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TMI Blog2024 (12) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... as the Adjudicating Authority under the provisions of Insolvency and Bankruptcy Code, 2016, the respondents/Commercial Tax Department had also made a claim before the Resolution Professional who admitted the claim of the respondents/Commercial Tax Department for a sum of Rs. 5,47,85,279/- and paid a sum of Rs. 57,021/- which is about 0.1% of the amount due to the respondents/Commercial Tax Department. This was in accordance with the Resolution Plan submitted by the petitioner which was approved by the Committee of Creditors under the provisions of Insolvency and Bankruptcy Code, 2016. 3. After the petitioner took over the said company, the petitioner has sent a representation dated 06.06.2022 and has requested the respondents to remove the encumbrance in the light of the order passed by the NCLT, Hyderabad approving the Resolution Plan submitted by the petitioner under the provisions of Insolvency Bankruptcy Code, 2016. 4. The learned Senior Counsel for the petitioner submits that the law on this aspect has been settled by the Hon'ble Supreme Court in the case of Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited and others in C.A.No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 becomes binding on Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved in the resolution Plan. The legislative intent behind this is, to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT 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." 7. The learned Additional Government Pleader for the respondents has specifically drawn to Paragraph Nos.51, 52 and 56 from the decision of the Hon'ble Supreme Court in Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited and others in C.A.No.8129 of 2019 which reads as under:- "51. This Court thereafter in paragraph 16 reproduced the relevant paragraphs contained in the report of the Bankruptcy Law Reforms Committee Report of 2015. Thereafter, this Court reproduced all the relevant provisions of 1&B Code in paragraphs 18 to 26. 52. This Court in the case of Innoventive Industries Ltd. (supra) thereafter elaborately discussed the scheme of the various provisions of the I&B Code in paragraphs 27 to 32, which read thus: "27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. 29. The scheme of Section 7 stands in contrast with the scheme under Section 8 where an operational creditor is, on the occurrence of a default, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution professional is now to manage the operations of the corporate debtor as a going concern under the directions of a committee of creditors appointed under Section 21 of the Act. Decisions by this committee are to be taken by a vote of not less than 75% of the voting share of the financial creditors. Under Section 28. a resolution professional, who is none other than an interim resolution professional who is appointed to carry out the resolution process, is then given wide powers to raise finances, create security interests, etc. subject to prior approval of the committee of creditors." [emphasis supplied] 56. Another three Judges Bench of this Court in the case of Karad Urban Cooperative Bank Ltd. vs. Swwapnil Bhingardevay & Ors. (supra), taking a similar view, has observed thus: "14. The principles laid down in the aforesaid decisions, make one thing very clear. If all the factors that need to be taken into account for determining whether or not the corporate debtor can be kept running as a going concern have been placed before the Committee of Creditors and CoC has taken a conscious decision to approve the resolution plan, then the adjudicating authority will have to swi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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