Legal principle

Once a resolution plan is approved by the NCLT under Section 31(1) of the IBC, claims not forming part of the plan stand extinguished, and unless the approved plan expressly permits continuation, the appellate Tribunal loses jurisdiction over pending appeals and becomes functus officio.

Court decision

The Tribunal held that in light of the Ghanashyam Mishra ruling, claims not part of the approved resolution plan stand extinguished and the present proceedings could not be continued before it. Since the resolution plan did not specifically provide for continuation of the pending appeals, the appeals stood concluded by operation of law under the IBC and were disposed of accordingly; the Tribunal did not decide the appeal on merits.

Facts

M/s. Dishnet Wireless Limited had three pending Service Tax Appeals (Nos. 41237-41239 of 2017) before the CESTAT Chennai against Order-in-Appeal No. 61/2017 (STA-I), contesting statutory dues owed to the Central Government. During the pendency of the appeals, the company went through CIRP, and on 09.06.2020 the NCLT Mumbai Bench approved a Resolution Plan submitted by UV Asset Reconstruction Company Limited under Section 30(6) read with Section 31(1) of the IBC. The appellant's counsel thereupon requested that the appeals be treated as disposed of, and the department's Authorised Representative raised no objection. Neither side informed the Tribunal whether the dues under contest formed part of the approved resolution plan.

Key provisions

• Section 129B, Customs Act, 1962 —  Orders of Appellate Tribunal