Case Details: JSW Steel Ltd. Versus Pratishtha Thakur Haritwal (2025) 30 Centax 2 (S.C.)
Judiciary and Counsel Details
- B.R. Gavai & Augustine George Masih, JJ.
- S/Shri Gopal Jain, Sr. Adv., Ms Nandini Gore, Akhil Abraham Roy, Mohammad Shahyan Khan, Ms Manvi Rastogi, Advs. & For M/s. Karanjawala & Co., AOR, for the Petitioner.
- S/Shri Aditya Bhanu Neekhra, Atul Dong, Aniket Patel, Advs. & Ms Pragati Neekhra, AOR, for the Respondent.
Facts of the Case
The petitioner, a corporate debtor, underwent Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. A Resolution Plan submitted by the successful resolution applicant was approved by the Committee of Creditors under Section 30(4) and subsequently sanctioned by the National Company Law Tribunal (NCLT) under Section 31(1). After this approval, a Commercial tax department—despite not submitting its claim or participating in the CIRP—initiated recovery proceedings for statutory dues relating to the pre-CIRP period.
The petitioner, being the resolution applicant, approached the Hon’ble Supreme Court, contending that such claims stood extinguished under the approved plan. Relying on Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., the petitioner stated that Section 31(1) makes the resolution plan binding on all stakeholders, including government authorities, and ensures a clean slate for the corporate debtor.
Supreme Court Held
The Hon’ble Supreme Court held that even if the stakeholder had neither participated in the proceedings before the NCLT nor raised their claim with the Resolution Professional, the Resolution Plan approved by the NCLT would still be binding on them. The Court reaffirmed the legal position established in Ghanashyam Mishra & Sons Pvt. Ltd., where it was made clear that Section 31 of the IBC applies uniformly to all stakeholders, including those who did not participate in the CIRP.
The Court found that the continuation of commercial tax demands for the period before the NCLT’s approval of the Resolution Plan, despite the Supreme Court’s judgment in Ghanashyam Mishra, was in violation of the established legal framework. However, the Court refrained from initiating proceedings against the department, granting them the benefit of the doubt due to this being one of the first cases arising from the Ghanashyam Mishra judgment. Additionally, the Commercial Tax Department tendered an unconditional apology. As a result, the Court set aside the demand notices and all subsequent proceedings, deciding the petition in favour of the petitioner.
List of Cases Cited
- Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Limited — (2023) 10 SCC 545 — Referred [Para 26]
- Committee of Creditors of Essar Steel India Limited through Authorised Signatory v. Satish Kumar Gupta — (2020) 8 SCC 531 — Referred [Para 23 and 25]
- Ghanshyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. — Civil Appeal No. 8129 of 2019, decided on 13-4-2021 by Supreme Court — Applied [Paras 2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.9, 7, 9, 12, 13, 14, 15, 23, 25, 26, 33, 34, 35, 36]
- Innoventive Industries Ltd. v. ICICI Bank — (2018) 1 SCC 407— Relied on [Para 25]
- K. Shashidhar v. Indian Overseas Bank — (2019) 12 SCC 150 — Referred [Para 25]
- K.N. Rajakumar v. V. Nagarajan — (2022) 4 SCC 617 — Referred [Para 26]
- Kalpraj Dharamshi v. Kotak Investment Advisors Limited — 2021 SCC OnLine SC 204 — Referred [Para 23 and 25]
- Karad Urban Cooperative Bank Ltd. v. Swwapnil Bhingardevay — (2020) 9 SCC 729— Relied on [Para 25]
- Maharashtra Seamless Limited v. Padmanabhan Venkatesh — (2020) 11 SCC 467 — Referred [Para 23 and 25]
- Monnet Ispat & Energy Ltd. v. State of Odisha — Special Leave Petition (Civil) No. 6483 of 2018, decided on 10-8-2018 by Supreme Court — Applied [Paras 16, 20, 21]
- Ruchi Soya Industries Limited v. Union of India — (2022) 6 SCC 343 — Referred [Para 26]
- State Tax Officer v. Rainbow Papers Ltd. — (2023) 9 SCC 545 — Distinguished [Paras 12, 28, 31, 32]
