Appeal Against Resolution Plan Approval to be Quashed as It Was Fully Executed and No Irregularities Were Found | NCLAT

Case Details: Assistant Commissioner of Central Tax v. Sreenivasa Rao Ravinuthala - [2023] 154 taxmann.com 628 (NCLAT-Chennai)

Judiciary and Counsel Details

• • M. Venugopal, Judicial Member & Shreesha Merla, Technical Member
  • Raj Kumar Jhabakh, Adv. for the Appellant.
  • T.K. Bhaskar, Sr. Adv., Shabeer Ahmed & Varun Mohan, Advs. for the Respondent.

Facts of the Case

In the instant case, the CIRP was initiated against the corporate debtor and resolution plans were received. A resolution plan of the resolution applicant was approved by the CoC of the corporate debtor with majority votes and the same was also approved by the Adjudicating Authority (NCLT) vide the impugned order.

The appellant, Excise Department, filed an instant appeal challenging approval of the said plan on the ground that the corporate debtor owed towards default in payment of Central Excise Duty, interest and penalty as per Central Excise Returns filed with the appellant department and provisions of the said plan only earmarked 0.13% towards Government dues, which was unfair.

It was noted that the resolution plan was fully implemented and the successful resolution applicant had made payments to all creditors of the corporate debtor and almost two years had passed since the approval of the said resolution plan.

NCLAT Held

The NCLAT held that since there was no irregularity in provisions of the resolution plan, there was no tangible and substantial reasons to set the clock back and, thus, the appeal was to be dismissed.

List of Cases Reviewed

• • Sreenivasa Rao Ravinuthala, Resolution Professional for Samyu Glass (P.) Ltd., In re [2023] 154 taxmann.com 627 (NCLT – Hyd.) (para 11) affirmed, [See Annex].
  • STO v. Rainbow Papers Ltd. [2022] 142 taxmann.com 157/174 SCL 250 (SC) (para 8) distinguished.

List of Cases Referred to

• • STO v. Rainbow Papers Ltd. [2022] 142 taxmann.com 157/174 SCL 250 (SC) (para 7)
  • Kalpraj Dharamshi v. Kotak Investment Advisors Ltd. [2021] 125 taxmann.com 194/166 SCL 583 (SC) (para 10).