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TMI Blog2024 (11) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinued.' In the present case, the MCD did not lodge its claim in respect of property tax dues against the petitioner during the CIRP. Admittedly, the claim of the MCD is not a part of the approved resolution plan. Consequently, prima facie, any statutory dues owed to the MCD by the petitioner prior to the date on which the resolution plan is approved i.e. 26.03.2021, cannot be demanded/recovered. The decision of Rainbow Papers [ 2022 (9) TMI 317 - SUPREME COURT] does not detract from the above inasmuch as unlike in the said case, the concerned statutory authority (MCD) did not lodge its claim before the resolution professional during the CIRP initiated qua the petitioner. Further, MCD has not challenged the approval of resolution plan by the Adjudicating Authority. An ad-interim order is passed staying the operation of the impugned Common Assessment Order dated 02.03.2024 (to the extent it relates to Flat Nos. 109 to 112 owned by the petitioner). However, the petitioner is directed to pay the property tax for the period after 26.03.2021 - List on 25.07.2024. - HON'BLE MR. JUSTICE SACHIN DATTA For the Petitioner: Mr. Gopal Jain, Sr. Adv. along with Mr. Chandra Shekhar Ya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outstanding government dues prior to the effective date i.e. 26.03.2021 stand written off in full and are deemed to have been permanently extinguished. 4. Learned senior counsel for the petitioner submits that any demand raised by the respondents for the period prior to effective date of the resolution plan i.e. 26.03.2021, is deemed to have been extinguished under Regulation 37 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. It is emphasized that in terms of Section 31 of the IBC a resolution plan approved by NCLT or NCLAT is binding on all stakeholders. Consequently, it is submitted that the impugned order, which seeks to recover property tax from the petitioner for the period spanning from 01.04.2004 to 31.03.2024, is bad in law and run contrary to the provisions of IBC as well as the orders passed by NCLT and NCLAT. It is further submitted that the said aspects have been highlighted by the petitioner vide its letters/representations dated 20.06.2023, 07.07.2023, 31.07.2023 and 23.08.2023 sent to the respondents; however, the respondents have failed to consider the same in the impugned order. It is submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 123B of DMC Act, onus to file Self Assessment Property Tax Return (SAPTR) and to pay correct property tax on properties within the jurisdiction of Municipal Corporation of Delhi, lies with the owner I occupier of property. As per available record and also admitted by taxpayer, the taxpayer or the occupier has/have never filed SAPTRs and never paid property tax in respect of present property. Therefore, as per various sections of DMC Act, the property tax on all properties is assessable and recoverable from property itself or the owner or occupier are bound to pay the same. As mentioned above, the Delhi Municipal Corporation Act, 1957 is a statute specifically dealing with taxation under Chapter VIII of the Act and any permission / order of Hon ble NCLAT cannot override the provisions of DMC Act specifically the Sections relating to taxation of a property. 11 12 13) As per demand and collection register, the property stands in the name of M/s Bhushan Steel and Strips Ltd and M/s Bhushan Industries but now M/s. Shushan Power and Steel Ltd. is pursuing the matter. Under section 128(4) of DMC Act, every person who makes a transfer of property continue liable for the payment of all pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 IBC does not exclude any Government or Governmental Authority. 7. I have perused the record and heard learned counsel for the parties. Prima facie, there is merit in the submissions advanced by learned senior counsel for the petitioner. 8. In Essar Steel (supra), it has been held as under: 107. For the same reason, the impugned Nclat judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with undecided claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance, you asked whether IBC will override SEBI. Section 238 provides that IBC will prevail in case of inconsistency between two laws. Actually, Indian courts will have to decide, in specific cases, depending upon the material before them, but largely, yes, it is IBC. There is also this question about indemnity for successful resolution applicant. The amendment now is clearly making it binding on the Government. It is one of the ways in which we are providing that. The Government will not raise any further claim. The Government will not make any further claim after resolution plan is approved. So, that is going to be a major, major sense of assurance for the people who are using the resolution plan. Criminal matters alone would be proceeded against individuals and not company. There will be no criminal proceedings against successful resolution applicant. There will be no criminal proceedings against successful resolution applicant for fraud by previous promoters. So, I hope that is absolutely clear. I would want all the Hon'ble Members to recognise this message and communicate further that this Code, therefore, gives that comfort to all new bidders. So now, they need not be sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and to make it a going concern. The I B Code is a complete Code in itself. Upon admission of petition under Section 7 there are various important duties and functions entrusted to RP and CoC. RP is required to issue a publication inviting claims from all the stakeholders. He is required to collate the said information and submit necessary details in the information memorandum. The resolution applicants submit their plans on the basis of the details provided in the information memorandum. The resolution plans undergo deep scrutiny by RP as well as CoC. In the negotiations that may be held between CoC and the resolution applicant, various modifications may be made so as to ensure that while paying part of the dues of financial creditors as well as operational creditors and other stakeholders, the corporate debtor is revived and is made an on-going concern. After CoC approves the plan, the adjudicating authority is required to arrive at a subjective satisfaction that the plan conforms to the requirements as are provided in sub-section (2) of Section 30 of the I B Code. Only thereafter, the adjudicating authority can grant its approval to the plan. It is at this stage that the plan b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that view of the matter, the appeals deserve to be allowed only on this ground. It is held that the claim of the respondent, which is not part of the resolution plan, does not survive 12. In essence, once a resolution plan is approved by the Adjudicating Authority under Section 31(1) of the IBC, all stakeholders including Central Government, any State Government or any local authority are bound by its terms, and any claims or dues including statutory dues owed to the governmental agencies which are not a part of the approved resolution plan are extinguished; it is impermissible to pursue or initiate proceedings in respect of such dues for the period prior to the effective date of the resolution plan. 13. In the present case, the MCD did not lodge its claim in respect of property tax dues against the petitioner during the CIRP. Admittedly, the claim of the MCD is not a part of the approved resolution plan. Consequently, prima facie, any statutory dues owed to the MCD by the petitioner prior to the date on which the resolution plan is approved i.e. 26.03.2021, cannot be demanded/recovered. 14. The decision of Rainbow Papers (supra) does not detract from the above inasmuch as unlike ..... X X X X Extracts X X X X X X X X Extracts X X X X
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