State Tax Officer vs Hasti Mal Kachhara & Ors. & Ors

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No.1275 & 1276 of 2023

18.02.2026

IN THE MATTER OF: State Tax Officer ...Appellant Versus Hasti Mal Kachhara & Ors. ...Respondents Present: For Appellant : Ms. Aastha Mehta, Ms. Prerana Mohapatra and Ms. Prina Sharma, Advocates For Respondents : Mr. Anuj Tiwari, Mr. Ayush Rajani, Mr. Vaibhav Vats, Mr. Sameer Mishra, Mr. Shalini Basv and Mr. Shivendra Nath Mishra, Advocates for R-1 Mr. Prakhar Tondon, Advocate for SRA/R-5

ORDER

(Hybrid Mode)

1. These twin appeals are preferred by the Sales Tax Department, which,

in essence has challenged the Resolution Plan approved by the Adjudicating

Authority.

2. The minimum facts which are relevant for the current purpose may be

stated:

a) On 12.12.2019, the Committee of Creditors (CoC) approved the

Resolution Plan.

b) About two years thereafter, on 03.11.2021 to be precise, the appellant

herein had preferred a claim for Rs. 1,33,51,382, based on an

assessment made during the moratorium period. On 24.11.2021, the

Resolution Professional (RP) has rejected the said claim on the ground of delay. The appellant did not challenge it before the Adjudicating

Authoirty.

c) Be that as it may, on CoC approving the Resolution Plan, RP has

taken out MA 4129 of 2018 before the Adjudicating Authority for the

latter's approval to the plan. The SRA filed IANo. 904 of 2021 for

concessions and waivers in its order the Adjudicating Authority had

merely apply the clean slate theory.By a common Order, dated,

11.08.2023, the Adjudicating Authority granted approval to the plan.

So far as I.A.904 of 2021 is concerned, the Adjudicating Authority

merely reiterated the clean slate theory.

Aggrieved by the twin orders passed in MA 4129 of 2019 and IA No. 904

of 2021, the Appellant approached this Tribunal.

3. Heard both sides. The learned counsel for the appellant submitted

that even though the Appellant has not chosen to challenge RP's

proceedings dated 24.11.2021 rejecting the appellant's claim as belated

before the Adjudicating Authority, yet on the strength of the ratio in Sales

Tax Officer Vs Rainbow Papers Limited, [2022 SCC Online SC 1162], the

appellant's claim, being Government dues cannot be rejected.

4. We are not impressed with the submissions of the learned counsel.

When appellant's claim was rejected by the RP, it had all the opportunity to

challenge the same before the Adjudicating Authority, something which the

appellant in Rainbow Papers case did which the appellant herein omitted

to do. The law aids the one who is vigilant. In Rainbow Papers case even

2 of 3 as the Hon'ble Supreme Court had expressed its displeasure over the

resolution plans that ignores dues to the Government, it is till not an

authority for reopening a resolution plan for the benefit of one who is proved

to have been lackadaisical in approaching the judicial fora. And if this

tribunal were to countenance such lackadaisical attitude of the

governmental department in not even caring to challenge a proceeding of the

RP when it had the opportunity to challenge, then no resolution plan will be

safe nor any insolvency resolution process could ever conclude.

5. Today the plan is approved, and we cannot reopen the plan to

accommodate the prayer of the appellant. Lethargy before the judicial forum

does not always accommodate leniency especially when it halts and holds

the interest of stakeholders to the resolution process to ransom.

6. Having stated thus, if the resolution plan has reserved any amount

towards contingent claims, and the same amount is still available, the SRA

may consider the claim of the Appellant.

7. Subject to what we have stated in para 6 these appeals are dismissed.

No cost.

Justice N Seshasayee Member (Judicial)

Arun Baroka Member (Technical) rashmi/beena

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