Hon’ble High Court of Bombay held that:
(i) The approved resolution plan is compulsorily, the word used is ‘shall’, binding not only on the corporate debtor and its employees, members and creditors but, and this is important, also on the Central Government, any State Government or any Local Authority to whom a debt in respect of payment of dues arising under any law for the time being in force is owed as also guarantors and other stakeholders.
(ii) The resolution plan had to provide for known dues to the Central or State Government or any local authority. These had to form part of the plan. But this also means that if the plan was approved without provision being made for any amounts due to the Central or State Government or local authorities, then that approved resolution plan without those approved debts would also be binding on those authorities, i.e., those would not be amounts recoverable.
(iii) The resolution applicant starts on a clean slate.