9911796707
TMI Blog2024 (12) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... d and others [ 2021 (4) TMI 613 - SUPREME COURT ] has clearly held in several cases where specific period of limitation is prescribed for condoning the delay. Section 5 of the Limitation Act cannot be invoked to entertain such an application or an appeal. Therefore, although the respondents may have a case for setting aside the aforesaid order of the NCLT, in absence of a valid challenge to the same in time before NCLAT, the respondents/Commercial Tax Department cannot take a stand contrary to the order passed by the NCLT on 08.04.2021 in I.A.No.981 of 2020. The Court is of the view this Writ Petition deserves to be allowed. Accordingly, it is allowed. - Honourable Mr. Justice C. Saravanan For the Petitioner : Mr. Vijay Narayan Senior Counsel for M/s. R. Hemalatha For the Respondents : Mr. C. Harsharaj Additional Government Pleader ORDER Before the NCLT, a Corporate Insolvency Resolution proceedings was initiated against the Sujana Metal Products Limited. The said company was taken over by the petitioner under the provisions of the Insolvency and Bankruptcy Code, 2016, after an application was filed by the Resolution Professional to approve the Resolution Plan submitted by the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e faults of the earlier promoters. She further states, that once the resolution plan is accepted, the earlier promoters will be dealt with as individuals for their criminality but not the new bidder who is trying to restore the company. 77. It is clear, that the mischief, which was noticed prior to amendment of Section 31 of I B Code was, that though the legislative intent was to extinguish all such debts owed to the Central Government, any State Government or any local authority, including the tax authorities once an approval was granted to the resolution plan by NCLT; on account of there being some ambiguity, the State/Central Government authorities continued with the proceedings in respect of the debts owed to them. In order to remedy the said mischief, the legislature thought it appropriate to clarify the position, that once such a resolution plan was approved by the Adjudicating Authority, all such claims/dues owed to the State/Central Government or any local authority including tax authorities, which were not part of the resolution plan shall stand extinguished. 86.As discussed hereinabove, one of the principal objects of I B Code is, providing for revival of the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uant to the orders passed by the NCLT as an Adjudicating Authority of the Resolution Plan submitted under the provisions of Insolvency and Bankruptcy Code, 2016. 6. On the other hand, the learned Additional Government Pleader for the respondents would submit that against the order passed by the NCLT, Hyderabad dated 08.04.2021 in I.A.No.981of 2020 in CP (IB) No.666/7/HDB/2018, the Commercial Tax Department proposes to file a Writ Petition before the High Court of Telangana, Hyderabad. It is submitted that the law on the subject has been later clarified by a bench of equal strength in the context of secured creditors such as statutory bodies to whom an assessee was in default in State Tax Officer Vs. Rainbow Papers Limited (2023) 9 SCC 545, wherein, it was held as under:- 51. If the established facts and circumstances require discretion to be exercised in a particular way, discretion has to be exercised in that way. If a resolution plan is ex facie not in conformity with law and/or the provisions of IBC and/or the Rules and Regulations framed thereunder, the Resolution would have to be rejected. It is also a well-settled principle of interpretation that the expression may , if circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5(21) means a claim in respect of provision of goods or services. 28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the Explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part 1, particulars of the corporate debtor in Part II, particulars of the proposed Interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4(3), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter that the debt is disputed so long as the debt is due 1.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. 31. The rest of the insolvency resolution process is also very important. The entire process is to be completed within a period of 180 days from the date of admission of the application under Section 12 and can only be extended beyond 180 days for a further period of not exceeding 90 days if the committee of creditors by a voting of 75% of voting shares so decides. It can be seen that time is of essence in seeing whether the corporate body can be put back on its feet, so as to stave off liquidation. 32. As soon as the application is admitted, a moratorium in terms of Section 14 of the Code is to be declared by the adjudicating authority and a public announcement is made stating, inter alia, the last date for submission of claims and the details of the interim resolution professional who shall be vested with the management of the corporate debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LAT. The law on the subject of limitation is clear. The Hon'ble Supreme Court has clearly held in several cases where specific period of limitation is prescribed for condoning the delay. Section 5 of the Limitation Act cannot be invoked to entertain such an application or an appeal. Thus, at this distant point of time the Commercial Tax Department cannot file an appeal before the NCLT against the order of the NCLT dated 08.04.2021 passed in I.A.No.981 of 2020 approving the Resolution Plan submitted by the petitioner herein under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. Therefore, although the respondents may have a case for setting aside the aforesaid order of the NCLT, in absence of a valid challenge to the same in time before NCLAT, the respondents/Commercial Tax Department cannot take a stand contrary to the order passed by the NCLT on 08.04.2021 in I.A.No.981 of 2020. 10. That apart, the respondents/Commercial Tax Department had also filed a claim petition before the Resolution Professional as mentioned above. 11. Under these circumstances, Court is of the view this Writ Petition deserves to be allowed. Accordingly, it is allowed. No costs. Consequently, c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
