judgment of State Tax Officer (1) Vs. Rainbow Papers Limited, Civil Appeal No. 1661 of 2020 dated 06th September, 2022 was on a different footing and under different circumstances which cannot be referred to in the instant case. In Rainbow Papers Limited case it is stated that the judgment of Ghanashyam Mishra Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. shall be binding in all respect and also the Adjudicating Authority recording submission subject to its satisfaction of such confirmation. 18. After hearing the parties and going through the pleadings made on behalf of the parties and also the judgment passed by the Hon'ble Supreme Court in the case of State Tax Officer ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ITAT, Guwahati Bench for the Assessment Year 2014-15. Further, the Respondent also stated that the demand for Assessment Year 2014-15 has been stayed by the Tribunal vide its order dated 14.06.2019. We also observed that the Respondent were examined and rebuttal letter bearing No. ITBA/COM/F/17/2019-20/1024086061(1) dated 21.01.2020 (Annexure A/8) was sent to the Respondent stating that the stay granted by the Appellate Authority had since expired on 13.12.2019 and therefore, the Respondent was requested to pay the outstanding demand for the Assessment Year 2014-15 immediately and intimated within 7 days. Since, there was no compliance of the notice sent by the Appellants a bank attachment in the following banks were carried out; (i) Allahabad Bank, Dibrugarh Branch and (ii) Allahabad Bank, Industrial Finance Bank, Kolkata and further an email dated 28.01.2020 was received from the Allahabad Bank Industrial Finance Bank, Kolkata that accounts have been marked debit freeze. 19. Taking all the facts aforenoted, we are of the considered view that these facts have not been considered by the Adjudicating Authority while passing the impugned order. Admittedly, the judgment passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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