Once resolution plan was approved all claims which were not a part of plan wouldn’t survive: SC

Case Details: Ruchi Soya Industries Ltd. ETC v. Union of India - [2022] 139 taxmann.com 266 (SC)

Judiciary and Counsel Details

• • B.R. Gavai & S. Ravindra Bhat, JJ.
  • Parag P. Tripathi, Sr. Adv. Rajesh Rawal, Ms Iti Sharma, Simaranjeet Singh, Ms Rhea Dube, Kunal Vaishnav, Ms Misnina, Gautam Talushdev, Anshay Dhatwalia, Advs. & Ashwani Kumar, AOR for the Appellant.
  • Ms Nisha Bagchi, Akshay Amritanshu, Ms Meenakshi Grover, R.K. Verma, Advs. & Mukesh Kumar Maroria, AOR for the Respondent.

Facts of the Case

In the instant case, application u/s 7 for initiation of CIRP in respect of corporate debtor was admitted by the Adjudicating Authority.

After the procedure, as required under the various provisions of the IBC was completed, an application under section 30(6) came to be filed by the Resolution Professional for the grant of approval of the resolution plan of the successful resolution applicant.

The application of the Resolution Professional for the grant of approval of the resolution plan of the successful resolution applicant was allowed. As such, the management of the appellant came to be vested in the successful resolution applicant.

The short point that was involved was whether the claim of the respondent which was admittedly not lodged before the Resolution Professional after public notices were issued under sections 13 and 15 could be considered at this stage.

Supreme Court Held

The Supreme court observed that present appeals were squarely covered by the law laid down by the Court in the case of Ghanashyam Mishra v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237 (SC), wherein it was held that 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.

In view of the aforesaid, it was held that the claim of the respondent, which was not part of the resolution plan, does not survive. The amount deposited by the appellant at the time of admission of the appeals along with interest accrued thereon was directed to be refunded to the appellant. Accordingly, the appeals were allowed.

List of Cases Reviewed

• • Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237 (SC) (para 13) followed.
  • Ruchi Soya Industries Ltd. v. Union of India [2021] 127 taxmann.com 160/167 SCL 399 (Mad.) (para 16 ) affirmed.

List of Cases Referred to

• • Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237 (SC) (para 11).