TMI Blog2021 (7) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... r which were prior to CIRP and are prior to approval of the Resolution Plan and before transfer of the assets of the Corporate Debtor to the Resolution Applicant shall stand extinguished. Application allowed. - IA No. 2000/2020 in CP No. 1132 (IB)/MB/C-II/2017 - - - Dated:- 3-6-2021 - Harihar Prakash Chaturvedi , Member ( J ) And Ravikumar Duraisamy , Member ( T ) For the Appellant : Uzair Z. Kazi , Advocate For the Respondents : Kedar Dighe , Advocate ORDER Ravikumar Duraisamy, Member (T) 1. The Applicant preferred the present Miscellaneous Application in lieu of the liberty granted by this Court's Order dated 19th April, 2018. Thus, he has sought declaration that the Respondents are not entitled to claim any outstanding amount from the Applicant in respect of any due or amount payable prior to 2nd May, 2018 and other ancillary and consequential reliefs. 2. It is stated that the Applicant as a Corporate Debtor went into Corporate Insolvency Resolution Process ( CIRP Process ) by an Order dated 10th July, 2017 by this Tribunal and thereafter the Corporate Interim Resolution Process began. 3. The Respondent No. 1 is a statutory authority/Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwala Housing and Infrastructure Limited Mukhi Industries Limited. Consequent there to the successful Resolution Applicant also took over the charge of the Applicant on 3rd May, 2018. 7. Therefore, it is submitted that the Successful Resolution Applicant is expected to make payment only as per and in terms of the Resolution Plan to the Operational Creditors as well as Financial Creditors including the payment of the Respondent No. 2. It is reiterated that the claim of the Respondent No. 2 was recorded and/or reflected in the Information Memorandum, prepared by the Interim Resolution Professional and Resolution Professional, i.e. the Applicant herein. 8. It is stated that subsequent to the approval of the Resolution Plan by this Adjudicating Authority vide Order dated 19th April, 2018, the Respondent No. 2 preferred an Company Appeal (AT) (Insolvency) No. 309 of 2018 and pleaded that is claim being statutory dues outstanding against the Corporate Debtor and payable by the Corporate Debtor or its successor i.e. RP and or the Successful Resolution Applicant. However, the said appeal came to be dismissed by the Hon'ble NCLAT vide Order dated 20.03.2019. Being arrived with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 4th September, 2020; (ii) Order No. 2791876 dated 4th September, 2020; (iii) Order No. 0002792207 dated 4th September, 2020 and (iv) Order No. 2792221 dated 4th September, 2020. 12. Being aggrieved with the above referred Demand notice, the applicant has preferred the present application. It is also submitted by informing that after taking over the charge of Corporate Debtor the present Applicant and the Resolution Applicant are making payment of all the dues payable to the Respondent No. 1 which are due and payable post 3rd May, 2018. It is contended that subsequent to the Applicant through its Successful Resolution Professional have taken charge of the Corporate Debtor. There remain no obligations in any manner whatsoever, attributable to the Respondent No. 2 (In respect of Sales Tax Department) against the claim of the Corporate Debtor prior to 2nd May, 2018, save and except as provided and committed in the approved Resolution Plan which is binding upon all, claimants, Creditors including Government statutory authorized also. 13. It is submitted that the Applicant is into Fast Moving Consumer Goods ( FMCG ) products and into inter-state sales, purchase and distribution. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of the Respondents under the statutes governing them (in this case, MVAT Act), claims of or debts due to such statutory authorities ought not to be classified under the definition of 'Operational Creditors' under section 5(21) of the Code. In the event the Appeal arising out of the said SLP is allowed, the resolution plan (which is the basis of the present application) will have to be set aside and consequently the application will not survive. Therefore, it has been contended that this Tribunal to defer the hearing of the present application until the Hon'ble Supreme Court decides such appeal pending before it. 17. It is further submitted that though the present application seeks directions (in the nature of a writ of mandamus) against the Department in an application under section 60 of the code. The Applicant has inter alia prayed for a direction to these Respondents to issue C Forms to the Applicant under the Maharashtra Value Added Tax Act ( the MVAT Act ) and for further declaration that the four demands raised by these Respondents dated 04.09.2020, for the periods mentioned therein, are bad in law and ought to be quashed, which Respondents have withheld su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents. The Respondent is having a legitimate claim against the Corporate Debtor's Company. These Respondents are bound to follow and abide by Trade Circulars issued by the Commissioner of Sales Tax, State of Maharashtra, from time to time. I say that the Trade Circulars have the force of law and in any event are binding on these Respondents and submit that non abidance with the same in this matter will amount to wrong precedent. In the present case, the Trade Circular dated 28.01.2014 bearing No Trade Cir No. 4T of 2014 is produced along with the Respondents' reply. And submit that clause 5 of the said trade circular binds/lays guidelines to all officers regarding issuance C form. 5. Internal Verification- After the SOR is uploaded the system will verify, the following four things and the results will be available to the concerned CR officer in the verification report. a. Whether the applicant dealer has filed all the returns for earlier periods. b. Whether the turnover of within state and interstate sales/purchases or, as the case may be, branch transfer/consignment transfer has been disclosed appropriately in the return for the period vis- -vis th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re clearly in contravention with each other and also clearly against the provisions of the Insolvency and Bankruptcy Code, 2016 ( IBC Code ), which is evident from the following facts viz. a. At paragraph No. 3 of the Affidavit in Reply, the Respondents have alleged that this Hon'ble Court does not have jurisdiction to decide the present Application. I say that the Application is moved by the Successful Resolution Processional to make sure that the Resolution Plan carried out its implementation. I say that in view of Section 238 read with the liberty granted by this Tribunal at the time of passing the Order dated 19th April, 2018 in the Miscellaneous Application No. 35 of 2018, this Tribunal have jurisdiction to try, entertain and decide the present Application. b. At Paragraph Nos. 5 and 6 of the Affidavit in Reply, the allegation made by the Respondents that since 24th July, 2017 the Respondents are perusing the Application for the demand due from 2003 till 2017. I say that the Order dated 19th April, 2018 passed in Miscellaneous Application No. 35 of 2018 passed by this Tribunal (which is at page No. 235-266 of the Miscellaneous Application) and the Order dated 20th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th March, 2019 passed by the Hon'ble National Company Law Appellate Tribunal, New Delhi and have sought to question before the Hon'ble Supreme Court, however, till date, no reliefs have been granted to the Respondents. In view of the aforesaid, it is clear that the Respondents have once again sought to re-agitate the purported issues, through the purported demands, which is evident by taking the note of the date of issuance of the purported demand dated 4th September, 2020. e. At paragraph No. 8 of the Affidavit in Reply, the Respondent states that the Trade Circular dated 28th January, 2014 supersede the provision of IBC Code. It is reiterated that the provision of the IBC Code particularly in view of Section 31 read with Section 238 of the IBC Code, supersedes that the trade circular dated 28th January, 2014. In view of the aforesaid and even otherwise, it is evident that the Respondents have sought to raise a purported demand, which are under challenged, in the present Miscellaneous Application. f. It is submitted that the Applicant deals into Fast Moving Consumer Goods, and have huge inter-estate trade and business, hence continuously requires the Forms C othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and therefore retrospective in operation. 88. There is another reason, which persuades us to take the said view. Sub-section (10) of Section 3 of the IB Code defined Creditor thus: (10) Creditor means any person to whom a debt is owed and includes a Financial Creditor, an Operational Creditor, and Secured Creditor, an Unsecured Creditor and a Decree holder. 89. Sub-sections (20) and (21) of Section 5 of the IB Code define Operational Creditor and operational debt respectively as such: (20) Operational Creditor means a person to whom an Operational Debt is owed and includes any person to whom such debt has been legally assigned or transferred: (21) Operational Debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority: 90. Creditor therefore, has been defined to mean any person to whom a debt is owed and includes a Financial Creditor, an Operational Creditor, a Secured Creditor, an Unsecured Creditor and a Decree Holder. Oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffairs and Ors., has also taken a view, that the claim of Operational Creditor will also include a claim of a statutory authority on account of money receivable pursuant to an imposition by a statute. We are in agreement with the views taken by these Courts. 94. Therefore, in our considered view, the aforesaid provisions leave no manner of doubt to hold, that the 2019 amendment is declaratory and clarificatory in nature. We also hold that even if 2019 amendment was not effected, still in the light of the view taken by us, the Central Government, any State Government or any local authority would be bound by the resolution plan, once it is approved by the Adjudicating Authority (i.e. NCLT). Conclusion 95. In the result, we answer the questions framed by us as under: i. That once a Resolution Plan is duly approved by the Adjudicating Authority under Sub-Section (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, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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