TMI Blog2020 (2) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... rcement cannot decide whether JSW Steel Limited is ineligible under Section 29A or Section 32A (1) (a) which can be determined by the Committee of Creditors / Adjudicating Authority - Section 29A was inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2018 dated 18th January, 2018 with retrospective effect i.e. from 23rd November, 2017. The main object that persons, who are ineligible in terms of clauses (a) to (j) are excluded from acquiring the company. If a person becomes ineligible because of his own act, such person is not eligible to submit a Resolution Plan individually or jointly or in concert with - However, on the direction of the Central Government, if a person is asked to join hands with others for compliance of such direction a person cannot be held to be ineligible on the ground of related party . The attachment of assets of the Corporate Debtor by the Directorate of Enforcement pursuant to order dated 10th October, 2019 as illegal and without jurisdiction. The assets of the Corporate Debtor ( Bhushan Power Steel Limited ) of which JSW Steel Limited is a Successful Resolution Applicant is immune from attachment by the Directorate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Neeraj Kishan Kaul, Senior Advocates with Mr. Manmeet Singh, Mr. Anugrah Robin Frey, Ms. Nishtha Chaturvedi, Ms. Kauser Husain, Ms. Diksha, Mr. Deepak Joshi and Ms. Abhilasha Khanna, Advocates., Mr. Ramji Srinivasan, Senior Advocate with Mr. Spandan Biswal, Mr. Bishwajit Dubey, Ms. Srideepa, Advocates for CoC. Mr. Ramji Srinivasan, Senior Advocate with Mr. Spandan Biswal, Mr. Bishwajit Dubey, Ms. Srideepa Bhatacharyya, Mr. Prafful and Ms. Sylona, Advocates for CoC. Mr. Zoheb Hossain and Mr. Agni Sen, Advocates for ED. Mr. Sanjay Shorey, Director and Mr. P. Atchuta Ramaiah, Joint Director and Mr. Chandrashekhar (SPP) CBI., Mr. Arvind Kr. Gupta, Advocate for Mr. Sanjay Singal, Mr. Sanjay Shorey, Director (Legal Prosecution) and Mr. Pasumarty Atchuta Ramaiah, Joint Director (in all the appeals) JUDGEMENT SUDHANSU JYOTI MUKHOPADHAYA, J. In the Corporate Insolvency Resolution Process of Bhushan Power Steel Limited - ( Corporate Debtor ), the Resolution Plan submitted by JSW Steel Limited ( Resolution Applicant ) has been approved by the Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi by impugned Judgment d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airs, Department of Registration and Stamps, Reserve Bank of India and others are also disposed of. We do not feel persuaded to accept the prayer made in the resolution plan yet the resolution plan applicant may file appropriate applications before the competent authorities which would be considered in accordance with law because it would not be competent for the Adjudicating Authority-NCLT to enter into any such area for granting relaxation, concession or waiver is wholly within the domain of competent authorities. xxx xxx xxx (i) The criminal proceedings initiated against the erstwhile Members of the Board of Directors and others shall not effect the JSW-H1 Resolution Plan Applicant or the implementation of the resolution plan by the Monitoring Agency comprising of CoC and RP. We leave it open to the Members of the CoC to file appropriate applications if criminal proceedings result in recovery of money which has been siphoned of or on account of tainted transactions or fabrication as contemplated under the provisions of the Code or any other law. Those applications shall be considered in accordance with the prevalent law. (j) The RP is directed to redistribute t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facilitates maximization of the value of assets of the corporate debtor, revival of a failing company and realization of dues of creditors to the extent possible under an open, transparent National Company Law Tribunal (NCLT) supervised process. 4) It is submitted that under the process envisaged under the Insolvency Bankruptcy Code, 2016 ( IBC ), once a Resolution Plan is approved by the Ld. Adjudicating Authority, it is binding on all stakeholders. Before approving the Resolution Plan, objections are heard by the Ld. Adjudicating Authority and once hearing on the Resolution Plan and objections is completed before the Ld. Adjudicating Authority and the Resolution Plan is approved, such approved Resolution Plan is binding on all stakeholders, including all government agencies. The provision of the Insolvency and Bankruptcy Code (Amendment) Act, 2019 by which Section 31(1) was amended, makes it amply clear that a resolution plan is binding on Central Government and all statutory authorities. 5) It is submitted that if any Corporate Debtor is undergoing investigation by the Central Bureau of Investigation ( CBI ), Serious Fraud Investigation Office ( SFIO ) and/ o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion plan is invariably recovered by the banks and public financial institutions and other creditors who have lent money to the erstwhile promoters to recover their dues which they have lent to the erstwhile management for creation of moveable or immoveable assets of the corporate debtor in question and therefore, to attach such an asset in the hands of new promoters or resolution applicant would only negate the very purpose of IBC and eventually destroy the value of assets. 8) In light of the above, it is respectfully submitted that the ED while conducting investigation under PMLA is free to deal with or attach the personal assets of the erstwhile promoters and other accused persons, acquired through crime proceeds and not the assets of the Corporate Debtor which have been financed by creditors and acquired by a bona fide third party Resolution Applicant through the statutory process supervised and approved by the Adjudicating Authority under the IBC. In so far as a Resolution Applicant is concerned, they would not be in wrongful enjoyment of any proceeds of crime after acquisition of the Corporate Debtor and its assets, as a Resolution Applicant would be a bona fide assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptcy Code, 2016 reads as follows: WHEREAS a need was felt to give the highest priority in repayment to last mile funding to corporate debtors to present insolvency in case the company goes into corporate insolvency resolution process or liquidation, to provide immunity against prosecution of the corporate debtor, to prevent action against the property of such corporate debtor and the successful resolution applicant subject to fulfilment of certain conditions and to fill the critical gaps in the corporate insolvency framework, it has become necessary to amend certain provisions of the Insolvency and Bankruptcy Code, 2016; AND WHEREAS the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019 has been introduced in the House of the People on the 12th day of December, 2019; AND WHEREAS the aforesaid Bill could not be taken up for consideration and passing in the House of the People; AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action; 12. After Section 32 of the Principal Act, the following section has been inserted which came into force at once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquidation assets under the provisions of Chapter III of Part II of this Code to a person, who was not- (i) a promoter or in the management or control of the corporate debtor or a related party of such a person; or (ii) a person with regard to whom the relevant investigating authority has, on the basis of material in its possession, reason to believe that he had abetted or conspired for the commission of the offence, and has submitted or filed a report or a complaint to the relevant statutory authority or Court. Explanation.─ For the purpose of this sub-section, it is hereby clarified that,─ (i) an action against the property of the corporate debtor in relation to an offence shall include the attachment, seizure, retention or confiscation of such property under such law as may be applicable to the corporate debtor; (ii) nothing in this sub-section shall be construed to bare an action against the property of any person, other than the corporate debtor or a person who has acquired such property through corporate insolvency resolution process or liquidation process under this Code and fulfils the requirements specified in this section, again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal. This Affidavit is filed without the stand of the Central Bureau of Investigation ( CBI ), which is an independent investigating authority. The order dated 13/01/2020 of the Hon ble Appellate Tribunal has been forwarded to the CBI on 16/01/2020 by the answering respondent with a request to take appropriate action on this order. 15. The Central Bureau of Investigation has appeared, which is making investigation, has not alleged any act of money laundering or other acts against JSW Steel Limited or its management. 16. The Serious Fraud Investigation Office is under the control of the Ministry of Corporate Affairs has also not pleaded anything against JSW Steel Limited or its management. 17. Mr. Sanjay Shorey, Director (Legal and Prosecution), Ministry of Corporate Affairs, appearing on behalf of Union of India submitted that JSW Steel Limited has not been held to be related party by the Resolution Professional or the Committee of Creditors or the Adjudicating Authority . 18. However, in spite of issuance of the Ordinance dated 28th December, 2019 and insertion of Section 32A, a contradictory stand has been taken by the Directorate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an has provisions for its effective implementation. 24. The Resolution Plan having approved by impugned order dated 5th September, 2019, is binding on Corporate Debtor (Successful Resolution Applicant herein), its employees, creditors including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force. 25. Attachment of assets of the Corporate Debtor which is under change of the hands whose order of attachment was passed on 10th October, 2019 i.e. after one month seven days under Section 5 of the Prevention of Money Laundering Act, 2002 . 26. As contradictory plea was taken by two Departments of the Central Government, time was allowed to resolve the issue. Only thereafter, after deliberation by the Central Government, the Ordinance has been issued on 28th December, 2019 inserting Section 32A. The preamble suggests that a need was felt to give the highest priority in repayment to last mile funding to corporate debtors to present insolvency in case the company goes into corporate insolvency resolution process or liquidation, to provide immunity against pros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advice, directions or instructions of a director, partner or manager of the corporate debtor; (g) any limited liability partnership or a partnership firm whose partners or employees in the ordinary course of business, acts on the advice, directions or instructions of a director, partner or manager of the corporate debtor; (h) any person on whose advice, directions or instructions, a director, partner or manager of the corporate debtor is accustomed to act; (i) a body corporate which is a holding, subsidiary or an associate company of the corporate debtor, or a subsidiary of a holding company to which the corporate debtor is a subsidiary; (j) any person who controls more than twenty per cent. of voting rights in the corporate debtor on account of ownership or a voting agreement; (k) any person in whom the corporate debtor controls more than twenty per cent. of voting rights on account of ownership or a voting agreement; (l) any person who can control the composition of the board of directors or corresponding governing body of the corporate debtor; (m) any person who is associated with the corporate debtor on account of- (i) participati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. No. Name of the Company CIN/FCRN Holding/ Subsidiary/ Associate/ Joint Venture % of shares held 1 JSW Steel Ltd. L2710MH1994PLC152925 Joint Venture 49.00 2 BPSL U27100DL1999PLC108350 Joint Venture 24.09 3 Everbest Consultancy Services Ltd. U74999MH2016PTC287605 Joint Venture 20.01 4 Jai Balaji Industries Ltd. L27102WB1999PLC089755 Joint Venture 6.90 33. Further, as per the updated information filed with Ministry of Corporate Affairs in Annual Return 2018-19, the company was formed in 2008 and is still in operation. 34. In the light of the above, it was submitted that under Section 32A (1), the liability of the Corporate Debtor shall not cease for the impugned offences under Prevention of Money Laundering Act, 2002 as the Resolution Plan approved by the Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - For the purposes of this proviso, the expression related party shall not include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares or completion of such transactions as may be prescribed, prior to the insolvency commencement date. Explanation II.- For the purposes of this clause, where a resolution applicant has an account, or an account of a corporate debtor under the management or control of such person or of whom such person is a promoter, classified as nonperforming asset and such account was acquired pursuant to a prior resolution plan approved under this Code, then, the provisions of this clause shall not apply to such resolution applicant for a period of three years from the date of approval of such resolution plan by the Adjudicating Authority under this Code; (d) has been convicted for any offence punishable with imprisonment (i) for two years or more under any Act specified under the Twelfth Schedule; or (ii) fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the implementation of the resolution plan; or (iii) the holding company, subsidiary company, associate company or related party of a person referred to in clauses (i) and (ii): Provided that nothing in clause (iii) of Explanation I shall apply to a resolution applicant where such applicant is a financial entity and is not a related party of the corporate debtor: Provided further that the expression related party shall not include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares or completion of such transactions as may be prescribed], prior to the insolvency commencement date; Explanation II-For the purposes of this section, financial entity shall mean the following entities which meet such criteria or conditions as the Central Government may, in consultation with the financial sector regulator, notify in this behalf, namely:- (a) a scheduled bank; (b) any entity regulated by a foreign central bank or a securities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SW Steel Limited and the Corporate Debtor do not become related parties of each other. 42. The Directorate of Enforcement is interpretation that Section 32A of the I B Code is prospective in nature and the benefit of such provision cannot be claimed by the Appellant is wrong and misplaced. 43. A plain reading of Section 32A(1) and (2) clearly suggests that the Directorate of Enforcement/ other investigating agencies do not have the powers to attach assets of a Corporate Debtor , once the Resolution Plan stands approved and the criminal investigations against the Corporate Debtor stands abated. Section 32A of the I B Code does not in any manner suggest that the benefit provided thereunder is only for such resolution plans which are yet to be approved. Further, there is no basis to make distinction between a resolution applicant whose plan has been approved post or prior to the promulgation of the Ordinance. 44. Further, even prior to the passing of the Ordinance, the 3rd Respondent i.e. Union of India through Ministry of Corporate Affairs in its Affidavit in Reply dated 10th October, 2019, had categorically stated that: 5) It is submitted that if any Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and other creditors who have lent money to the erstwhile promoters to recover their dues which they have lent to the erstwhile management for creation of moveable or immoveable assets of the corporate debtor in question and therefore, to attach such an asset in the hands of new promoters of resolution applicant would only negate the very purpose of IBC and eventually destroy the value of assets. 8). In light of the above, the ED while conducting investigation under PMLA is free to deal with or attach the personal assets of the erstwhile promoters and other accused persons, acquired through crime proceeds and not the assets of the Corporate Debtor which have been financed by creditors and acquired by a bona fide third party Resolution Applicant through the statutory process supervised and approved by the Adjudicating Authority under the IBC. In so far as a Resolution Applicant is concerned, they would not be in wrongful enjoyment of any proceeds of crime after acquisition of the Corporate Debtor and its assets, as a Resolution Applicant would be a bona fide assets acquired through a legal process. Therefore, upon an acquisition under a CIR Process by a Resolution Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific plea that it is not a related party of erstwhile Bhushan Power and Steel Limited - ( Corporate Debtor ) and placed on record the following facts: II. The Appellant is not related party of the Corporate Debtor 10. The basis of ED s submissions that the Appellant is a related party of the Corporate Debtor is the existence of a company namely Rohne Coal Company Private Limited ( RCCPL ) which was incorporated in 2008 as a joint venture amongst (i) JSW Steel Ltd. (Appellant); (ii) Bhushan Power and Steel Ltd. (Corporate Debtor) and (iii) Jai Balaji Industries Ltd. In this regard, Appellant seeks to place on record the following facts: (i) The Appellant had individually applied to the Government of India for allocation of a Coking Coal Block. Such application was not made jointly with any entity. However, by letter of intent ( LoI ) dated 9th April, 2017, the Government of India, through Ministry of Coal, proposed joint allocation of Rohne Coking Coal Block amongst the aforesaid three companies, including the Appellant and the Corporate Debtor herein, with their respective proportionate share of coal reserve. (ii) At the behest of the Ministry of Coal, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of ineligibility and approved the plan. 54. The Notification of Government of India through Ministry of Coal dated 9th April, 2017 shows that JSW Steel Limited in its individual capacity applied for allocation of Rohne Coking Coal Block in its favour. However, there being more applicants, the Central Government contemplated to make joint allocation of Rohne coking coal block in favour of M/s. JSW Steel Ltd. , M./s. Bhushan Power Steel Ltd. and M/s. Jai Balaji Sponge Ltd. for meeting their proportionate share of requirement of coal, as extracted below: 55. All the three options suggest that either two or more of them had to make a consortium or one of them will be designated as leader of the block and others as associates of the block. The third option was that in each block, one allocatee will be made to the group of leader and associates jointly. 56. There was a compulsion on the part of JSW Steel Limited for allocation of Rohne Coking Coal Block though it applied for individual allotment, because of mandate of the Central Government. They had to share jointly with the two others including M./s. Bhushan Power Steel Ltd. and M/s. Jai Bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ineligibility. 63. As per Section 30(1), the Resolution Applicant while submitting Resolution Plan has to file an Affidavit stating clearly that he is eligible or not eligible under Section 29A. 64. As per Section 30(3), the Resolution Professional shall present to the Committee of Creditors for its approval such Resolution Plans which confirm the conditions referred to in sub-section (2). It is only thereafter the Committee of Creditors is empowered to find out whether the Resolution Applicant is ineligible under Section 29A: 30. Submission of resolution plan.─( 1) A resolution applicant may submit a resolution plan [along with an affidavit stating that he is eligible under section 29A] to the resolution professional prepared on the basis of the information memorandum. xxx xxx xxx (3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in sub-section (2). [(4) The committee of creditors may approve a resolution plan by a vote of not less than [sixty-six] per cent. of voting share of the financial creditors, after considering its f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Committee of Creditors is also required to decide whether it is related party to the Corporate Debtor or not. (iii) The Adjudicating Authority while passing order under Section 31 can find out whether the Resolution Applicant fulfils the conditions under Section 30(2) which includes Section 30(2) (e) and in terms of Section 29A can decide whether the Resolution Applicant is a related party to the Corporate Debtor . 67. The Directorate of Enforcement has not been empowered under I B Code to decide the question. Even if the stand taken by the Directorate of Enforcement is accepted that JSW Steel Limited is a related party of M./s. Bhushan Power Steel Ltd. - ( Corporate Debtor ), the Directorate of Enforcement cannot decide whether JSW Steel Limited is ineligible under Section 29A or Section 32A (1) (a) which can be determined by the Committee of Creditors / Adjudicating Authority. 68. Section 29A was inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2018 dated 18th January, 2018 with retrospective effect i.e. from 23rd November, 2017. The main object that persons, who are ineligible in terms of clauses (a) to (j) are excluded from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs before interest tax depreciation amortization generated by the Corporate Debtor during the Corporate Insolvency Resolution Process ( CIRP EBITDA ) shall go to the Resolution Applicant . According to them, the Committee of Creditors has accepted that distribution of profit/ earnings before interest tax depreciation amortization generated by the Corporate Debtor during the Corporate Insolvency Resolution Process ( CIRP EBITDA ) should go to the benefit of Creditors. 79. The Judgment of the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta Ors.─2019 SCC OnLine SC 1478 is binding on all the Courts including the Tribunals and the Committee of Creditors . It depends upon the commercial wisdom of the Committee of Creditors . The Resolution Plan submitted by JSW Steel Limited has been approved by the Adjudicating Authority with modification by impugned order dated 5th September, 2019 and as the same has not been challenged by the Committee of Creditors , therefore, we are not inclined to interfere with the plan as approved by the Adjudicating Authority at the instance of ex-promoters/ shareholders Mr. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Resolution Professional on 21st September, 2017 the said admitted claim was unilaterally reduced to ₹ 70,31,538. In view thereof, the Appellant was constrained to approach the Adjudicating Authority seeking direction to the Resolution Professional to rectify the gross error as the Resolution Professional had failed to rectify the same despite follow up by the Appellant. Accordingly, the admitted claim was corrected by the Resolution Professional pursuant to Adjudicating Authority s order dated 9th October, 2017. 85. It was submitted that in view of the said nature of functioning of the Resolution Professional since the inception of the Corporate Insolvency Resolution Process , the Appellant, out of abundant caution, began to closely monitor the list of Operational Creditors being regularly updated by the Resolution Professional . In doing so, the Appellant noticed that on regular intervals the admitted amount indicated to select few Operational Creditors were being revised by reduction in their amounts post admitting the same thereby clearly indicating, inter alia, that pre-Corporate Insolvency Resolution Process payments were being made towards admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Creditors can only be paid towards supplies made by them during Corporate Insolvency Resolution Process . The said provision is as below: Where the IRP, or the RP as the case may be considers the supply of goods and services critical to protect and preserve the value of the Corporate Debtor and manage the operations of such Corporate Debtor as a going concern, then the supplier of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium except where such Corporate Debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified. 89. This issue stands decided by the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta Ors.─2019 SCC OnLine SC 1478 , wherein the Hon ble Supreme Court observed: 88. 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 ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laims of Operational Creditors with a cap of ₹ 350 Cr, the Appellant (which is the largest admitted Operational Creditor ) was malafidely put in a different class namely identified contingent creditors . As per the Resolution Plan , such identified contingent creditors (totalling to approximately ₹ 5000 Crores) are to receive 10% of their claim, only and only if their claim crystalizes within a period of two years from date of approval of the Resolution Plan , subject to maximum of 35 Crores. 92. It was further submitted that the aforesaid categorization of the Appellant s admitted claim as an identified contingent creditor was also contradictory to Resolution Professional s own letter of 20th February, 2019, whereby the Appellant was informed that its status under the Resolution Plan was as per the list of Operational Creditors available on the website of the Corporate Debtor . The Impugned Order, however, at para 106, has failed to appreciate that by treating the Appellant differently from other Operational Creditors , the Resolution Plan is in derogation to Section 30 (2) (e) of the I B Code as it is not fair and equitable to all creditors. 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncern. 97. As per the said agreement, the pre-Corporate Insolvency Resolution Process dues of the Appellant were cleared by the Resolution Professional in a span of around 10 months from 27th July, 2017 and numerous payments were issued reflecting the invoice against which payments were made. Payments were released to the Appellant only after following the detailed 21 steps procedure in the Indent Processing. It is stated that after the Resolution Process, due to clerical mistake on the part of the Resolution Professional , it has not cleared the number of dues including the dues during the Corporate Insolvency Resolution Process . 98. Learned counsel for the Resolution Professional submitted that no directions were issued by him to make payments of pre-Corporate Insolvency Resolution Process period claims and the admitted claim of the Appellant to the tune of ₹ 7,62,47,071/- will be accordingly dealt with in accordance with the approved Resolution Plan . 99. It was submitted by the Resolution Professional that no promises were made and no assurances given to the Appellant to pay the outstanding dues, which have been paid only on completion of the Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant- Kalyani Transco . It is accordingly, dismissed. Appellant- State of Odisha 106. According to Appellant- State of Odisha , it is legally entitled to recover a sum of approx. ₹ 139,15,80,504/- on account of entry tax dues in view of the finality of the issue with regard to the legality of the levy upheld by the Hon ble Supreme Court vide Judgment reported in (2017) 12 SCC 1. The said case filed by State of Orissa wherein Bhushan Power Steel Limited was one of the Respondents also was decided by this Judgment) followed by the Judgment and order dated 9th October, 2017 passed by the Hon ble Supreme Court in State of Kerala Ors. v. Fr. William Fernandez etc.─ Civil Appeals No. 3381-3400 of 1998 . In the said case, the Hon ble Supreme Court upheld the legislative competence of the State Legislature to impose entry tax on the goods imported from other State as well as outside the country. 107. Learned counsel appearing on behalf of the Resolution Professional submitted that no claim was filed by the State of Odisha before the Resolution Professional . The Committee of Creditors approved the Resolution Plan on 16th October, 2018. The Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly dismissed. Appellant- CJ Darcl Logistics Limited 112. The grievance of the Appellant- CJ Darcl Logistics Limited is against collation of claim by the Resolution Professional . It was submitted that the Adjudicating Authority while passing the impugned order on 5th September, 2019 failed to adjudicate numerous issues pertaining to the illegal and void actions of the Resolution Professional in relation to the total amount payable to the Appellant. 113. Learned counsel for the Appellant submitted that the Adjudicating Authority wrongly clubbed all the Operational Creditors in one group and they have only adjudicated the issues arising in one Operational Creditor s matter as a lead matter instead of adjudicating the distinct issues of different Operational Creditors . 114. It is alleged that the Resolution Professional verified the claim amount of ₹ 7,73,80,565/- but after approval of the plan, it was shown that part of the pre-Corporate Insolvency Resolution Process was paid to the Appellant- Operational Creditor . The Resolution Professional had only shown one PDC amounting to ₹ 15,00,000/- only and he remained silent on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily construed as, the material in the possession of investigating agency as on the date when such agency is called to provide its confirmation/ certification with respect to Section 32A (1) (b) of the I B Code . 121. If the investigating agency is permitted to keep such confirmation in abeyance till the investigation is complete in all respects then the object and purpose of introducing Section 32A (1) (b) will be defeated and no Resolution Applicant would come forward to implement its Resolution Plan for the fear of the assets of the Corporate Debtor being attached. 122. The intent of the I B Code affected on attachment of the assets of the Corporate Debtor by the Directorate of Enforcement after approval of the Resolution Plan . In this background, the intent and purpose of the insertion of Section 32A is to provide certainty to the Resolution Applicant that the assets of the Corporate Debtor as represented to him and for which he proposes to pay value/ consideration in terms of the Resolution Plan , would be available to him in the same manner as at the time of submissions of the Resolution Plan . Mere assertion of the Directorate of Enforcement in its re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addendum to the RFP as held by the Hon ble Supreme Court. 127. We accordingly, set aside the part of the conditions as made in Paragraph 128 (j) of the impugned order dated 5th September, 2019 which relates to distribution of profit during the Corporate Insolvency Resolution Process . The Monitoring Committee with the help of the Resolution Professional will now go through the RPF issued in terms of Section 25 of the I B Code and as consented to by the Resolution Applicant ( JSW Steel Limited ) will make distribution of profit accordingly. The condition imposed at paragraph 128 (j) stands substituted with the aforesaid observations. 128. It is pleaded that there is ambiguity regarding List A which is mandatory part of the Resolution Plan . Paragraph 128 (g) of the impugned order reads as follows: (e) Various reliefs sought from the statutory authorities under the Income Tax Act, 1961, Ministry of Corporate Affairs, Department of Registration and Stamps, Reserve Bank of India and others are also disposed of. We do not feel persuaded to accept the prayer made in the resolution plan yet the resolution plan applicant may file appropriate applications before the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, any other liabilities for any non-compliance with statutory obligations including taxes, including delays in filing returns or payment of tax dues, against the Company shall stand settled in accordance with the provisions of this plan as approved by NCLT. (v) All penalties, interest, delayed payment charges, any other liabilities for any non-compliance with applicable labour and employment Laws shall stand settled to the extent and in the manner provided in this Resolution Plan as approved by NCLT. (vi) Any right of subrogation, reimbursement, or recompense against the Company under any corporate guarantee, letters of comfort or similar instruments, or any obligation provided by any promoter, affiliate or Related Party of the Company shall stand extinguished and become null and void as of the NCLT Approval Date. (vii) Any right of any shareholder of the company under any shareholder agreement with the Company shall stand extinguished as of the NCLT Approval Date and such shareholder agreement shall stand terminated as of the NCLT Approval Date and no such shareholder shall be entitled to exercise any right including objecting to any amendment of the articles of associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn or refund of any benefits availed or available by the Corporate Debtor, and (c) payment of any present or future potential taxes, levies and holdbacks (such balance of the Recovered Monies (pertaining to the period prior to the Insolvency Commencement Date and which is prorate for such period) hereinafter referred to as Pass Through Monies ). 136. Para 13 of the Addendum Letter stipulates that in the event that the Adjudicating Authority directed that monies were to be recovered on account of the Identified Transaction, only if the Corporate Debtor had received such monies prior to the 3rd anniversary of the Effective Date, then the beneficiary of such monies would be the Committee of Creditors on a prorate basis (after deduction of Pass Through Monies as defined in the Resolution Plan). 137. Therefore, Para 128(i) of the impugned order ought not to have modified the specific inter se understanding between the Committee of Creditors and the Appellant on sharing of such proceeds, which has been recorded in Para 13 of the Addendum Letter and forms a part of the Resolution Plan . Further, since this is a matter which relates to a commercial understanding between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all enter into suitable contractual arrangements with the Monitoring Professional to perform the aforementioned duties; and (iv) an independent O M contractor (identified by the CoC from a list of O M contractors provided by the Resolution Applicant) shall be responsible for the operation and maintenance of the Company s facilities. [Para 2(a) of Part A of the Resolution Plan at pg. 3] 141. In para 51 of the Impugned order, the Adjudicating Authority has acknowledged the entire scheme for interim management of the Corporate Debtor until the implementation of the Resolution Plan . There is no observation or holding in the impugned order that such process of interim management of the Corporate Debtor has not been approved or has been carved out from the scope of approval of the Resolution Plan . 142. However, in view of the observations of the Adjudicating Authority in para 128(e) of the impugned order, it is stated that the Resolution Professional has interpreted that the Resolution Plan has been modified to such extent. It is thus clarified that : (i) The direction in para 128(f) of the impugned order that the existing Board of Directors shall remain suspended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count. 144. Therefore, the conditions stipulated by the Adjudicating Authority at paragraph 128(k) of the impugned order being against the provisions of law, is set aside. The Appellant being the Successful Resolution Applicant cannot be asked to face with undecided claims after the Resolution Plan submitted by him and accepted by the Committee of Creditors as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully takes over the business of the Corporate Debtor , as held by the Hon ble Supreme Court. 145. Learned counsel for the Appellant- JSW Steel Limited submitted that Bhushan Power Steel Limited - ( Corporate Debtor ) has 25.6% shares in Nova Iron Steel after a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s including Nova Iron Steel in which Corporate Debtor has made an investment and it is not required to follow any separate procedure for reclassification of the company as shareholders of such companies . 148. The impugned Judgment dated 5th September, 2019 passed by the Adjudicating Authority approving the plan submitted by JSW Steel Limited is approved with aforesaid modification/ clarification as made above. The order of stay of implementation of the plan stands vacated. The approved plan be given effect immediately in the manner as ordered by the Adjudicating Authority and modified/ clarified by this Appellate Tribunal. 149. The appeal preferred by JSW Steel Limited is allowed. The appeals preferred by Mr. Sanjay Singal , Kalyani Transco , Jaldhi Overseas Pte. Ltd. , Medi Carrier Pvt. Ltd. , CJ Darcl Logistics Ltd. and State of Odisha Ors. are dismissed. 150. For the reasons aforesaid, the application for impleadment of Mrs. Aarti Singal, equity shareholder and guarantor of the Corporate Debtor is also rejected. 151. However, the Judgment passed by the Adjudicating Authority (National Company Law Tribunal) and this Appellate Tribunal will not c ..... 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