Supreme Court holds that a resolution plan that altogether ignores statutory demands payable to any state government or legal authority is bound to be rejected
In a recent judgment the Hon’ble Supreme Court of India observed that if a resolution plan altogether ignores the statutory demands payable to any state government or legal authority, it is bound to be rejected by the adjudicating authority (here, National Company Law Tribunal). The Supreme Court went on to observe that: (a) if there is no resolution plan providing for payment of the corporate debtor’s statutory dues in a phased manner, it would necessarily have to be liquidated in terms of the Insolvency and Bankruptcy Code, 2016; and (b) delay in filing of claim before the resolution professional cannot be the sole ground for rejection of such claim.
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