#statutory dues

NCLAT clarifies that a financial creditor submitting a resolution plan under the IBC is not barred from voting on its own plan, rejecting the NCLT's conflict of interest rationale. The ruling reinforces the commercial wisdom of the Committee of Creditors (CoC) and expands the scope of eligible resolution applicants, impacting insolvency proceedings where creditors seek to revive distressed companies.

The Allahabad High Court has ruled that under Section 31 of the IBC, statutory electricity dues arising before the Corporate Insolvency Resolution Process are extinguished as of the Effective Date specified in the approved resolution plan - not the date of NCLT approval. This clarifies that resolution applicants inherit liability only prospectively, reinforcing the clean slate principle and shielding them from legacy dues improperly revived post-resolution.

NCLAT reaffirms that Employees Provident Fund Organisation (EPFO) cannot press claims for damages and interest under Sections 7A, 14B, and 7Q of the EPF Act during the corporate insolvency resolution process. The ruling clarifies that moratorium under Section 14 of the IBC bars assessment proceedings, impacting creditor hierarchy and recovery priorities for statutory dues.

The Tribunal holds that once a resolution plan is approved under IBC, statutory dues not included are extinguished, and tax appeals must cease unless expressly permitted.

The CESTAT holds that statutory dues not included in an approved IBC resolution plan stand extinguished, barring further recovery proceedings under the Service Tax regime.