The Commercial Taxes & Registration Dept., Govt. Of Tamil Nadu vs B. Ramana Kumar

The Appellant, by virtue of issuance of a Distraint Order in Form – I under Section 8 of Tamil Nadu Revenue Recovery Act, had attached the property of the Corporate Debtor i.e. Krishna Energy Private Limited, more aptly described as to be Plot No. 184 / 2, SIDCO Industrial Area, Thirumudivakkam, Chennai – 600044, for non-payment of Sales Tax dues. The attachment was made on 16.05.2014.

CIRP process was ordered to be initiated by Learned Adjudicating Authority on 22.11.2019. Based on Application of the Resolution Professional (Respondent herein), the Learned Adjudicating Authority ordered Liquidation of the Corporate Debtor on 06.01.2022. Thus, the Liquidation proceedings were initiated against the Corporate Debtor under the Insolvency and Bankruptcy Code, 2016, and the same has culminated in the year 2022.

The Appellant preferred a Claim before IRP on 14.03.2023. As Liquidation had commenced, the Liquidator processed the Claim and rejected it as `time barred’, as being received 14 months after the due date.

The Appellant moved an Interlocutory Application under Section 42 of I & B Code, 2016, on 21.07.2023, to set aside the rejection of the Claim by Liquidator.

The Liquidator filed an Application in IA(IBC)/1804(CHE)/2023, before NCLT, Chennai on 29.09.2023 to direct the Appellant to release the attachment over the Assets as described above. The Appellant herein (Respondent before NCLT), despite of being noticed, did not diligently participate in the proceedings and did not even file any reply nor even Vakalathnama, which was permitted to do so, since 12.10.2023, the date of commencement of the proceedings. Therefore, the Learned Adjudicating Authority was constrained to pass an order to proceed exparte, against the Appellant.

One final chance was also given by the Learned Adjudicating Authority on 22.03.2024 to file reply, within two weeks, in the said proceeding.

However, the Appellant had chosen not to file any response, citing technical difficulty. Accordingly, the Learned Adjudicating Authority, has set the Respondent (Appellant herein) as exparte and heard the case on merit and passed the Impugned Order on 03.05.2024.

It is contended by the Appellant that NCLT, while passing the Impugned Order did not consider genuine reasons for delay in filing the reply, overlooked his legitimate claim and statutory rights to recover outstanding tax dues and did not take into consideration the Interlocutory Application filed by him, under Section 42 of the I & B Code, 2016, which is presently pending consideration, before the competent Adjudicating Authority and there happens to be no orders passed on it as such, till date.

It is seen that the Impugned Order dated 03.05.2024 has been passed by the NCLT, Division Bench – II, Chennai, while considering IA (IBC)/1804(CHE)/2023, as preferred under Section 60(5)(c) of the I & B Code, 2016, whereby the attachment which was made as back as on 2014 has been permitted to be lifted and the Appellant has been directed to release the attachment which was made in 2014, owing to the fact that the liquidation proceedings have already been completed in 2022 and the property which was attached in 2014 have come to form part of Liquidation Estate.

Owing to the fact that the Appellant has not been diligent enough to submit his Claims in time and has submitted his Claims with a delay of 14 months, and that he has failed to participate the proceeding in respect of IA(IBC)/1804(CHE)/2023, despite being given several chances, which caused the Learned Adjudicating Authority to direct for the matter to be proceeded exparte, coupled with the fact that the liquidation proceeding itself has been completed in 2022, the case has to be laid to rest as against the Appellant. Consequently, allowing of the Application by the Liquidator / Respondent and directing to lift the attachment made by the Appellant by the Learned Adjudicating Authority / NCLT, Chennai, vide the Impugned Order do not suffer from any error which could call for any interference, while exercising the Appellate Jurisdiction, under Section 61 of I & B Code, 2016. The Appeal lacks merits and the same is accordingly dismissed.