Department Of Goods & Service Tax vs Technova Plastic Industries Private ...

Department of Goods & Service Tax, ....Appellant Deputy Commissioner of CGST, Kadi.

Vs.

Technovaa Plastic Industries Pvt. Ltd. ... Respondent No. 1 Survey No. 1256 & 1261, Raipur Zulasan Road, Kadi, Mahesana, Gujarat - 382715

Mr. Vijay P. Lulla, ...Respondent No. 2 Resolution Professional of Technovaa Plastic Industries Pvt. Ltd., 201, Satchitanand Bldg., 12th Road, Khar (W), Mumbai-400052

Present:-

For Appellant:- Mr. Vaibhav Joshi, Advocate.

For Respondent:- Mr. V. Sivasubramanian, Advocate for R-1, Mr. Nipum Singhvi, Advocate (Erstwhile RP, R-2) Mr. Mayur Jugtawat, Advocate (R-2)

JUDGMENT

(Date: 06.12.2021) (Virtual Mode)

[Per: Dr. Alok Srivastava, Member (Technical)]

This appeal has been filed under Section 61 of the

Insolvency and Bankruptcy Code, 2016 (hereinafter called „IBC‟) Company Appeal (AT) (Ins.) No. 474 of 2021 Page 1 of 9 by the Appellant, who is aggrieved by the order dated 4.9.2020

(hereinafter called „Impugned Order‟) in Company Petition No.

(IB)-189 of 2018 passed by the Adjudicating Authority (National

Company Law Tribunal, Ahmedabad), whereby the application of

the then Resolution Professional under Section 30(6) of the IBC

has been allowed without considering the claim of the Appellant.

2. The facts of the case are that the Corporate Insolvency

Resolution Process (in short „CIRP‟) was initiated against the

Corporate Debtor (Technovaa Plastic Industries Pvt. Ltd.) on

12.11.2018, whereafter the Resolution Professional made a public

announcement inviting claims. The ninety-day period that is

permitted under Regulation 12 of Insolvency and Bankruptcy

Board of India (Insolvency Resolution Process for Corporate

Persons) Regulations ended on 19.2.2019, during which the

creditors can file proof of their claims. The Appellant filed his

claim for Rs. 81,50,13,952 on 1.1.2020 which was rejected by the

Resolution Professional(in short „RP‟) vide letter dated 3.1.2020.

The resolution plan was approved with 100% votes by the

Committee of Creditors (in short „CoC‟) and submitted by the RP

for approval of the Adjudicating Authority on 4.10.2019. After

due consideration, the Adjudicating Authority approved the

Resolution Plan vide order dated 4.9.2020.

Company Appeal (AT) (Ins.) No. 474 of 2021 Page 2 of 9

3. The Appellant has claimed that his total claim for

Rs.82,50,32,950 included six claims out of which one claim of

Rs.6,12,68,709 was compromised under "Sabka Vishwas" scheme

and therefore, the remaining debt of Rs.76,37,63,343 remains to

be paid by the Respondents. The Appellant has claimed that the

Adjudicating Authority, in para 7 of the Impugned Order, has

allowed his claim to be considered while distributing the amount

to the Operational Creditors in the same proportion as applicable

to the other Operational Creditors.

4. During the pendency of appeal, the erstwhile RP as head of

the Steering Committee was allowed to be arrayed as Respondent

No. 2 in the appeal. The erstwhile RP was also directed to place

on record documents to show when the claim of the Appellant

was rejected and conveyed to him and to also clarify if the claim

of the Appellant was part of the Resolution Plan. Thereafter the

Respondent No. 2 Mr. Vijay P. Lulla, the erstwhile RP, submitted

an affidavit vide diary No. 30107 dated 28.9.2021 to provide facts

relating to the date of submission of claim by the Appellant, the

date of rejection of said claim and whether the claim of the

Appellant was part of the Resolution Plan.

5. We heard the oral arguments of the Learned Counsel of the

Appellant and Respondents No. 1 and 2. The pleadings

Company Appeal (AT) (Ins.) No. 474 of 2021 Page 3 of 9 submitted by the parties as well as Written Submissions have

been duly considered by us.

6. The Learned Counsel for Appellant has claimed that the

Adjudicating Authority has directed that the RP should consider

the claims made in IA No. 88 of 2020, 89 of 2020 and 61 of 2020

while distributing the amount to the Operational Creditors in the

same proportion as applicable to other operational creditors. He

has further claimed that the amount relating to pending dues of

GST for five years amounting to Rs. 76,37,63,342 ought to have

been considered out of his total claim of Rs.82,50,32,952 made as

being part of statutory dues. He has clarified that out of the total

claim made on 1.1.2020, a claim of Rs.6,12,68,709 was

compromised under „Subka Viswas‟ Scheme for that year and

discharge certificate was issued to the erstwhile Corporate

Debtor. He has, further argued that he submitted his claim while

the Resolution Plan was pending for approval before the

Adjudicating Authority and hence it should have been considered

for payment upto an extent of 2.17%, as was allowed under the

Resolution Plan to the statutory creditors.

7. The Learned Counsel for Respondent No. 1 i.e. Successful

Resolution Applicant has argued that 90-day period, which is

allowed under Regulation 12 of Insolvency and Bankruptcy Board

Company Appeal (AT) (Ins.) No. 474 of 2021 Page 4 of 9 of India (Insolvency Resolution Process for Corporate Persons)

Regulations, 2016 for submission of proof of claims expired on

9.2.2019. After due process of calling for resolution plans by

prospective applicants, the Resolution Plan cleared by the CoC

was submitted for approval of the Adjudicating Authority on

4.10.2019. The claim filed by the Appellant was much after this

date, on 1.1.2020. He has adverted to the judgments of Hon‟ble

Supreme Court in the Committee of Creditors of Essar Steel

India Limited (through authorized signatory) v. Satish Kumar

Gupta and Others, (2020) 8 SCC 531 case and Ghanashyam

Mishra & Sons (P) Ltd. v Edelweiss Asset Reconstruction Co.

Ltd. 2021 SCC Online 313 case to strongly argue that once the

Resolution Plan has been finalized and has been approved by the

CoC as well as the Adjudicating Authority it cannot be reopened

so that the resolution process achieve finality in a time bound

fashion. He has also stated that the Successful Resolution

Applicant has implemented the approved Resolution Plan. As a

further clarification, he has stated that the proposal under "Sab

ka Vishwas‟ Scheme was filed by the erstwhile management of the

Corporate Debtor and not by the Resolution Professional or

Successful Resolution Applicant and the discharge given in one

case was to the erstwhile management of the Corporate Debtor.

Therefore any pending dues are to be paid by the erstwhile Company Appeal (AT) (Ins.) No. 474 of 2021 Page 5 of 9 management of the corporate debtor. He has strongly urged that

in the circumstances stated by him, the appeal may be rejected.

8. The Learned Counsel for erstwhile Resolution Professional

and head of the Steering Committee has also argued that 90 days‟

time period available to the creditors to file their claims along

with proof ended on 9.2.2019, whereas the claim was received by

the erstwhile Resolution Professional on 1.1.2019, which was

rejected by the Resolution Professional vide letter dated 3.1.2020.

He has also clarified that the claim of the Appellant is not part of

the Resolution Plan as same was filed belatedly and rejected by

the Resolution Professional. The affidavit filed by Respondent No.

2 upon direction by this Tribunal on 16.7.2021 is at diary No.

30107 dated 28.9.2020 which explains the complete situation.

9. The issue in this appeal is whether the claim filed by the

Appellant is within the time period specified in the public

announcement and the extended time period of 90 days included

in Regulation 12 of the Insolvency and Bankruptcy Board of India

(Insolvency Resolution Process for Corporate Persons)

Regulations, 2016 and whether a claim, if filed after the specified

time period, could be considered at this belated stage.

10. It is admitted by the Appellant that he filed the claim on

1.1.2020. The affidavit submitted by erstwhile RP Respondent Company Appeal (AT) (Ins.) No. 474 of 2021 Page 6 of 9 No. 2 (diary no. 30107 dated 20.8.2021) makes it clear that the

90 days‟ period after the public announcement as allowed in the

CIRP Regulations (supra) for filing proof of claims expired on

9.2.2019. Moreover the RP vide letter dated 3.1.2020

communicated to the Appellant the fact of rejection of his claim

and also that the Resolution Plan is already under consideration

of the Adjudicating Authority. Therefore, the fact of rejection of

his claim was within the knowledge of Appellant from 3.1.2020.

It is noted that the Resolution Plan was submitted for approval to

the Adjudicating Authority on 4.9.2020, which was much before

the claim was filed by the Appellant. The erstwhile RP has stated

in his additional affidavit (supra) that the claim of the Appellant

did not form part of the Resolution Plan as it was filed belatedly

and rejected by the Resolution Professional.

11. It has also come to our knowledge during oral arguments

that Successful Resolution Professional has implemented the

Resolution Plan. The Learned Counsel for Appellant has referred

to the judgment of Hon‟ble Apex Court in the matter of

Ghanashyam Mishra and Sons (Pvt) Limited (supra). Relevant

portion of this judgment is reproduced below:-

95. In the result, we answer the questions framed by us as under:

Company Appeal (AT) (Ins.) No. 474 of 2021 Page 7 of 9

(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 resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect of a claim, which is not part of the resolution plan;

(ii) 2019 amendment to section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect;

(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 in respect of such dues for the period prior to the date on which the adjudicating Authority grants its approval under Section 31 could be continued."

12. In the case of Committee of Creditors of Essar

Steel India Limited through Authorised Signatory

(supra), relevant portion of this judgment is reproduced below:-

"107. ........A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as 65 this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All 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 Company Appeal (AT) (Ins.) No. 474 of 2021 Page 8 of 9 resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, NCLAT judgment must also be set aside on this count."

13. In the situation as discussed above, we are of the very clear

view that the Resolution Plan as approved by the Adjudicating

Authority, and which does not include the claim of Appellant

since it was filed much belatedly, does not need any interference.

We, therefore, reject the appeal. No order as to costs.

(Justice Ashok Bhushan) Chairperson

(Justice Jarat Kumar Jain) Member (Judicial)

(Dr. Alok Srivastava) Member (Technical) New Delhi

6th December, 2021

/aks/

Company Appeal (AT) (Ins.) No. 474 of 2021 Page 9 of 9