Resolution plan approved by CoC is binding on all stakeholders and commercial decision of CoC can’t be interfered with

Case details: Deputy Commissioner, CGST Kalol, Gujarat v. Gopala Polyplast Ltd - [2021] 129 taxmann.com 312 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Justice A.I.S Cheema, Officiating Chairperson and Dr. Alok Srivastava, Technical Member.
  • Sonu Bhatnagar, Sr. Adv., Vaibhav Joshi, Ms. Mallika Joshi and Venus Mehrotra, Advs. for the Appellant.
  • Jaimin R. Dave, Adv. for the Respondent.

Facts of the Case

In the instant case, During the Corporate Insolvency Resolution Process (CIRP) of the respondent, appellant-operational creditor on behalf of CGST, ‘Department of Goods and Services Tax’ had filed a claim of outstanding GST dues recoverable from the corporate debtor.

NCLT Held

The Appellant stated that the claim was admitted to extent of a sum. However, the Resolution Plan approved by the Committee of Creditors had made provision of a meagre sum as full and final settlement of the dues of the appellant. The Adjudicating Authority (NCLT) by impugned order approved the Resolution Plan.

On appeal, the appellant stated that the amount approved for the appellant-operational creditor was too insufficient considering the outstanding claim. The appellant, thus, submitted that the Resolution Plan as approved was required to be interfered with.

Dismissing the appeal, the Appellate Tribunal observed that the Resolution Plan approved is binding on the Central Government, State Government, any local authority, Guarantors, and other stakeholders. Sufficiency or insufficiency of the amount is a matter of the Commercial Decision of the Committee of Creditors. It would not be appropriate on part of the Appellate Tribunal to interfere in the same. As such, the appeal did not make out any ground to admit the same.

Case Review

• • Vikash G. Jain v. Gopala Polyplast Ltd. [2020] 120 taxmann.com 273 (para 6) affirmed.
  • Ghanshyam Mishra & Sons (P.) Ltd.v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132 (SC) (para 5) followed.

List of Cases Referred to

• • Ghanshyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132 (SC) (para 4).