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2025 Supreme(Online)(NCLT) 2013
NATIONAL COMPANY LAW TRIBUNAL
Dr. Venkata Ramakrishna Badarinath Nandula, Shri Charan Singh, JJ
Pridhvi Asset Reconstruction and Securitisation Company Ltd – Appellant
Versus
Sri Pavana Keerthi Hotels India Pvt Ltd – Respondent
CP (IB) IB/153/7/HDB/2021 | IA (IBC) 250/2024
For the Appellants/Petitioners: Mr. Ch. Srinivasulu, Mr. Raghu Babu Gunturu
For the Respondents: NA
The moratorium under the Insolvency and Bankruptcy Code prohibits recovery actions for past dues against a Corporate Debtor, ensuring its operation as a going concern during the insolvency process.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 14 and 238 - Greater Hyderabad Municipal Corporation cannot initiate recovery proceedings of property tax against Corporate Debtor post initiation of Corporate Insolvency Resolution Process (CIRP) and declaration of moratorium - Moratorium prohibits recovery actions for past dues, ensuring Corporate Debtor operates as a going concern during insolvency. (Paras 11, 18, 19)
(B) Jurisdiction - The provisions of IBC override other laws, including GHMC Act, concerning recovery actions against Corporate Debtors under moratorium. (Paras 14, 16, 18)
Facts of the case:
The application was filed by the Resolution Professional of the Corporate Debtor seeking injunction against the Greater Hyderabad Municipal Corporation from initiating coercive steps for property tax recovery during the CIRP. The Corporate Debtor was admitted into CIRP on 11.04.2022, with a moratorium declared.
Findings of Court:
The Tribunal ruled that the GHMC cannot initiate recovery actions against the Corporate Debtor due to the moratorium imposed under IBC, which prohibits such actions.
Issues: Whether GHMC can initiate recovery proceedings against the Corporate Debtor after CIRP initiation and moratorium declaration?
Ratio Decidendi: The court held that the moratorium under Section 14 of IBC prohibits recovery actions for past dues, allowing the Corporate Debtor to function as a going concern.
Result: Application allowed and disposed of.
| Table of Content |
|---|
| 1. corporate debtor's tax arrears during cirp (Para 1) |
| 2. ex parte proceedings and compliance issues (Para 2) |
| 3. jurisdiction of ghmc during cirp (Para 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 4. moratorium effects under ibc (Para 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 5. court's directive on tax recovery proceedings (Para 18 , 19 , 20) |
ORDER
This is an application filed by Resolution Professional (Applicant) of M/s. Sri Pavana Keerthi Hotels India Private Limited (Corporate Debtor) under Section 60(5) of The Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 11 of NCLT Rules, 2016 seeking the following reliefs against Greater Hyderabad Municipal Corporation represented by its Commissioner (Respondent):
a) Grant Ad-interim injunction or stay against the coercive steps that the Respondent Authority proposed to initiate including seize/seal of the Hotel premises situated at H.No.3-6-552 to 558, 558/1, Himayathnagar, Hyderabad.
b) Direct the Respondent Authority to lodge the claim for Rs.12,24,704/- with Resolution Professional towards arrears of taxes for the period up to CIRP Admission order dated 11.04.2022 payable by Corporate Debtor.
c) Direct the Respondent to permit the Resolution Professional/Applicant to accept the arrears of Tax subsequent to passing of CIRP Admission Order dated 11.04.2022 in monthly instalments.
1) Brief of averments in the Application:
1.1. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP) by this Tribunal vide order dated 11.04.2022 in a Petition vide C.P. No. IB/153/7/2021 filed by M/s. Pridhvi Asset Reconstruction and Securitisation Company Limited (Financial Creditor) and appointed the Applicant herein as Interim Resolution Professional (IRP) of the Corporate Debtor. The Applicant was confirmed as Resolution Professional (RP) by the Committee of Creditors (CoC) of the Corporate Debtor on 11.05.2022. Accordingly, the Applicant took control of the functioning of a hotel belonging to the Corporate Debtor situated at H.No.3-6-552 to 558, 558/1, Himayathnagar, Hyderabad.
1.2. During the CIRP, the Respondent Authority through their jurisdictional bill collector of Amberpet Circle No.16 issued a demand notice dated 10.11.2022 to the Corporate Debtor and asked for various documents. The Respondent Authority also informed the Corporate Debtor that the hotel is being run without obtaining/renewing the trade license for the past five years which is in violation of the rules and Regulations of GHMC as per section 521 of GHMC Act. That in case of default of payment of arrears and non-providing of information, appropriate action would be taken under Section 622 of the GHMC Act.
1.3. It is stated that on pursuits by the resolution professional the earlier notices issued by the Respondent Authority in regard to the Hotel were provided and ascertained the details of the arrears of tax to be paid by the Corporate Debtor. As per the calculations made by the resolution professional, the total arrears of tax to be paid by the Corporate Debtor to the Respondent Authority stands at Rs.38,54,691/-. Out of the same, the arrears of Rs.12,24,704/- pertains to CIRP period and arrears of Rs.26,29,987/- pertains to pre-CIRP period.
1.4. It is further stated that on 26.12.2022 the resolution professional informed the Respondent Authority to lodge their claim as per IBC. But the Respondent Authority failed to lodge the claim regarding the arrears of tax to be paid by the Corporate Debtor pertaining to the pre-CIRP period of Corporate Debtor i.e. prior to 11.04.2022. With respect to the payment of arrears during CIRP period, the resolution professional on 30.12.2023 sought permission from the Respondent Authority to make partial payments/payment in instalments, as the occupancy of the Hotel is not in full. Additionally, the Respondent Authority informed the resolution professional that unless the old arrears of tax are not cleared, the taxes for the CIRP period will not be accepted by the software of t
