AI Structured Summary
Not yet generated for this judgment
Judgment
This petition has been filed by the petitioner under Article 226 of the Constitution of India for the following relief:-
"a)to issue a writ in the nature of certiorari quashing the impugned order dated 26-12-2011 Annexure P-9 passed by the Collector, Singrauli directing the petitioner to pay compensation to respondent No. 3 for his remaining 1.700 hectare of land treating the same to be irrigated land and that too from out of the rehabilitation and resettlement funds;
b)to grant any other relief as may be deemed fit in the facts and circumstances of the case including costs of the petition."
The facts of the case are that the petitioner company is a part of the ESSAR group and is engaged in the business of generating and supplying electrical energy. The Company wanted to acquire some land for establishing and operating a thermal power project in the State of M.P. Upon receiving the proposal from the petitioner, the Collector, Sidhi started land acquisition proceedings as provided under Section 41 of the Land Acquisition Act, 1894 (hereinafter referred to as the Act, 1894). Thereafter, a memorandum of understanding was executed between the petitioner and the State Government on 17-01-2007 for purposes of setting up of the Power Project of the petitioner. In the memorandum, it was inter alia provided that the petitioner shall prepare rehabilitation and resettlement plan for the project as per the prevalent policy of the State Government and implement rehabilitation and resettlement of the project affected persons accordingly and shall bear all costs related to such rehabilitation and resettlement. Subsequently, another agreement - Annexure P-1 was executed between the petitioner and the State Government on 18-10-2008 in view of Section 41 of the Act, 1894. This agreement was also for purposes of grant of rehabilitation and resettlement benefits of the Model Rehabilitation Scheme of the year 2002 of the State Government (Annexpre P/2) to the displaced persons. In the process of acquisition of land for setting up of Power Plant of the petitioner, Khasra No.-1196 area 1.34 acre, Khasra No. 1196 area 0.25 acre, Khasra No. 428 area 0.26 acre, Khasra No. 428 area 0.10 acre and Khasra No.4 Sasori rarea, 0.05 acre Mouja Nagwan, Tahsil and District Singrauli held by respondent No. 3 were also acquired. Thereafter, the process of determination of compensation payable to respondent No.3 was initiated under the provisions of the Act, 1894 in which respondent No. 3 remained ex parte. Eventually, award was passed by the Land Acquisition Officer on 20-01-2009 which was approved by the Commissioner. In the award respondent No. 3 was held entitled for payment of compensation (Annexure P/3). Payment of the amount of compensation was made to respondent No. 3 vide different cheques all dated 21-07-2010 (Annexure P-4). The respondent No. 3 then filed an application Annexure P-5 before the Collector, District Singrauli for inspection of his acquired land and for recording his un-irrigated lands as irrigated land. Thereafter by order dated 09-07-2010, Annexure P-7, the Collector, District Singrauli directed the petitioner to pay compensation to respondent No. 3 by treating his 1.950 hectare of land to be irrigated land. Such compensation was directed to be paid out of the rehabilitation and resettlement funds. On reply dated 8.11.2011 (Annexure P/8) to the aforesaid order, the Collector passed another order dated 26.12.2011 (Annexure P/9) directing the petitioner to pay the difference of amount of compensation to respondent No. 3 treating his lands to be irrigated and that too from out of the Rehabilitation and resettlement funds. Hence, this petition.
Learned Counsel for the petitioner submits that if respondent No. 3 was aggrieved by the amount of compensation determined in the award, his only remedy was to file an application under Section 18 of the Act, 1894 before the Collector for making a reference to the civil Court for determination of the amount of determination. He however did not do so within the prescribed period of limitation and it was not permissible for him to bypass the prescribed procedure and seek enhancement of the compensation as has been done by him. Even if the application filed by respondent No. 3 before the Collector is treated to be an application under Section 18 of the Act 1894, then also the same is barred by time not having been made within a period of six months from the date of passing of the award on 20-01-2009 hence could not have been entertained. The observation of the Collector that respondent No. 3 can be permitted to seek amendment in the award even if he has not filed any application under Section 18 is wholly illegal, as specific procedure for seeking enhancement of the amount of compensation determined has been provided under the Land Acquisition Act,1894, any enhancement of compensation can be sought for and granted only as per such procedure and by not any other method by invoking the principles of natural justice. As the respondent No.3 had already taken the compensation without any protest as determined in the award, hence, the Collector hence could not have enhanced the amount of compensation determined since after passing of the award he was functus officio with respect to the same. Counsel for the petitioner has also relied on some Judgments of Hon'ble Apex Court in support of his contention.
Counsel for the State has opposed the submission of learned Counsel for the petitioner by stating that it is rightly recorded by the Rehabilitation Officer that apparent injustice has been caused to the respondent no. 3 while granting him compensation only for 0.25 Hac. of land instead of 1.95 Hac. irrigated land. It is also a justified logic that when the error committed by the Land Acquisition Officer while determining the award is apparent, same can be corrected even without compelling the beneficiary to the cumbersome process envisaged under section 18 of the Act. Therefore, the order impugned being based upon equitable considerations, deserves to be upheld by this Hon’ble Court.
Counsel for respondent No.3 has also opposed the submission of Counsel for the petitioner stating that the Collector has by a well reasoned order awarded compensation to the answering respondent. There is no iota of doubt that the land belonging to the petitioner was an irrigated land and by mistake the compensation was assessed at the rate of un-irrigated land. The collector is fully competent to correct clerical errors or mistakes in the award. Section 21 of the General Clauses Act, 1897 also gives the Collector the power of amending his own order. Section 21 of the Land Acquisition Act also provides that the scope of the inquiry in every such proceeding shall be restricted to a consideration of the interests of the persons affected by the objection. Thus the interests of the land owners are paramount. Hence, the petition deserves to be dismissed.
Counsel for the petitioner has made two-fold submission that once the award has been passed, that becomes final under section 12 and only clerical or arithmetical errors can be corrected under Section 13-A of Land Acquisition Act, that too within limitation of six months. As the order of correction has been passed on 26/12/2011 beyond the statutory time period. It is further submitted that there is no power of review provided under the Land Acquisition Act. In fact, the reference is made under section 18 of the Act to the civil court on the application submitted by the person refused to accept the award. It is also submitted the NCLT, on invocation of the proceeding under 'The Insolvency and Bankruptcy Code, 2016', (hereinafter referred to as 'the IBC') has passed an order (Annexure P/10), approved the Resolution - Annexure P/11, according to which no liability to pay any compensation has been referred in the resolution. Therefore, as per the provision of section 31 of the IBC, approved resolution is final and as provisions of the IBC under section 238 is having overriding effect on any other law, no claim is admitted thereafter. To bolster his submission, he has relied on Judgments passed by Hon'ble Supreme Court in the cases of Ghanshyam Mishra and Sons Private Ltd. v. Edelweiss Asset Reconstruction Company Ltd. [2021 (9) SCC 657], Committee of Credits of Essar Steel India Ltd. v. Satish Kumar Gupta [2020 (8) SCC 531, Ruchi Soya Industries Ltd. vs. Union of India [2022 (6) SCC 343, Electrosteel Steel Ltd. Vs. Ispat Carrier Pvt. Ltd. [2025 SCC Online SC 829], JSW Steel Limited vs. Pratishtha Thakur Haritwal & Others [2025 SCC Online SC 672], Adani Power Ltd. Vs. Shapoorji Pallonji & Co. Pvt. Ltd. [2023 SCC Online SC 2377], RPS Infrastructure Ltd. Vs. Mukul Kumar & another [2023 (10) SCC 718], Ajay Kumar Radheyshyam Goenka Vs. TFCI Ltd. [2023 (10) SCC 545].
Per contra, learned Counsel for the respondent has submitted that the award under the Land Acquisition Act (for brevity 'Act of 1894') was passed on 20.1.2009 and the order for correction of the award has been passed on 9.7.2010, against which no process, no petition or proceedings has been initiated and as such the order dated 9.7.2010 has attained finality. Order dated 9.7.2010 was well within six months as provided under Section 13 (e). Learned counsel for the respondent has also passed on board the certified copies of the proceedings initiated for correction of the award. The correction was sought only because at the time of calculation of compensation, the portion of the land of the petitioner has been assessed as unirrigated land. However, on application being filed (Annexure P/5), the portion of the land of the petitioner has been recorded as an irrigated land and due to such change in the nature of the land, the calculation and the rate of the land for the purpose of award of compensation has been changed, for which the application was filed, and in the proceeding the enquiry was conducted and recommendation was made to correct the quantum of the award, and accordingly, the order dated 9/7/2010 came to be passed. However, when the company has not paid the enhanced amount of compensation, the reminders were sent to the company, which is reflected from the order-sheets and Note-sheets of the proceedings and finally again the order was passed on to 26/12/2011. However, from perusal of the order, it is not found that such an order has been passed under section 13-A. As the order has been passed to execute the earlier order dated 9/7/2010, which was found to be passed under section 13A for correcting the award of compensation.
The counsel for the petitioner has submitted that as the proceedings have been initiated under the IBC and the resolution of corporate insolvency resolution process has been initiated and the resolution was approved by the orders of the NCLT dated 01/11/2021 (Annexure P/10), according to which as per the Resolution, the petitioner is liable to pay the amount which he has paid and in the said resolution, after due invitation of objection, no objection was received from the respondent for payment of enhanced amount of compensation. Therefore, as per the definition of the creditor under section 3 (10), the respondent is not covered, and as per section 31, the petitioner is not liable to make any payment as the IBC is having overriding effect over all other provisions inconsistent with the IBC. For the ready reference, section 3(10), section 31 and section 238 are reproduced hereunder:-
"3(10). “creditor” means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder;"
"(31). Approval of resolution plan.—(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, 2 [including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,] guarantors and other 3 stakeholders involved in the resolution plan. [Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.] (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (1),—
the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and
the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. 4 [(4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later: Provided that where the resolution plan contains a provision for combination, as referred to in section 5 of the Competition Act, 2002 (12 of 2003), the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors.]"
"238.Provisions of this Code to override other laws.—The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law."
The Counsel submits that once the resolution is accepted and approved by the NCLT, no other dues can be accepted against the petitioner Company.
Heard learned Counsel for the parties and perused the record.
From the above discussion of facts two legal questions which emerge are that whether the competent authority is having jurisdiction to review its own award passed under the provisions of Land Acquisition Act, 1894 (hereinafter referred to as Act, 1894), secondly resolution plan approved by the adjudicating authority under Section 31 of IBC, 2016, any due or claim not made in the resolution plan to be addressed, can be given effect to after implementation of the plan.
To answer the first question, the provision of law which is applicable and deserves consideration is Section 13 A, which empowers the competent authority to correct its award to the extent of clerical and arithmetic mistakes. Section 18 provides for the mechanism that if the person in whose favour the award has been passed, has not accepted the award, may make an application on the ground mentioned therein. From the perusal of the order, it is transpired that the order came to be passed on the application filed by the respondent No.3 that the compensation for his land has been awarded considering the land to be un-irrigated land, as same was not correct. Therefore, on application it was corrected by the revenue authority, thereafter on the basis of said, application was filed to correct the award. When such irregularity has been found by the competent authority, same was corrected by the authority by exercising power under Section 13 A of Act, 1894 by recalculating and reassessing the amount of compensation as per the rates of irrigated land.
It is not the case of the petitioner that the order passed by the revenue authorities declaring the land to be irrigated has been challenged before any revenue authority. In fact, it has become final and on the basis of said order, the land ought to have been recorded as irrigated land. Therefore, any compensation awarded treating the land to be unirrigated was definitely an error which was required to be corrected. As the quasi judicial authority correcting the nature of the land by the order which was never challenged by the petitioner became final, therefore, the competent authority under the Land Acquisition Act was only required to correct the arithmetic errors of the award by changing the rate of the land from unirrigated to irrigated land and such order came to be passed by the competent authority on 9.7. 2010.
Section 13A of the Land Acquisition Act provides us under:-
"[13A. Correction of clerical errors, etc. - (1) The Collector may, at any time but not later than six months from the date of the award, or where he has been required under section 18 to make a reference to the Court, before the making of such reference, by order, correct any clerical or arithmetical mistakes in the award or errors arising therein either on his own motion or on the application of any person interested or a local authority: Provided that no correction, which is likely to affect prejudicially any person, shall be made unless such person has been given a reasonable opportunity of making a representation in the matter.
(2)The Collector shall give immediate notice of any correction made in the award to all the persons interested.
(3)Where any excess amount is proved to have been paid to any person as a result of the correction made under sub-section (1), the excess amount so paid shall be liable to be refunded and in the case of any default or refusal to pay, the same may be recovered as an arrear of land revenue.]"
On bare reading of the provision, it is clear that such section has been inserted with an object that any error which has been caused in the award can be corrected by the Collector within six months from the date of award. It also provides that where it finds that it can be referred to the civil court under section 18, but before making such a reference, the error can be corrected. Therefore, in the considered opinion of this court, wide power has been conferred upon the competent authority to reassess, recalculate the compensation already granted on the basis of incorrect facts. In the present case in hand, the said correction was found to be on the basis of change of nature of the land from unirrigated to irrigated and there is no such adjudication of the rival rights of the parties. Therefore, such correction could have been done by the competent authority and it is held that it has rightly been done. Now, the question of limitation in regard to the award passed by the competent authority when it has been looked into, it was found that the order dated 9-7-2010 was passed directing the erst-while company Essar Power Ltd to make payment according to rates of irrigated land. However, when such order was not challenged and not given effect to, the competent authority has again passed an order dated 26-12-2011. As per averments of petitioner which are not denied by respondent, the award was passed on 20-1-2009. Therefore, admittedly, the order dated 9-7-2010 was passed beyond the period of 6 months, which could not have been passed beyond the period of limitation prescribed under the Act. Thus, it is not sustainable in the eyes of law. The authority was not having jurisdiction to pass such an order beyond the prescribed time provided under the law.
Now, the question in regard to whether the provisions of IBC having overriding effect and if the resolution plan is approved under Section 31, the corporate debtor/resolution applicant is liable to make payment of compensation, held to be due and under challenge in the judicial proceedings. Admittedly, the compensation awarded by the competent authority was under challenge in the writ petition before this court and the said plan was approved by the NCLT vide order dated 1.11.2021. The present petition was filed in the year 2012. Therefore, now when the definition clause as referred to by the petitioner is considered, then it was found that under Section 3(10) of the IBC, creditor means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and decree holder. The debt is defined under Section 3(11) of the IBC. The debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. As 'operational debt' is defined in Section 5(21) of the IBC, according to which a claim in respect of the provisions of the goods or services including employment or debt in respect of the payment of dues arising under any law for time in force and payable to the Central Government, any State Government or any local authority. Section 6 of the IBC provides that where any corporate debtor commits a default (in present case the erstwhile company of the petitioner), a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate debtor in the manner as provided under this chapter. On perusal of the cause title of the Company Petition No.(IB) 863 (PB)/2020, it is found that the said initiation was done by several operational and financial creditors but not by the corporate debtor. As the corporate debtor was very well known to the fact that present writ petition may result into any liability, therefore he ought to have made such declaration. Section 7,8,9 of 'The Insolvency and Bankruptcy Code, 2016' provide the process of initiation of corporate insolvencies resolution process by financial creditor and operational creditor. Section 15 of the IBC provides for public announcement of corporate insolvency resolution process which also provides that name and address of the corporate debtor.
Section 15 of 'IBC, 2016' reads as under:-
“15. Public announcement of corporate insolvency resolution process.—
(1)The public announcement of the corporate insolvency resolution process under the order referred to in section 13 shall contain the following information, namely:—
"(a)name and address of the corporate debtor under the corporate insolvency resolution process;
(b)--------------------
(c)the last date for submission of 1 [claims, as may be specified];”
Claims are defined in Section 3 sub section 6 of the IBC, which are as under:-
“(6)“claim” means— (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured;”
Section 16 of the IBC provides appointment of tenure of interim resolution professional. Section 17 of the IBC provides management of affairs of corporate debtor by interim resolution professional.
Section 18 of the IBC provides duty of interim resolution professional, which also include receive and collate all the claims submitted by creditors and on receiving such collation of all claims received against corporate debtor, the interim resolution professional shall constitute a committee of creditors. The committee of creditors shall comprise all financial creditors of the corporate debtor. Then the committee under section 20 is empowered to appoint resolution professional and such professional is required to conduct a corporate insolvency resolution process under section 23 and then resolution applicant may submit a resolution plan. On the basis of information of memorandum prepared u/s 29 and submission of such plan the adjudicating authorities may approve such plan approved by the committee of creditors under section 30 if it meets the requirement as referred to under sub-section 2 of section 30, which shall be binding on the corporate debtor and its employee, members, creditors including the Central Government, any State Government or any local authority to whom a debt in respect of payment of due arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stake holders involved in the resolution plan. To bolster his submissions, counsel for petitioner relied upon judgments of the Hon'ble Apex court in the case of Ghanshyam Mishra and Sons Private Ltd. v. Edelweiss Asset Reconstruction Company Ltd. [2021 (9) SCC 657], Committee of Credits of Essar Steel India Ltd. v. Satish KUmar Gupta [2020 (8) SCC 531], Ruchi Soya Industries Ltd. vs. Union of India [2022 (6) SCC 343], Electrosteel Steel Ltd. Vs. Ispat Carrier Pvt. Ltd. [2025 SCC Online SC 829], JSW Steel Limited vs. Pratishtha Thakur Haritwal & Others [2025 SCC Online SC 672], Adani Power Ltd. Vs. Shapoorji Pallonji & Co. Pvt. Ltd. [2023 SCC Online SC 2377], RPS Infrastructure Ltd. Vs. Mukul Kumar & another [2023 (10) SCC 718], Ajay Kumar Radheyshyam Goenka Vs. TFCI Ltd. [2023 (10) SCC 545].
The Hon’ble Apex Court in the case of Ghanshyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 , has held as under:-
“65.Bare reading of Section 31 of the I&B Code would also make it abundantly clear that once the resolution plan is approved by the adjudicating authority, after it is satisfied, that the resolution plan as approved by CoC meets the requirements as referred to in sub-section (2) of Section 30, it shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders. Such a provision is necessitated since one of the dominant purposes of the I&B Code is revival of the corporate debtor and to make it a running concern.”
“68.All these details are required to be contained in the information memorandum so that the resolution applicant is aware as to what are the liabilities that he may have to face and provide for a plan, which apart from satisfying a part of such liabilities would also ensure, that the corporate debtor is revived and made a running establishment. The legislative intent of making the resolution plan binding on all the stakeholders after it gets the seal of approval from the adjudicating authority upon its satisfaction, that the resolution plan approved by CoC meets the requirement as referred to in sub-section (2) of Section 30 is that after the approval of the resolution plan, no surprise claims should be flung on the successful resolution applicant. The dominant purpose is that he should start with fresh slate on the basis of the resolution plan approved.”
“69.This aspect has been aptly explained by this Court in Essar Steel (India) Ltd. (CoC) [Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta, (2020) 8 SCC 531 : (2021) 2 SCC (Civ) 443] : (SCC p. 616, para 107)
“107.For the same reason, the impugned NCLAT judgment in Standard Chartered Bank v. Satish Kumar Gupta [Standard Chartered Bank v. Satish Kumar Gupta, 2019 SCC OnLine NCLAT 388] in holding that claims that may exist apart from those decided on merits by the resolution professional and by the adjudicating authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with “undecided” claims after the resolution plan submitted by him has been accepted as 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 resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, NCLAT judgment [Standard Chartered Bank v. Satish Kumar Gupta, 2019 SCC OnLine NCLAT 388] must also be set aside on this count.”
“71.As held by this Court in CIT v. Monnet Ispat & Energy Ltd. [CIT v. Monnet Ispat & Energy Ltd., (2018) 18 SCC 786 : (2019) 3 SCC (Civ) 252] , in view of the provisions of Section 238 of the I&B Code, the provisions thereof will have an overriding effect, if there is any inconsistency with any of the provisions of the law for the time being in force or any instrument having effect by virtue of any such law. As such, the observations made by NCLAT to the aforesaid effect, if permitted to remain, would frustrate the very purpose for which the I&B Code is enacted.”
“93.As discussed hereinabove, one of the principal objects of the I&B Code is providing for revival of the corporate debtor and to make it a going concern. The I&B Code is a complete Code in itself. Upon admission of petition under Section 7 there are various important duties and functions entrusted to RP and CoC. RP is required to issue a publication inviting claims from all the stakeholders. He is required to collate the said information and submit necessary details in the information memorandum. The resolution applicants submit their plans on the basis of the details provided in the information memorandum. The resolution plans undergo deep scrutiny by RP as well as CoC. In the negotiations that may be held between CoC and the resolution applicant, various modifications may be made so as to ensure that while paying part of the dues of financial creditors as well as operational creditors and other stakeholders, the corporate debtor is revived and is made an on-going concern. After CoC approves the plan, the adjudicating authority is required to arrive at a subjective satisfaction that the plan conforms to the requirements as are provided in sub-section (2) of Section 30 of the I&B Code. Only thereafter, the adjudicating authority can grant its approval to the plan. It is at this stage that the plan becomes binding on the corporate debtor, its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. The legislative intent behind this is to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plans would go haywire and the plan would be unworkable.”
“102.1.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 to a claim, which is not part of the resolution plan.”
“102.3.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.”
In the case of Essar Steel (India) Ltd. Committee of Creditors v. Satish Kumar Gupta, (2020) 8 SCC 531, the Hon’ble Apex Court has held as under:-
“105.Section 31(1) of the Code makes it clear that once a resolution plan is approved by the Committee of Creditors it shall be binding on all stakeholders, including guarantors. This is for the reason that this provision ensures that the successful resolution applicant starts running the business of the corporate debtor on a fresh slate as it were. In SBI v. V. Ramakrishnan [SBI v. V. Ramakrishnan, (2018) 17 SCC 394 : (2019) 2 SCC (Civ) 458] , this Court relying upon Section 31 of the Code has held: (SCC p. 411, para 25)…….”
“107.For the same reason, the impugned NCLAT judgment [Standard Chartered Bank v. Satish Kumar Gupta, 2019 SCC OnLine NCLAT 388] in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with “undecided” claims after the resolution plan submitted by him has been accepted as 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 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.”
In the case of Ruchi Soya Industries Ltd. v. Union of India, (2022) 6 SCC 343, the Hon’ble Apex Court has held as under:-
“8.Mr Tripathi, learned Senior Counsel appearing for the appellant, has submitted that the present case is squarely covered by the law laid down by this Court in Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638] He submits that as a matter of fact, the office of Respondent 2 at Mangalore itself had lodged a claim before the resolution professional in respect of one of their demands. However, so far as the demand, which is the subject-matter of the present proceedings is concerned, no claim was lodged in respect thereof, and as such, in view of the law laid down by this Court while interpreting Section 31 IBC, the respondents are now not entitled to claim any amount, which is not a part of the resolution plan.”
“9.Ms Bagchi, learned counsel appearing for Respondent 2, the Revenue, on the contrary submits that no notice was issued to the Authority at Mangalore. She further submits that there was certain confusion as to whether the operational debt as defined under Section 5(21) IBC would cover the claim of Respondent 2, the Revenue. It is, therefore, submitted that in view of said confusion, there is a possibility that the office of Respondent 2 might not have lodged the claim with respect to the present proceedings.”
“10.We find that the present appeals are squarely covered by the law laid down by this Court in Ghanashyam Mishra & Sons (P) Ltd. [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638] It will be relevant to refer to para 102 of the said judgment which reads as under : (SCC p. 716)………”..
“11.Admittedly, the claim in respect of the demand which is the subject-matter of the present proceedings was not lodged by Respondent 2 after public announcements were issued under Sections 13 and 15 IBC. As such, on the date on which the resolution plan was approved by the learned NCLT, all claims stood frozen, and no claim, which is not a part of the resolution plan, would survive.”
“12.In that view of the matter, the appeals deserve to be allowed only on this ground. It is held that the claim of the respondent, which is 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 is directed to be refunded to the appellant.”
In the case of Electrosteel Steel Ltd. v. Ispat Carrier (P) Ltd., (2025) 7 SCC 773, the Hon’ble Apex Court has held as under:-
“46.An important question arose for consideration in Ghanashyam Mishra [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638 : (2021) 227 Comp Cas 251 : (2021) 91 GSTR 28] . Again a three-Judge Bench of this Court examined a question as to whether any creditor including the Central Government, State Government or any local authority is bound by the resolution plan once it is approved by the adjudicating authority under sub-section (1) of Section 31 IBC? Corollary to the above question was the issue as to whether after approval of the resolution plan by the adjudicating authority, a creditor including the Central Government, State Government or any local authority is entitled to initiate any proceeding for recovery of any of the dues from the corporate debtor which are not a part of the resolution plan approved by the adjudicating authority. In that case, the Bench in Ghanashyam Mishra [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638 : (2021) 227 Comp Cas 251 : (2021) 91 GSTR 28] concluded by holding 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 the resolution plan by the adjudicating authority, all such claims which are not a part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue any proceeding in respect to a claim which is not part of the resolution plan. The Bench declared that all dues including 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 proceeding 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.”
“49.In Ruchi Soya Industries [Ruchi Soya Industries Ltd. v. Union of India, (2022) 6 SCC 343 : (2022) 3 SCC (Civ) 369 : (2022) 231 Comp Cas 308 : (2022) 20 GSTR-OL 59] , a two-Judge Bench of this Court referred to the decision in Ghanshyam Mishra (supra) and thereafter declared that on the date on which the resolution plan was approved by NCLT, all claims stood frozen and no claim, which is not a part of the resolution plan, would survive.”
“50.A three-Judge Bench of this Court in Ajay Kumar Radheyshyam Goenka [Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corpn. of India Ltd., (2023) 10 SCC 545 : (2024) 1 SCC (Cri) 128 : (2023) 237 Comp Cas 601] held that a creditor has no option but to join the process under the IBC. Once the plan is approved, it would bind everyone under the sun. The making of a claim under IBC and accepting the same and not making any claim will not make any difference in the light of Section 31 IBC. Both the situations will lead to Section 31 and the finality and binding value of the resolution plan.” Para 62 of the said decision in Ajay Kumar Radheyshyam Goenka [Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corpn. of India Ltd., (2023) 10 SCC 545 : (2024) 1 SCC (Cri) 128 : (2023) 237 Comp Cas 601] is extracted hereunder: (SCC p. 576)
“62.Thus, from the aforesaid, it is evident that the creditor has no option but to join the process under IBC. Once the plan is approved, it would bind everyone under the sun. The making of a claim and accepting whatever share is allotted could be termed as an “Involuntary Act” on behalf of the creditor. The making of a claim under the IBC and accepting the same and not making any claim, will not make any difference in light of Section 31 IBC. Both the situations will lead to Section 31 and the finality and binding value of the resolution plan.”
“52.In a recent decision, a two-Judge Bench of this Court decided a contempt application in JSW Steel Ltd. v. Pratishtha Thakur Haritwal [JSW Steel Ltd. v. Pratishtha Thakur Haritwal, (2025) 9 SCC 673 : 2025 SCC OnLine SC 672 : 2025 INSC 401] . The contention of the petitioner was that the respondents had wilfully disobeyed the judgment of this Court in Ghanashyam Mishra [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638 : (2021) 227 Comp Cas 251 : (2021) 91 GSTR 28] by issuing demand notices pertaining to the period covered by the corporate insolvency resolution process. In the above context, the Bench reiterated what was held in Ghanashyam Mishra [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638 : (2021) 227 Comp Cas 251 : (2021) 91 GSTR 28] which has been followed in subsequent decisions and thereafter declared that all claims which are not part of the resolution plan shall stand extinguished. No person will be entitled to initiate or continue any proceeding in respect to a claim which is not part of the resolution plan. Though the Bench did not take any action for contempt in view of the unconditional apology made by the respondents nonetheless the Bench reiterated the proposition laid down in Ghanashyam Mishra [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638 : (2021) 227 Comp Cas 251 : (2021) 91 GSTR 28] clarifying that even if any stakeholder is not a party to the proceedings before NCLT and if such stakeholder does not raise its claim before the interim resolution professional/resolution professional, the resolution plan as approved by NCLT would still be binding on him.”
“71.Insofar as the second and third issues are concerned, it is by now well settled that once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, all claims which are not part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue any proceeding in respect to a claim which is not part of the resolution plan. In fact, this Court in Essar Steel [Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta, (2020) 8 SCC 531 : (2021) 2 SCC (Civ) 443 : (2020) 219 Comp Cas 97] had categorically declared that a successful resolution applicant cannot be faced with undecided claims after the resolution plan is accepted. Otherwise, this would amount to a hydra head popping up which would throw into uncertainty the amount payable by the resolution applicant. Insofar as the resolution plan is concerned, the resolution professional, the Committee of Creditors and the adjudicating authority noted about the claim lodged by the respondent in the arbitration proceeding. However, the respondent was not included in the top 30 operational creditors whose claims were settled at nil. This can only mean that the three authorities conducting the corporate insolvency resolution process did not deem it appropriate to include the respondent in the top 30 operational creditors. If the claims of the top 30 operational creditors were settled at nil, it goes without saying that the claim of the respondent could not be placed higher than the said top 30 operational creditors. Moreover, the resolution plan itself provides that all claims covered by any suit, cause of action, arbitration, etc. shall be settled at nil. Therefore, it is crystal clear that insofar as claim of the respondent is concerned, the same would be treated as nil on a par with the claims of the top 30 operational creditors.”
“74.In that view of the matter, we have no hesitation to hold that upon approval of the resolution plan by NCLT, the claim of the respondent being outside the purview of the resolution plan stood extinguished. Therefore, the award dated 6-7-2018 is incapable of being executed. Consequently, the order dated 3-3-2023 passed by the Presiding Officer, Commercial Court/District Judge 1, Bokaro in Commercial Execution Case No. 21 of 2022 (Execution Case No. 77 of 2018) is hereby set aside. Execution proceedings in Commercial Execution Case No. 21 of 2022 (Execution Case No. 77 of 2018) pending in the Court of Presiding Officer, Commercial Court/District Judge 1, Bokaro, are hereby quashed. Resultantly, the impugned order of the High Court dated 17-7-2023 [Electrosteel Steel Ltd. v. Ispat Carriers (P) Ltd., (2025) 256 Comp Cas 305 : 2023 SCC OnLine Jhar 1035] is also set aside.
21.In the case of JSW Steel Ltd. v. Pratishtha Thakur Haritwal, (2025) 9 SCC 673, the Hon’ble Apex Court has held as under:-
“36.It can thus clearly be seen that this Court has held that a successful resolution applicant cannot suddenly be faced with “undecided” claims after the resolution plan submitted by him has been accepted as 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. It has also been held that all claims must be submitted to and decided by the RP 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.”
“48.It is the contention of the alleged contemnors that the State of Chhattisgarh was not a party to the writ petition or to the proceedings before the learned NCLT. No doubt that even if any stakeholder is not a party to the proceedings before the NCLT and if such stakeholder does not raise his claim before the interim resolution professional/resolution professional, the resolution plan as approved by NCLT would still be binding on him. However, this being one of the first cases arising out of the judgment of this Court in Ghanashyam Mishra [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 : (2021) 4 SCC (Civ) 638 : (2021) 91 GSTR 28 : (2021) 227 Comp Cas 251] , we do not propose to take any stern action against the respondent contemnors. In any case, the respondent contemnors have tendered their unconditional apology.”
In the case of Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corpn. of India Ltd., (2023) 10 SCC 545, the Hon’ble Apex Court has held as under:-
“62.Thus, from the aforesaid, it is evident that the creditor has no option but to join the process under IBC. Once the plan is approved, it would bind everyone under the sun. The making of a claim and accepting whatever share is allotted could be termed as an “Involuntary Act” on behalf of the creditor. The making of a claim under IBC and accepting the same and not making any claim, will not make any difference in light of Section 31 IBC. Both the situations will lead to Section 31 and the finality and binding value of the resolution plan.”
So the scheme of the IBC, as exposed by the Judgment of the Hon’ble Apex Court is that whatever claim decided, undecided should be putforth before the Committee after due publication under Section 15 of the proposed resolution plan. As in the present case in hand, it seems that neither the erstwhile corporate debtor has placed undecided claim, which is pending in the writ petition before the Committee nor the respondents have placed the said claim before the Committee, therefore, there was no occasion for the resolution applicant to know such a liability. Therefore, in the considered opinion of this Court, the pending liability under adjudication cannot be fastened on a resolution applicant without it being placed before the adjudicating authority after due invitation of claims against the proposed action under Section 15 thereafter when the application is approved under Section 31.
The other grounds which have been raised by the petitioner during course of the arguments, that Article 300-A protects right to property, which provides a constitutional umbrella to a person who is deprived of his constitutional right of property, however, when it is tested at the anvil of Section 238 of the IBC, it is found that definitely constitutional mandate is above all other statutes and statutes cannot be made inconsistent with the provisions of Constitution. But, in the present case in hand, as the process under the IBC was initiated and as no claim has been submitted either by the petitioner or by the respondent, therefore after approval of the plan by the adjudicating authority (in the present case in hand i.e. NCLT) in the light of dictum passed by Hon’ble Apex Court in the case of ESSAR (supra) cannot be re-opened, therefore, the arguments raised by the petitioner are misconceived and is hereby rejected. Therefore, in view of above analysis of law and facts, the petition succeeds and the impugned order dated 26.12.2011 passed by the Collector, Singrouli in case No.58/A-74/2011-12 is hereby quashed. No orders as to costs.