If the departments of Central or State Governments do not file an application or participate in the Resolution Process, their claims automatically get extinguished – Union of India Vs. Ruchi Soya Industries Ltd. – High Court of Karnataka

The present proceedings concerning the subject import leading to demand of duty relates to the year 2015. AA approved the resolution plan in July, 2019.
Hon’ble High Court referring Ghanashyam Mishra (2021) ibclaw.in 54 SC held that claims which are not part of the resolution plan, shall stand extinguished. It is held that crown debts do not take precedence even over secured creditors, who are private persons. This is clear on a reading of Section 238 of IBC. Therefore, if the departments of Central or State Governments do not file an application or participate in the resolution process, their claims automatically get extinguished having regard to the judgment of the Hon’ble Supreme Court in the case of Ghanashym Mishra.

If the departments of Central or State Governments do not file an application or participate in the Resolution Process, their claims automatically get extinguished – Union of India Vs. Ruchi Soya Industries Ltd. – High Court of Karnataka Read Post »