2025 (6) TMI 1593 - AT - Service Tax

Abatement of appeal or continuation of proceedings - Resolution Plan approved - ppellant argued that the appeal should be treated as abated since the NCLT had approved the Resolution Plan and appointed a Resolution Professional - HELD THAT - The order of NCLT perused now that the Resolution Plan stands accepted which is undisputed by both the parties the present appeal would not survive as ruled by the Hon ble Apex Court in Ghanashyam Mishra and Sons Pvt. Ltd. Vs Edelweiss Asset Reconstruction Company Ltd. Ors. 2021 (4) TMI 613 - SUPREME COURT which decision has been followed by various CESTAT Benches across India. Once the Resolution Plan is approved by the Adjudicating Authority under Section 31 (1) of Insolvency and Bankruptcy Code 2016 (IBC) then no person will be entitled to initiate or continue any proceedings in respect to a claim which is not part of the resolution plan . That means even the present proceedings cannot be continued as held in Ghanashyam Mishra and Sons Pvt. Ltd. The appeal stands closed/disposed of accordingly.

Summary

The Appellate Tribunal (CESTAT Chennai) addressed an appeal concerning demands raised after the National Company Law Tribunal (NCLT) approved a Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC). The appellant argued that the appeal should be treated as "abated" since the NCLT had approved the Resolution Plan and appointed a Resolution Professional. The respondent contended that since the Resolution Professional sought withdrawal and filed an appeal for appointment of another, finality had not been achieved.The Tribunal relied on the Supreme Court's ruling in *Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd.* (Civil Appeal No. 8129 of 2019, dated 13.04.2021), which held:"(i) That once a resolution plan is duly approved by the Adjudicating Authority under subsection (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... On the date of approval... all such claims, which are not 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... is clarificatory and declaratory in nature...(iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings... could be continued."Applying this precedent, the Tribunal concluded that since the Resolution Plan was approved by the Adjudicating Authority under Section 31(1) IBC, "no person will be entitled to initiate or continue any proceedings in respect to a claim which is not part of the resolution plan," thereby rendering the present appeal unsustainable. The appeal was accordingly dismissed.