TMI Blog2023 (10) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... t nor observed that claim of the Income Tax Department stands extinguished. There is one more reason to reject the submission of learned counsel for Respondent No.1 that claim of the Income Tax Department stands extinguished by judgment of Jaypee Kensington. In the impugned order, Para 131 onwards, the Adjudicating Authority has dealt with reliefs and concessions under heading X. Reliefs and Concessions . Para 132 expressly dealt with obligation of the Corporate Debtor vis- -vis Income Tax Department. The Adjudicating Authority held that the Adjudicating Authority is not inclined to grant such a blanket relief - It is made clear that reliefs from Income Tax liabilities have not been granted as prayed by the Successful Resolution Applicant. The claim which was submitted in the proceeding and the Successful Resolution Applicant has very well dealt with claim submitted by the Income Tax Department of Rs.3334.29 Crores. Even if the claim for the AY 2012-13 of Income Tax Department cannot be said to be extinguished, Appellant being an Operational Creditor, the liquidation value of the Income Tax Department is NIL. The payment of Rs.10 Lakhs cannot be said to be violative of provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rim Resolution Professional. (iii) Appellant vide letter dated 26.12.2017 enquired about status of their claim. Interim Resolution Professional vide letter dated 29.01.2018 informed the Assistant Commissioner of Income Tax that with regard to AY 2010-11, the Company has received favourable order and demand has been reduced to NIL. With regard to AY 2012-13, the IRP informed that the same has shown as contingent liability in the books of the Company, which has already filed an appeal before the Income Tax Appellate Tribunal (ITAT). IRP in its letter dated 29.01.2018 stated that liability for the AY 2012-13 does not exist as on date. (iv) The Assistant Commissioner of Income Tax in reply to the letter dated 29.01.2018 of IRP wrote that in AY 2012-13, the demand has been reduced after giving appeal effect. It was stated that showing the amount as contingent liability does not conclude that liability does not exist. (v) The IRP published a list of creditors. (vi) The Hon ble Supreme Court in its judgment dated 09.08.2018 in (2018) 18 SCC 575, Chitra Sharma and Ors. Vs. Union of India and Ors. directed recommencement of CIRP on the date of order. After judgment of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012-13 has been set aside by ITAT whereas appeals were dismissed by order dated 16.01.2023. The payment of Rs.10 Lakhs towards claim of the Income Tax Department is fraud and not in accordance with law. List of creditors prepared by the Resolution Professional has noted submission of the claim by the Appellant. It is submitted that claim was filed by the Appellant with regard to debt which was due. There was no occasion for filing claim for Rs.33,000 Crores as per order dated 31.03.2017 since the said amount was not due and the said amount was revenue subsidy which was spread for 36 years. Rs.33,000 Crores is not amount due and no claim could have been filed for the said amount. It is prayed that appeal be allowed and necessary directions be issued to protect the interest of the Appellant and payment of dues of Income Tax Department to the tune of Rs.1157,07,72,480/- for AY 2012-13, which is the crystallised demand as on date. 4. Shri Sumant Batra, learned counsel appearing for the Implementation and Monitoring Committee submits that the Hon ble Supreme Court in its judgment in Jaypee Kensington (supra) has already approved extinguishment of liability of Rs.33,000 Crores for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be entertained which ought to have been filed in CIRP process. The Resolution Applicant takes the Corporate Debtor on clean slate to avoid hydra head popping up. Copy of the Resolution Plan could not have been shared with the Appellant, which can only be done after approval of the plan. The appellant is not secured creditor of the Corporate Debtor. 5. Learned counsel for the Successful Resolution Applicant submits that when liability of Rs.33,000 Crores has arisen prior to insolvency commencement date which was reduced by judgment dated 31.03.2017, which was well known to the Hon ble Supreme Court while hearing the matter of Jaypee Kensington, Appellant chose to file only part of the claim in Form B for Rs.3334.29 Crores relying on judgment dated 31.03.2017 instead of filing entire claim of Rs.33,000 Crores. Under the IBC, creditors are expected and obliged to file a claim which is much wider to cover its liability so that the Resolution Applicant can deal with it in order to get clean/fresh slate. Treatment provided by the Successful Resolution Applicant to the Appellant was in compliance with Section 30(2) of the Code. Claim under Section 3(6) include claim which is di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.0.10 Cr [Refer clause 21.2 at page 85 of Suraksha Resolution Plan dated 07.06.2021 read with addendum dated 09.06.2021 filed in IA 1603/2022] Total (a+b+c+d+e) Rs.0.40 Cr [Refer (3) in point 7 at page 271 in Form H filed with IA 2836/2021] 4. Public Shareholders Rs.0.14 Cr [Refer clause 24.8 at page 90 of Suraksha Resolution Plan dated 07.06.2021 read with addendum dated 09.06.2021 filed in IA 1603/2022] [Refer point 8 of Form H at page 273 filed with IA 2836/2021] Grand Total (1+2+3+4) Rs.20,363.36 Crore 9. We may notice that above Para refers to insofar as Income Tax Department is concerned to clause 19.3 of the Suraksha Resolution plan. We may also notice Clause 19.3 of Suraksha Resolution Plan. In clause 19 of the Resolution Plan, the Successful Resolution Applicant has detailed claims of the Income Tax Department. Para 19 which contain 19.1, 19.2 and 19.3, is as follows: 19. Claims of Income Tax Department: Disputed Claims of Income Tax : 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in line with in the Jaypee Kensington Judgement, the relevant extract whereof in relation whereto has been reproduced hereinbelow for ready reference: Para 135.1..... In Essar Steel (supra), tulile dealing with the topic 'Extinguishment of Personal Guarantees and Undecided Clains, this Court disapproved that part of the NCLT judgment which held that other claims, that might exist apart from those decided on merits by the resolution professional and by Die Adjudicating Authority/Appellate Tribunal, could be decided in an appropriate forum in terms of Section 60(6) of the Code. This Court specifically held that a resolution applicant cannot be made to suddenly encounter undecided claims after resolution plan submitted by him has been accepted; and in the scheme of the Code, all claims must be submitted to, and decided by, the resolution professional so that the resolution applicant could proceed on a fresh plate. This Court, inter alia, held as under:- 107. 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 Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Claims Admitted (INR crores) Note 1 Yamuna Expressway Industrial Development Authority 23-Aug-17 6,111.6 461.0 1 2 Income tax department 28-Sep-17 3,334.3 - 2 3 Jaiprakash Associates Ltd. (JAL) 23-Aug-17 261.8 - 3 4 SBI capital market Ltd. 24-Aug-17 3.8 2.7 4 5 JIL Information Technology Ltd. 21-Aug-17 0.4 0.4 4 6 Kone Elevator India Private Ltd. 23-Aug-17 0.3 0.0 4 7 IDBI Capital Markets and Securities Ltd. 23-Aug-17 0.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be noted that the same is shown as contingent liability in the books of accounts as the Company has already filed an appeal before Hon'ble ITAT. Thus the said liability does not exists as on date. You are hereby requested to acknowledge the above for non-admissibility of your claim. However, in case of any discrepancy / differences of opinion, you are requested to kindly intimate us. Thanking you, Yours sincerely Anuj Jain Resolution Professional IP Registration no. 1881/IPA-001/IP-P00142/2017-18/10306 (Jaypee Infratech Limited is under Corporate Insolvency Resolution Process of the Insolven and Bankruptcy Code 2016. Its affairs, business and assets are being managed by the Res Professional, Mr Anuj Jain, appointed by the National Company Law Tribunal by order date August 2017 under the provisions of the Code). Copy to: i) The Pr. Commissioner of Income Tax, Noida ii) The Addl. Commissioner of Income Tax, Range-1, Noida 12. From the above it is clear that the IRP never raised any dispute regarding non-submission of claim by the Income Tax Department in Form B. What was communicated to the Department was that claim for AY 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution Plan in case INR 750 Cr along with interest accrued thereon is not made available to JIL. 2. Enforcement Directorate has initiated investigation under the Prevention of Money Laundering Act, 2002 ( PMLA ) against JIL. JIL to be discharged from PMLA and other investigations. NBCC has retained the right to withdraw from its Resolution Plan in case the said relief is not granted. 3. 858 acres of JIL s land was mortgaged with JAL lenders to secure debt of JAL without any consideration or counter guarantee to JIL (Transaction). NBCC has sought relief that 858 acres of mortgaged land shall continue to be vested in JIL free of any mortgage, charge and encumbrance subject to the orders of the Hon ble Supreme Court. Note: In the meanwhile, out of 858 acres, the Hon ble Supreme Court vide order dated 26.2.2020 have set aside mortgage of 758 acres as avoidance transaction. 4. Deemed approval of YEIDA for business transfer Approval of the Adjudicating Authority shall be binding on YEIDA and constitute adequate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To ensure feasibility and viability of this Resolution Plan, YEIDA and other concerned authorities shall extend the concession period (currently 36 years) under the Concession Agreement for an additional period of ten years. 10. Liability to repay of capital cost pertaining to Noida-Greater Noida Expressway This liability shall stand extinguished, on account of failure of YEIDA to allow JIL to collect and retain toll/fee from the users of the Noida-Greater Noida Expressway during the term of the Concession Agreement. 15. Para 39.3 was thus only reproduction of reliefs which was sought by NBCC. In Para 49 of the judgment, Hon ble Supreme Court has made observations regarding the NCLT order which dealt with reliefs and concessions. Para 49 is as follows: 49. Having thus dealt with the relevant objections, the NCLT entered into the fifth segment of its order and generally dealt with the provisions relating to the reliefs and concessions with the observations/ directions as under: - 134. The clauses already covered in the aforesaid discussion will not be discussed again, but as to the clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the resolution applicant is at liberty to proceed in accordance with law. Clause No. 20:- It goes without saying that the IRP will not be held responsible with regard to discharge of his duties during CIR Process. The IRP and the Resolution Applicant will not be liable for any transactions carried out by the ex-management of the corporate debtor. Clause No. 21:- This point has already been dealt with in the above discussion. Clause No. 22:- For the purpose of consolidation of the books of the CD with the resolution applicant, the effective date shall be treated as the first day of the quarter immediately succeeding quarter in which the resolution applicant completes the takeover of the CD. Clause No. 23:- This point is not clear as to whether it is referring to the land of the Corporate Debtor mortgaged to the lenders of JAL, if that is so, since it has been decided by the Honourable Supreme Court, it need not be reiterated. Clause No. 24:- This generalization of cancellation of all agreements cannot be granted unless each transaction is specifically dealt with. Clause No. 25:- The resolution applicant cannot modify the resolution plan once it is app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lenders of JAL stands discharged in terms of the judgment of this Court in Anuj Jain (supra). 217.3. The matters aforesaid, one way or the other, relate to the commercial terms of the resolution plan and carry their own financial implications. 17. Relying of Para 217, Shri Batra submits that the part of the Resolution Plan which did not find favour with the Hon ble Supreme Court for approval has been specifically mentioned which does not refer to claim of the Income Tax Department. 18. Hon ble Supreme Court under Para 225 concluded the matter in following manner: 225. Accordingly, while once again exercising our powers under Article 142 of the Constitution of India to do substantial and complete justice to the parties and in the interest of all the stakeholders of JIL, we conclude on these matters with the following order: 225.1. The matter regarding approval of the resolution plan stands remitted to the Committee of Creditors of JIL and the time for completion of the process relating to CIRP of JIL is extended by another period of 45 days from the date of this judgment. 225.2. We direct the IRP to complete the CIRP within the extended time of 45 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission of learned counsel for Respondent No.1 that claim of the Income Tax Department stands extinguished by judgment of Jaypee Kensington. In the impugned order, Para 131 onwards, the Adjudicating Authority has dealt with reliefs and concessions under heading X. Reliefs and Concessions . Para 132 expressly dealt with obligation of the Corporate Debtor vis- -vis Income Tax Department. The Adjudicating Authority held that the Adjudicating Authority is not inclined to grant such a blanket relief. Para 132 of the order of the Adjudicating Authority is as follows: 132. Nevertheless, we would like to examine each of the reliefs and concessions asked for. The first relief and concession sought in the Annexure- II of the Resolution Plan are: 1. All the existing legal proceedings relating to Income Tax shall stand irrevocably and unconditionally abated, settled and all liability/ obligations of the Corporate Debtor vis-a-vis the Income Tax authority in relation to such matters shall stand extinguished in perpetuity. Through this relief, the SRA is seeking irrevocable and unconditional abatement/settlement in perpetuity of all Income Tax proceedings of the Corporate Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal Authorities on a blanket basis and therefore, the relief is declined. However, the SRA would be at liberty to proceed in accordance with law. 23. The above Paras clearly indicate that reliefs from Income Tax liabilities have not been granted as prayed by the Successful Resolution Applicant. The claim which was submitted in the proceeding and the Successful Resolution Applicant has very well dealt with claim submitted by the Income Tax Department of Rs.3334.29 Crores. Even if the claim for the AY 2012-13 of Income Tax Department cannot be said to be extinguished, Appellant being an Operational Creditor, the liquidation value of the Income Tax Department is NIL. The payment of Rs.10 Lakhs cannot be said to be violative of provisions of Section 30(2)(e). 24. We may also notice that the submission of learned counsel for the Respondent that claim of Rs.33,000 Crores which was crystalized prior to CIRP commencement should be held to be extinguished, which submission cannot be accepted. When the Appellant has not filed any claim for Rs.33,000 Crores in the CIRP process, we cannot accept the submission of learned counsel for the Respondent that the said claim stood extinguishe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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