Legal Updates (Aug 31 – Sep 05, 2026)
CASE UPDATES
If applicant is a Director and Key Managerial Person of the company with dominion and control over its funds, and had sanctioned loan transactions without proper due diligence, and facilitated diversion of funds through related-party transactions in violation of approved board resolutions, grant of bail is not warranted
The Delhi High Court in the case of Achal Kumar Jindal vs State (NCT of Delhi) [BAIL APPL. NO. 2224/2026] dated August 24, 2026, has held that in cases of economic offences involving siphoning and diversion of funds from companies through related-party transactions and shell entities, the High Court cannot grant bail mechanically by merely observing that the case arises out of a commercial transaction and the dispute is of a civil nature, as held by the Supreme Court in Centrum Financial Services Ltd. v. State of NCT of Delhi [(2022) 13 SCC 286].
The Court pointed that the relevant considerations for grant of bail include the nature and seriousness of the offence, the character of the evidence and circumstances peculiar to the accused, the likelihood of the accused fleeing from justice, the impact of release on prosecution witnesses and society, and the likelihood of tampering, as enumerated by the Supreme Court in Anil Kumar Yadav v. State (NCT of Delhi) [(2018) 12 SCC 129].
The Court held that where the applicant is a Director and Key Managerial Person of the company with dominion and control over its funds, and is found to have actively participated in board meetings, approved board resolutions, sanctioned loan transactions without proper due diligence, and facilitated diversion of funds through related-party transactions in violation of approved board resolutions, the grant of bail is not warranted, particularly where the applicant has a history of non-cooperation, violated court undertakings, and remained an absconder for a substantial period.
The Court observed that for the purposes of establishing criminal breach of trust, the entrustment of property need not necessarily be of the complainant themselves, as the wheels of criminal law can be set in motion by any person and there is no locus standi that a complainant needs to prove in order to inform investigative agencies about the commission of a cognizable offence. The Court also observed that a director is not only an agent but is in the position of a trustee of the company’s money and property, and therefore has dominion and control over the same.
The Court rejected the applicant’s contention that all loans, except one, had been repaid, observing that it is the original act of misappropriation, siphoning off, diversion and misutilisation that forms the offending act, and subsequent repayment, which may have happened with collusion, has no bearing on the same. The Court further observed that the management of the company is separate from its owners, i.e., the shareholders, and whatever be the shares held by the applicant, the fact that he is the Executive Director of ECL is the material fact having a bearing on the allegations.
The Court noted that economic offences deserve a compounded scrutiny, as financial crimes take place with cool calculation with the sole intent to hurt and injure the victims, and while conventional crimes may occur owing to a rise in passions, a financial crime is premeditated. Thus, holding that economic offences, committed with “cool calculation” merit compounded scrutiny, the Court dismissed the regular bail application of a director and KMP of an NBFC accused of siphoning Rs. 315 crores raised as debt from investors and creditors.
If a cooperative housing society member is aggrieved both by the general body resolutions approving redevelopment and by the development agreement executed in favour of a developer, the member cannot maintain a bifurcated challenge by filing a dispute before the Cooperative Court against the resolutions and a civil suit against the development agreement
The Bombay High Court in the case of Baliram Totaram Misal vs Saujanya Co-operative Housing Society [Writ Petition No.15791 of 2025] Decided on August 27, 2026, has held that aggrieved members cannot split their challenge by filing a separate dispute before the Cooperative Court against resolutions while pursuing a civil suit against the development agreement. The Court explained that where a cooperative housing society member is aggrieved both by the general body resolutions approving redevelopment and by the development agreement executed in favour of a developer, the member cannot maintain a bifurcated challenge by filing a dispute before the Cooperative Court against the resolutions and a civil suit against the development agreement.
Since the developer acquires interest in the society’s property prior to the filing of the dispute and cannot be impleaded in Cooperative Court proceedings under Section 94(3)(a) of the Maharashtra Co-operative Societies Act, 1960 (MCS Act), the correct and only effective remedy is a composite civil suit before the Civil Court, which can adjudicate the validity of both the resolutions and the development agreement together.
The High Court noted that Section 91 of the MCS Act requires twin conditions to be met for the Cooperative Court to assume jurisdiction: the dispute must concern enumerated subject matters, and the parties must fall within the categories specified in clauses (a) to (e) of Section 91(1). While the second condition was clearly satisfied since the Petitioners are members challenging the Society, the first condition relating to subject matter was the crux of the dispute.
The Court observed that a member aggrieved by a cooperative housing society’s redevelopment process cannot segregate the challenge by filing a dispute before the Cooperative Court against general body resolutions and a separate civil suit against the development agreement and power of attorney. The proper remedy is a single composite civil suit before the Civil Court. Further, where the developer has already acquired interest in the society’s property prior to the filing of the dispute, the developer cannot be impleaded as a party under Section 94(3)(a) of the MCS Act, since the provision applies only to acquisition of interest during pendency of the dispute.
The Court found that the plaint contained no averment that redevelopment constituted the object or business of the society, nor that the bye-laws had been amended to include redevelopment as one of the objects under Section 154B(1)(17) of the MCS Act, which was sufficient to reject the dispute under Order VII Rule 11(d) of the Code. Since the redevelopment process commenced in 2016, well before the 2019 amendments to the MCS Act, and the society’s bye-laws had not been amended to include redevelopment as an object, the Court observed that the dispute did not touch the business of the society and was outside the Cooperative Court’s jurisdiction under Section 91.
Where a company is employed as a facade or conduit for shielding assets from creditors, the Court may look beyond the corporate structure. However, such piercing is fact-specific and must be based on cogent material establishing that the corporate structure was used to defeat the decree holder’s rights
The Delhi High Court in the case of Daichii Sankyo vs Malvinder Mohan Singh [EX.APPL.(OS) 3764/2022] dated August 31, 2026, has held that procedure is meant to advance the cause of justice and not retard it, and Courts must ensure that decrees are executed not only for the satisfaction of the decree holder but to uphold the majesty of the administration of justice. The Court observed that the difficulties of a litigant begin when a decree is obtained, and that judgment debtors use procedural complications and delays to defeat the rights of decree holders, making Courts instrumental in defrauding creditors.
On the doctrine of reverse corporate veil piercing, the Court held that the separate juristic personality of a company cannot be permitted to become an instrument for defeating the administration of justice or frustrating judicial orders. Where a company is employed as a facade or conduit for shielding assets from creditors, the Court may look beyond the corporate structure. However, such piercing is fact-specific and must be based on cogent material establishing that the corporate structure was used to defeat the decree holder’s rights.
On the necessity of a forensic audit, the Court held that the factual foundation must precede the legal conclusion, and that reconstruction of the chronology of share transactions, fund flows, and the role of directors, officers and banks cannot be effectively undertaken without a forensic examination.
Vicarious liability under Section 141 of the Negotiable Instruments Act, 1881 cannot be fastened by mere designation or association. Further, the criminal liability under Section 141 cannot be imposed merely by association and the role attributable to each accused must be independently discernible
The Punjab & Haryana High Court in the case of Deepak Aggarwal vs Rajinder Earthmover Filling Station Pvt Limited [CRM-M-24223-2024 (O & M)] dated September 04, 2026, has held that vicarious liability under Section 141 of the Negotiable Instruments Act, 1881 cannot be fastened by mere designation or association. The Court also issued prospective directions requiring every complainant to mandatorily annex the Corporate Identification Number and certified Form DIR-12 to complaints under Section 138/141 NI Act against corporate accused.
The Court explained that vicarious liability under Section 141 of the NI Act is person-specific and arises from being in charge of and responsible for the conduct of the business of the company at the time the offence was committed, and not merely from holding a designation or office in the company. The Court also said that a Managing Director or Joint Managing Director is deemed to be in charge of and responsible for the conduct of the business of the company by virtue of the office held, and no further specific averment is required in the complaint; however, for any other officer, the complaint must disclose the position, duties, and role in regard to the issue and dishonour of the cheque.
The Court examined Section 141 of the Negotiable Instruments Act, 1881, which creates vicarious liability for offences committed by companies, and noted that the liability of a person arises from being in charge of and responsible for the conduct of the business of the company at the relevant time, and not merely from holding a designation or office in the company. The Court also added that a complaint need not mechanically reproduce the exact phraseology of Section 141 if the substance of the allegations, read as a whole, discloses the factual basis for such liability, but the criminal liability under Section 141 cannot be imposed merely by association and the role attributable to each accused must be independently discernible.
The Court also noted the recent Supreme Court decision in HDFC Bank Ltd. vs. State of Maharashtra [(2025) 9 SCC 653], which clarified that the complaint need not mechanically reproduce the exact phraseology of Section 141 if the substance of the allegations, read as a whole, discloses the factual basis for such liability, but the criminal liability under Section 141 is person-specific and cannot be imposed merely by association. On the question of directors who had resigned, the Court reiterated that a director who has not signed the cheque and had resigned from the company before the cheque was issued or dishonoured cannot be held liable, provided there is unimpeachable evidence of such resignation communicated to the statutory authorities.
Goodwill of a partnership is a partnership asset, and only partners have a right to the property of the firm subject to contract. Further, no third party can claim a right in the assets and properties of the firm
The Calcutta High Court in the case of Fox and Mandal vs Somabrata Mandal [IA NO. GA/4/2023] dated August 24, 2026, held that goodwill belongs exclusively to the firm and not to individual partners or their heirs, and the “classic trinity” of reputation, misrepresentation, and damage to goodwill are the basic ingredients to succeed in an action for passing off, and misrepresentation lies at the heart of such an action. A prior user has a superior right and is entitled to protection against any subsequent user of an identical or deceptively similar mark.
The Court also emphasised that goodwill of a partnership is a partnership asset, and only partners have a right to the property of the firm subject to contract; no third party can claim a right in the assets and properties of the firm. Registration is inconsequential in an action for passing off, and the plaintiff can succeed even upon showing likelihood of injury or damage, without proving actual damages.
The Court observed that the plaintiff no. 1 is the admitted prior user of the marks “Fox and Mandal”, “Fox & Mandal” and “F&M” since 1896, while the defendants are subsequent adopters claiming user only since 1986. The reputation and goodwill of the firm remained undisputed. The Court noted that goodwill generated by a partnership is a partnership asset and belongs to the firm, not to individual partners or their heirs. The mark “Fox & Mandal” is the property of the firm and cannot be claimed by any individual partner or his legal heirs.
A borrower who has fully repaid the loan is entitled to assume that the Bank will preserve and return the original title documents. The obligation to maintain proper custody, identification, retrieval and return rests solely on the Bank and cannot be shifted to the borrower merely because the borrower did not immediately seek return of the documents
The Bombay High Court in the case of In Vogue Creations vs State Bank of India [Writ Petition No. of 2025] dated September 02, 2026, has held that a borrower who has fully repaid the loan is entitled to assume that the Bank will preserve and return the original title documents. Thus, the obligation to maintain proper custody, identification, retrieval and return rests solely on the Bank and cannot be shifted to the borrower merely because the borrower did not immediately seek return of the documents.
The Court observed that a borrower who has fully discharged the loan is entitled to proceed on the legitimate assumption that the Bank will preserve and return the original title documents, and that the burden of maintaining a proper system for preservation, identification, retrieval and return of documents rests solely on the Bank and cannot be shifted to the borrower merely because the borrower did not immediately seek their return.
The Court clarified that internal administrative matters such as shifting of branch premises, transfer of records or change of personnel are within the Bank’s exclusive domain, and the obligation to preserve and return title documents does not depend upon the borrower reminding the Bank to perform that obligation. Specifically, the High Court held that the RBI Circular dated 13 September 2023 on Responsible Lending Conduct – Release of Movable/Immovable Property Documents on Repayment/Settlement of Personal Loans cannot be applied retrospectively to a period starting from 2003, but the prescribed compensation of Rs. 5,000 per day will apply prospectively from 1 December 2023 onwards where the loss of original documents is admitted and continuing prejudice is established.
Moving ahead, the Court emphasised that the proceedings before the Banking Ombudsman and a writ petition operate in different fields, and the Ombudsman’s advisory compensation of Rs. 1 lakh does not exhaust the borrower’s remedy. Further, the compensation under the RBI Circular is expressly without prejudice to the borrower’s right to seek any other compensation under applicable law. Strongly, the High Court directed that the bank is required to assist the borrower in obtaining duplicate or certified copies of the lost documents, bear the associated costs, and complete the reconstructed title record, including all necessary endorsements, affidavits, indemnities, certifications and supporting documents, within 12 weeks of the order, failing which the daily compensation continues to accrue.
Definition of ‘associate’ under Section 79(2)(g) of IBC cannot be expanded beyond its statutory text, and procedural irregularities such as shorter notice periods or absence of forensic audit do not warrant rejection where no actual prejudice is demonstrated
The New Delhi Special Bench of the National Company Law Tribunal (NCLT) in the case of India Bulls vs Dr. Subhash Chandra [Company Petition No. (IB) – 97(ND)/2022] dated August 25, 2026, has held that where a Repayment Plan under Part III of the IBC has been approved by the requisite majority of creditors and the statutory procedure under Sections 105, 106, 112 and 114 of the IBC has been substantially complied with, the Adjudicating Authority must accord due deference to the commercial wisdom of the creditors while exercising supervisory judicial scrutiny.
The NCLT clarified that the definition of “associate” under Section 79(2)(g) cannot be expanded beyond its statutory text, and procedural irregularities such as shorter notice periods or absence of forensic audit do not warrant rejection where no actual prejudice is demonstrated. The approved Plan binds all creditors under Section 115, subject to the Tribunal’s inherent power to recall its order upon subsequent discovery of fraudulent concealment of material assets.
The Tribunal observed that the Adjudicating Authority under Section 114 of the IBC is not a mere rubber stamp to the creditors’ decision but must independently examine whether the statutory framework has been complied with, while respecting the commercial wisdom of the creditors. On the interpretation of Section 79(2)(g), the Tribunal held that the statutory test for determining an “associate” is based on ownership exceeding 50% of share capital or legal control over the Board of Directors, and not on commercial influence, business proximity, or family relationships.
The Tribunal observed that the Legislature deliberately used narrower language in Part III compared to the broader “related party” concept in Part II, and purposive interpretation cannot be used to rewrite clear statutory language. The Tribunal further observed that the Code does not make a forensic audit or asset-tracing exercise a mandatory precondition for approval of a repayment plan under Chapter III of Part III, as such investigative powers are specifically conferred only on the Bankruptcy Trustee under Section 149.
Selling duplicate hardware accessories does not constitute copyright infringement under Section 63, and that converting a trademark dispute into a copyright FIR to evade the mandatory Registrar’s opinion and DSP-rank investigation under Section 115(4) of the Trade Marks Act amounts to an abuse of process
The Gujarat High Court in the case of Jitendrabhai Mohanbhai Kriplani vs State of Gujarat [R/CR.MA/21846/2022] dated September 07, 2026, has ruled that selling duplicate hardware accessories does not constitute copyright infringement under Section 63, and that converting a trademark dispute into a copyright FIR to evade the mandatory Registrar’s opinion and DSP-rank investigation under Section 115(4) of the Trade Marks Act amounts to an abuse of process. The Court clarified that AirPods, USB cables, power adapters, smartwatches and similar electronic accessories are commercial industrial products and do not fall within the scope of ‘literary, dramatic, musical or artistic work’ under Sections 2(c) and 13 of the Copyright Act, 1957, and hence, selling duplicate versions of such items cannot attract Section 63 of the Copyright Act.
The Court held that an FIR invoking Section 63 of the Copyright Act must explicitly set out how the seized material satisfies the definition of a protected ‘work’ under Section 2 read with Section 13. A generic allegation that goods ‘infringe copyright’ without identifying any specific literary work (such as instruction manuals) or artistic work (such as original packaging artwork) is insufficient to sustain a copyright offence. The High Court also clarified that standard MRP price tags, barcodes, technical model stickers and seal stickers contain purely functional and factual data which cannot originate as an ‘original literary work’ of authorship. Photographs produced by the complainant through an affidavit in reply cannot substitute the recovery memo, and no new factual foundation can be invented during oral arguments.
Moving ahead, the Court emphasised that the mandatory prior opinion of the Registrar of Trade Marks and the requirement that search and seizure be conducted only by an officer not below the rank of Deputy Superintendent of Police are statutory conditions precedent, not technical formalities. The Court also said that where a complainant deliberately dresses up a trademark dispute as a copyright infringement to bypass statutory safeguards under the Trade Marks Act, the Court will not permit a subsequent ‘conversion’ or fallback to trademark charges. Allowing such indirect achievement of what is directly prohibited would amount to sanctioning a deliberate evasion of statutory mandate.
The Court observed that under Section 13 read with Section 2(c) of the Copyright Act, 1957, copyright protection is strictly confined to original literary, dramatic, musical or artistic works, sound recordings and cinematograph films, and that hardware components, cables, power adapters and electronic devices are commercial industrial products. The Court noted that misusing a brand name or producing duplicate hardware bearing a trademark constitutes falsification of trademarks punishable under Sections 103 and 104 of the Trade Marks Act, 1999, rather than an offence under the Copyright Act, and that selling duplicate commercial items bearing a registered trademark cannot attract Section 63 of the Copyright Act unless the FIR explicitly establishes the existence of a copyrightable artistic work.
The Court found that the FIR merely describes the seized items as ‘goods’ infringing upon the copyright of Apple Inc. Corporation and bearing the Apple trademark but does not state that Apple holds copyright in any specific literary work or artistic work.
An agent cannot claim a cross-contractual lien over the principal’s property for dues arising under separate agreements in the absence of an express contractual provision permitting such retention, since Section 221 of the Indian Contract Act limits the agent’s lien to amounts due ‘in respect of the same’ property
The Bombay High Court in the case of Limited Liability Company “LTB” vs Vaibhavi Logistics [Commercial Arbitration Petition (L) No.24421 of 2026] dated August 27, 2026, has held that an agent cannot retain the principal’s property to secure dues arising under separate agreements. The Court held that an agent cannot claim a cross-contractual lien over the principal’s property for dues arising under separate agreements in the absence of an express contractual provision permitting such retention, since Section 221 of the Indian Contract Act limits the agent’s lien to amounts due “in respect of the same” property.
The Court observed that Section 221 of the Indian Contract Act, 1872 entitles an agent to retain the principal’s property only for commission, disbursements or services “in respect of the same” property, and not for dues arising under separate contracts. Also, the Court clarified that Section 9 relief can be granted against non-signatories who are in physical possession of the subject matter of the arbitration, as the focus of Section 9(ii)(c) is on protection of the subject matter and not on contractual liability of the non-signatory.
The Court further held that a composite Section 9 Petition based on multiple agreements with separate arbitration clauses is not maintainable as a single reference, but the Petitioner may restrict its Petition to one agreement and seek liberty to pursue the remaining claims separately, in line with the principle underlying Order XXIII Rule 1(3) CPC.
Identification and arraignment of individuals are not prerequisites for prosecution of a company. The chargesheet must disclose that the corporation itself committed the offence, not that it has identified the particular individual through whom it did so, and that the corporation’s role can be disclosed through averments concerning its own conduct
The Supreme Court in the case of Sanofi India vs Central Bureau of Investigation [Criminal Appeal No. 4250 of 2026] dated September 07, 2026, has clarified that identification and arraignment of individuals are not prerequisites for prosecution of a company. The Court reasoned that the chargesheet must disclose that the corporation itself committed the offence, not that it has identified the particular individual through whom it did so, and that the corporation’s role can be disclosed through averments concerning its own conduct, decisions, and dealings without naming the individual who carried them out.
The Court held that mens rea can be averred through surrounding facts and conduct without being tied to a specifically named individual, and that the question of attribution is intricate and ultimately a matter for trial. The Court clarified that the rulings in Aneeta Hada v. Godfather Travels [(2012) 5 SCC 661] and Hindustan Unilever v. State of M.P. [(2020) 10 SCC 751], which required arraignment of the company for prosecution of natural persons under Section 141 of the Negotiable Instruments Act and similar vicarious liability provisions, cannot be read as establishing a general rule that arraignment of a natural person is a prerequisite for a corporation’s prosecution. The Court held that such principle applies only where the statute creates vicarious liability.
The Court observed that the question of whether a corporation can possess mens rea was no longer res integra in India, having been settled in favour of corporate criminal liability through decisions such as Iridium India Telecom Ltd. v. Motorola Inc. [(2011) 1 SCC 74] and Standard Chartered Bank v. Directorate of Enforcement [(2005) 4 SCC 530]. The Court noted that the real gap in Indian jurisprudence lay in the second question, namely, the basis on which mens rea could be attributed to a corporation, which had remained largely unaddressed.
Where an instrument, in substance, grants development rights to a promoter or developer against a percentage of gross sale proceeds as consideration, Article 5(g-a) of Schedule I of the Maharashtra Stamp Act applies, regardless of whether the document is described as a ‘Development Agreement’ or a ‘Joint Venture Agreement’
The Bombay High Court in the case of Star Developers vs State of Maharashtra [Writ Petition No. 11127 of 2018] dated August 28, 2026, has held that the substance of an agreement, not its label, determines whether Article 5(g-a) of Schedule I of the Maharashtra Stamp Act applies, and that an owner’s agreed percentage of gross sale proceeds constitutes consideration for development rights even where the exact future amount is uncertain. The Court clarified that where an instrument, in substance, grants development rights to a promoter or developer against a percentage of gross sale proceeds as consideration, Article 5(g-a) of Schedule I of the Maharashtra Stamp Act applies, regardless of whether the document is described as a “Development Agreement” or a “Joint Venture Agreement.”
The Court reaffirmed that revenue sharing of gross sale proceeds, though payable later, constitutes consideration for the transfer of development rights under Section 2(na) of the Maharashtra Stamp Act, and that the consideration has to be calculated as on the date of execution of the instrument by considering the development potential and the applicable ASR rates. The Court held that the 2015 ASR Guidelines cannot retrospectively create a fresh stamp duty liability for documents executed prior to their issuance, but the statutory basis for such demand exists in Article 5(g-a) and Section 2(na) read with Section 32A of the Act.
The Court further held that Section 32A(5) can be validly invoked on receipt of information from any source, including audit objections raised by the CAG, provided the Collector independently examines the correctness of the market value and the stamp duty payable. The Court also held that the residuary provision under Article 5(h)(b) cannot be invoked to avoid a specific entry merely because the document has been given a different name, and that the subsequent sale of constructed units is a separate taxable instrument and does not amount to double stamp duty on the same transaction.
On the CAG issue, the Court held that while an audit objection is not an order determining stamp duty, it can bring possible undervaluation to the notice of the competent authority, and Section 32A(5) permits the Collector to act “on receipt of information from any source.” The Court rejected the argument regarding double stamp duty, holding that the subsequent sale of constructed units is a separate transfer and is separately chargeable to stamp duty. The Court also rejected the contention that the Respondents had taxed future profits, observing that the amount was being considered as consideration for determining market value and stamp duty, and not as an assessment of income-tax.
A practising Chartered Accountant is not disqualified under Section 29A from submitting a resolution plan, and the ICAI has confirmed such eligibility subject to the restriction on acting as a whole-time director
The New Delhi Principal Bench of the National Company Law Appellate Tribunal (NCLAT) in the case of Vinay Gupta vs Oswal Minerals Limited & Satellite Cables [Company Appeal (AT) (Insolvency) No. 1038 of 2024] dated August 21, 2026, has held that practising Chartered Accountants are not barred from submitting resolution plans under Section 29A, and that government dues, not provided for in an approved plan stand extinguished under the ‘clean slate’ doctrine. The NCLAT explained that the commercial wisdom of the CoC in approving a resolution plan with 100% voting share is non-justiciable and cannot be substituted by the Adjudicating Authority or the Appellate Tribunal. A suspended director’s challenge under Section 61 must demonstrate material prejudice, not merely procedural irregularity.
Further, the NCLAT asserted that a practising Chartered Accountant is not disqualified under Section 29A from submitting a resolution plan, and the ICAI has confirmed such eligibility subject to the restriction on acting as a whole-time director. At the same time, an OTS proposal does not terminate CIRP absent a Section 12A withdrawal, and the CoC is entitled to consider factors beyond the highest monetary bid. While interference with an implemented resolution plan is deprecated, the Tribunal imposed costs on both appellants for abusing the process of law.
The Tribunal observed that a suspended director is not completely excluded from the CIRP and is entitled to meaningful participation under Section 24(3)(b) of the IBC, as recognised by the Supreme Court in Vijay Kumar Jain v. Standard Chartered Bank [(2019) 20 SCC 455]. On the OTS issue, the NCLAT observed that once CIRP commences, withdrawal can only occur under Section 12A with 90% CoC approval, and a mere settlement proposal does not nullify the CIRP. On the alleged higher bid, the Tribunal observed that entertaining post-closure revisions would destabilise the insolvency resolution process and could lead to manipulation, and that Mr. Anuj Goyal himself had not challenged the plan approval.
On government dues, the NCLAT observed that the CGST order-in-original was passed on 20 December 2023, two days before voting concluded, and the RP’s obligation under Section 30(2)(b)(ii) was only to examine plans against admitted or known dues. The Tribunal further noted that the Supreme Court in Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [(2021) 9 SCC 657], held that once a resolution plan is approved under Section 31, all claims not included in the plan stand extinguished under the ‘clean slate’ doctrine, and the approved plan becomes binding on government authorities and statutory creditors.
