W.P.(C) 10387/2026 Page 1 of 31

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: 18.08.2026

Judgment pronounced on: 02.09.2026

Judgment uploaded on: 02.09.2026

# CNR No. DLHC010334532026

+ W.P.(C) 10387/2026 and CM APPL. 48073/2026

JAIPRAKASH ASSOCIATES LIMITED .....Petitioner

Through: Mr. Gauhar Mirza, Mr.

Syamantak Sen, Mr. Kaveesh

Nair, Mr. Jeetendra

Vishwakarma & Mr. Tanay

Khanna, Advs.

versus

THE OFFICE OF THE COMMISSIONER OF CUSTOMS AIR

CARGO COMPLEX IMPORT & ANR. .....Respondents

Through: Ms. Anushree Narain, SSC with

Mr. Apurv Yadav and Mr.

Naman Choula, Advs.

CORAM:

HON'BLE MR. JUSTICE ANIL KSHETARPAL

HON'BLE MS. JUSTICE SHAIL JAIN

J U D G M E N T

ANIL KSHETARPAL, J.:

1. The present Writ Petition under Article 226 of the Constitution

of India has been preferred by the Petitioner, Jaiprakash Associates

Limited, seeking quashing of Order-in-Original No.23/2026-27/ACC

Import/2789 dated 02.06.2026 [hereinafter referred to as „Impugned

Order‟] passed by the Additional Commissioner of Customs, Air

Cargo Complex (Import), New Delhi. Vide the Impugned Order, the

W.P.(C) 10387/2026 Page 2 of 31

Respondent-Authority has confirmed differential customs duty of

Rs.5,89,366/- under Section 28(1) of the Customs Act, 1962

[hereinafter referred to as the „Customs Act‟], ordered recovery of

interest under Section 28AA thereof and imposed a penalty of

Rs.4,00,000/- under Section 117 of the Customs Act. The demand

arises out of the import of Digital and Network Video Recorders by

the Petitioner vide Bill of Entry No.7856824 dated 15.09.2023.

2. The principal grievance of the Petitioner is not with the

classification of the imported goods or the quantum of differential

duty in isolation, but with the continuation and culmination of the

customs proceedings after commencement and completion of the

Corporate Insolvency Resolution Process [hereinafter referred to as

„CIRP‟] of the Petitioner. The Petitioner contends that the underlying

liability relates to a transaction which admittedly preceded the

Insolvency Commencement Date, and that the Customs Department

did not submit any claim before the Resolution Professional

[hereinafter referred to as „RP‟] during the CIRP. According to the

Petitioner, upon approval of the Resolution Plan under Section 31 of

the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as

the „IBC‟], such unfiled pre-CIRP claims stood extinguished and

could not thereafter form the subject matter of adjudication or

recovery proceedings.

3. The Respondents, on the other hand, have proceeded on the

basis that the Customs liability in question was never shown to have

been placed before or dealt with by the Resolution Professional, the

Committee of Creditors [hereinafter referred to as „CoC‟] or the

W.P.(C) 10387/2026 Page 3 of 31

National Company Law Tribunal [hereinafter referred to as the

„NCLT‟]. It is the reasoning of the Adjudicating Authority that mere

reliance upon the NCLT Order approving the Resolution Plan was

insufficient, particularly when the Petitioner had not produced

material establishing that the subject customs liability formed part of

the claims considered under the Resolution Plan. The Respondent-

Authority has further taken note of the fact that the pendency of the

CIRP was brought to its notice only at the stage of the final personal

hearing.

FACTUAL MATRIX:

4. The facts, insofar as relevant for adjudication of the present

controversy, may briefly be noticed.

5. On 15.09.2023, the Petitioner imported Digital and Network

Video Recorders, described as AVASYS New Digital Video

Recording System with Encoder, at a combined assessable value of

Rs.45,40,569/- vide Bill of Entry No.7856824. The goods were

classified under CTH 85219090 and the Petitioner availed Basic

Customs Duty at the rate of 10% under Serial No.499A of CBIC

Notification No.50/2017-Customs dated 30.06.2017. The import

transaction was thus effected prior to commencement of the CIRP.

6. On 03.06.2024, the NCLT, Allahabad Bench, admitted

Company Petition (IB) No.330/ALD/2018, filed by ICICI Bank

Limited under Section 7 of the IBC, and commenced CIRP against the

Petitioner. The said date constituted the Insolvency Commencement

Date. A public announcement inviting claims from creditors was

W.P.(C) 10387/2026 Page 4 of 31

thereafter issued, and 17.06.2024 was prescribed as the last date for

submission of claims under Regulation 12(1) of the IBBI (Insolvency

Resolution Process for Corporate Persons) Regulations, 2016

[hereinafter referred to as „CIRP Regulations‟]. According to the

Petitioner, no claim was submitted by the Customs Department within

the prescribed period.

7. During the pendency of the CIRP, the Additional

Commissioner of Customs issued a Pre-Notice Consultation letter

dated 24.07.2025 under Section 28(1) of the Act, alleging that the

Digital and Network Video Recorders imported by the Petitioner were

not eligible for the benefit of Serial No.499A of Notification

No.50/2017-Customs and were liable to Basic Customs Duty at 20%

instead of 10%. A short levy of Rs.5,89,366/- was accordingly

alleged.

8. Thereafter, Show Cause Notice No.27/2025-26 dated

10.09.2025 [hereinafter referred to as „SCN‟] was issued under

Section 28(1) of the Act, proposing rejection of the benefit of Serial

No.499A of the aforesaid Notification, recovery of differential

customs duty of Rs.5,89,366/- along with interest under Section 28AA

of the Act, and imposition of penalty under Sections 112(a)(ii) and/or

117 of the Act. Personal hearings were thereafter scheduled on

29.10.2025, 19.11.2025, 11.02.2026, 19.03.2026 and 19.05.2026.

9. In the meantime, the CoC approved the Resolution Plan

submitted by Adani Enterprises Limited on 31.10.2025. The RP

thereafter submitted an application under Sections 30(6) and 31(1) of

W.P.(C) 10387/2026 Page 5 of 31

the IBC before the NCLT seeking approval of the Resolution Plan.

The NCLT ultimately approved the Resolution Plan vide Order dated

17.03.2026. The Petitioner states that the Resolution Plan thereby

became binding under Section 31(1) of the IBC upon the Petitioner

and all stakeholders, including governmental authorities to whom

statutory dues were owed.

10. On 18.05.2026, the Petitioner addressed written submissions to

the Additional Commissioner of Customs, enclosing the NCLT Order

dated 17.03.2026. The Petitioner informed the Department that no

claim had been submitted by the Customs Department before the RP

within the prescribed timelines and relied upon Clause 4.12.1 of the

Approved Resolution Plan, under which claims pertaining to the

period prior to the CIRP Commencement Date which had not been

submitted with the RP, or had been rejected or not verified, were to

stand extinguished and become NIL.

11. The Petitioner also relied upon Section 31(1) of the IBC and

contended that the Approved Resolution Plan was binding upon the

Central Government and other governmental authorities. It was further

contended that the Customs Department had failed to submit its claim

within the original period prescribed under Regulation 12(1), the

extended period under the CIRP Regulations, or the further period

contemplated under Regulations 13(1B) and 13(1C).

12. Despite the aforesaid submissions, the Impugned Order dated

02.06.2026 came to be passed. The Respondent-Authority confirmed

the differential customs duty of Rs.5,89,366/- under Section 28(1),

W.P.(C) 10387/2026 Page 6 of 31

directed recovery of interest under Section 28AA and, while declining

the penalty proposed under Section 112(a)(ii), imposed a penalty of

Rs.4,00,000/- under Section 117 of the Act.

13. In the Impugned Order, the Respondent-Authority recorded that

the Petitioner had not produced material demonstrating that the

Customs liability had been disclosed before the RP or the NCLT or

that the subject demand had formed part of the claims considered and

dealt with under the Approved Resolution Plan. The Respondent-

Authority further observed that the Petitioner had disclosed the

existence of the CIRP to the Department only at the stage of the

personal hearing held on 19.05.2026. On that basis, it concluded that

mere reliance upon the NCLT Order was insufficient to establish that

the Customs proceedings had come to an end.

14. The Impugned Order also records that the authorised

representative of the Petitioner had, during the personal hearing, stated

that the Petitioner was willing to discharge the dues arising from the

SCN and that payment could not be made due to technical difficulties

on the ICEGATE portal. The Respondent-Authority, therefore,

proceeded to hold that there was no dispute on the merits of the

classification or exemption issue and considered the principal

controversy to be the effect of the NCLT proceedings and the

Approved Resolution Plan.

15. The present Writ Petition came to be instituted thereafter,

challenging the Impugned Order principally on the ground that the

demand pertains to a pre-CIRP transaction and that the Customs

W.P.(C) 10387/2026 Page 7 of 31

Department admittedly failed to submit its claim during the CIRP. The

Petitioner contends that, by operation of Section 31(1) read with

Section 238 of the IBC and Clause 4.12.1 of the Approved Resolution

Plan, the liability stood extinguished upon approval of the Resolution

Plan and could not thereafter be adjudicated or recovered.

CONTENTIONS OF THE PARTIES:

16. Heard learned Counsel representing the Petitioner and learned

Counsel representing the Respondents and perused the pleadings, the

Impugned Order and the material placed on record.

17. Learned Counsel representing the Petitioner has made the

following submissions:

i. The entire customs liability arises from the import dated

15.09.2023 and thus pertains to a period prior to the Insolvency

Commencement Date of 03.06.2024. The Customs Department,

despite being an Operational Creditor, admittedly failed to

submit any claim before the RP within the prescribed timelines.

ii. Upon approval of the Resolution Plan by the NCLT

under Section 31(1) of the IBC, all claims which did not form

part of the Resolution Plan stood extinguished. Reliance is

placed upon the judgment of the Supreme Court in

Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset

Reconstruction Co. Ltd.

1

, particularly the principle that

statutory dues owed to the Central Government, State

1

(2021) 9 SCC 657

W.P.(C) 10387/2026 Page 8 of 31

Government or local authorities, if not forming part of the

Resolution Plan, stand extinguished and proceedings in respect

thereof cannot continue.

iii. It is submitted that the extinguishment of the Customs

claim operates by operation of law and Clause 4.12.1 of the

Approved Resolution Plan. The Petitioner cannot be required to

establish that the Customs liability was actually placed before

the RP, since it was the Customs Department which was

required to submit its claim during the CIRP. The Department‟s

failure to do so cannot create a liability against the Petitioner

after approval of the Resolution Plan.

iv. Reliance is further placed upon the decisions of this

Court in National Sewing Thread Company Limited v. Deputy

Commissioner of Income Tax & Ors.

2

and Ireo Fiveriver Pvt.

Ltd. v. Income Tax Department & Anr.

3

, to contend that once a

Resolution Plan is approved, the successful resolution applicant

cannot be burdened with liabilities which were not specified or

factored into the Resolution Plan. Reliance is also placed upon

Surya Manufacturing Private Limited v. Assistant

Commissioner of Income Tax & Ors.

4

and Garg Inox Ltd. &

Anr. v. Union of India & Ors.

5

, stated to have applied the same

principle in relation to post-CIRP demands.

2

2024 SCC OnLine Del 4426

3

2024 SCC OnLine Del 5885

4

2025 SCC OnLine Del 3127

5

2026 SCC OnLine Del 2581

W.P.(C) 10387/2026 Page 9 of 31

v. It is further submitted that the present case warrants

exercise of writ jurisdiction notwithstanding the availability of a

statutory remedy under the Customs Act. Reliance is placed

upon Ghanashyam Mishra & Sons (P) Ltd. (supra), where,

according to the Petitioner, the Supreme Court declined to

relegate the parties to an alternative remedy in respect of claims

which had already stood extinguished under the IBC.

vi. The Petitioner has also relied upon the CBIC Standard

Operating Procedure dated 23.05.2022, Instruction

No.1083/04/2022-CX09, to submit that the Customs authorities

themselves recognise their status as Operational Creditors and

the necessity of timely submission of claims during CIRP

proceedings.

18. Per contra, learned counsel representing the Respondents has

made the following submissions:

i. The pendency of CIRP does not bar the Customs

Authorities from determining the customs duty, interest or

penalty payable by the Corporate Debtor. Reliance is placed

upon ABG Shipyard Liquidator v. Central Board of Indirect

Taxes & Customs

6

, wherein the Supreme Court held that the

Customs Authorities can determine the quantum of customs

duty, though recovery thereof would remain subject to the

provisions of the IBC.

6

(2023) 1 SCC 472

W.P.(C) 10387/2026 Page 10 of 31

ii. Pendency of CIRP does not impede framing of an

assessment, though recovery of the assessed liability cannot be

undertaken contrary to the IBC. In this regard, reference can be

made to the decision in M/s Rajesh Projects India Ltd. v.

Commissioner, Central Tax, Delhi West & Ors.

7

.

iii. The present proceedings concern determination of the

differential customs duty arising from the Bill of Entry dated

15.09.2023 and do not, by themselves, constitute recovery

proceedings. The Respondents, therefore, contend that the

Impugned Order cannot be assailed merely on the ground that

the CIRP was pending.

iv. Further, reliance is placed upon the decisions in State

Tax Officer v. Rainbow Papers Ltd.

8

to submit that statutory

dues cannot be disregarded while considering the effect of a

Resolution Plan and that the treatment of such dues has to be

examined in the context of the statutory scheme of the IBC and

the Resolution Plan.

v. The Petitioner had not established before the

Adjudicating Authority that the Customs Department had

submitted, or that the subject liability had otherwise formed part

of, the claims considered in the CIRP. The Respondents

consequently dispute the Petitioner‟s contention that the

liability stood extinguished merely upon approval of the

Resolution Plan. The Impugned Order has also noticed that the

7

W.P.(C) 2647/2023 (DHC)

W.P.(C) 10387/2026 Page 11 of 31

pendency of the CIRP was brought to the notice of the

Department only at the stage of final hearing.

vi. The Petitioner participated in the adjudication

proceedings and was afforded repeated opportunities of hearing.

The Impugned Order records that the Petitioner‟s authorised

representative had expressed willingness to discharge the dues.

vii. Lastly, insofar as the Petitioner challenges the Impugned

Order on merits, an efficacious statutory remedy of appeal is

available under the Customs Act. Reliance is placed upon M/s

Rajesh Projects India Ltd. (supra), where this Court declined

to entertain the challenge on merits on account of the

availability of the statutory appellate remedy.

19. No other submissions have been made by the learned Counsel

representing the respective parties at this stage.

ANALYSIS AND FINDINGS:

20. The controversy which arises for consideration is a narrow one.

The customs liability sought to be enforced through the Impugned

Order arises from an import transaction dated 15.09.2023, which

admittedly preceded the Insolvency Commencement Date of

03.06.2024. The question is whether, after commencement of CIRP,

approval of the Resolution Plan by the NCLT on 17.03.2026 and the

consequent binding effect of the Resolution Plan under Section 31(1)

8

(2023) 9 SCC 545

W.P.(C) 10387/2026 Page 12 of 31

of the IBC, the Respondents could continue to adjudicate and enforce

a claim which was not submitted before the RP.

21. The answer to the aforesaid question requires the statutory

scheme of the IBC to be considered first. The IBC was enacted with

the object of consolidating and amending the law relating to

insolvency resolution and, importantly, to ensure resolution in a time-

bound manner, maximise the value of assets, to promote

entrepreneurship, and balance the interests of stakeholders. The

scheme is consequently not one which merely provides a forum for

recovery of individual debts. It seeks to achieve resolution of the

Corporate Debtor as a going concern within a defined and structured

process.

22. The expression “claim” assumes central significance in this

scheme. Section 3(6) of the IBC defines “claim” as follows:

“3. Definitions

In this code, unless the context otherwise requires,-

…

(6) „claim‟ means—

(a) a right to payment, whether or not such right is

reduced to judgment, fixed, disputed, undisputed, legal, equitable,

secured or unsecured;

(b) right to remedy for breach of contract under any law

for the time being in force, if such breach gives rise to a right to

payment, whether or not such right is reduced to judgment, fixed,

matured, unmatured, disputed, undisputed, secured or unsecured;

…”

23. The definition is deliberately wide. A “claim” is not confined to

a liability which has crystallised into an adjudicated demand or a

decree. The legislature has expressly included a right to payment

W.P.(C) 10387/2026 Page 13 of 31

irrespective of whether it has been reduced to judgment, whether it is

fixed or disputed and, in clause (b), whether it is matured or

unmatured. The statutory scheme therefore does not contemplate that

a creditor can await adjudication of its entitlement and thereafter seek

to introduce the resulting liability into a concluded resolution process.

24. From the bare reading of the definition of „claim‟ in IBC, it

becomes evident that the existence of a claim is referable to the

underlying right to payment and not merely to the subsequent

adjudication or quantification of that right. Thus, the fact that the

Customs Department had not, as on the Insolvency Commencement

Date, adjudicated the differential duty does not take the underlying

customs liability outside the expression “claim” under the IBC.

25. The distinction between “claim” and “debt” is also material.

Section 3(11) of the IBC defines “debt” to mean a liability or

obligation in respect of a claim which is due from any person and

includes financial debt and operational debt. The statutory scheme

therefore proceeds from the existence of the underlying claim and

does not make its prior adjudication a condition for its recognition in

the insolvency process.

26. The aforesaid interpretation is also consistent with the scheme

governing submission of claims. Upon commencement of CIRP, the

Interim RP is required to make a public announcement inviting claims

from creditors. Regulation 6 of the CIRP Regulations requires the

public announcement to be made immediately and to be published in

an English and a regional language newspaper with wide circulation,

W.P.(C) 10387/2026 Page 14 of 31

besides being hosted on the website of the Corporate Debtor and the

website designated by the Board. The announcement is also required

to specify the last date for submission of proofs of claim.

27. The statutory mechanism thus does not proceed on the basis that

the Corporate Debtor must individually approach every possible

creditor and inform such creditor of the commencement of CIRP. The

legislature has prescribed a public mechanism precisely for this

purpose. In the present case, the Public Announcement was admittedly

issued on 06.06.2024 and 17.06.2024 was prescribed as the last date

for submission of claims. The record further establishes that the

Customs Department did not submit any claim before the RP within

the prescribed period.

28. The Respondents have sought to contend that the Customs

Department was not separately informed of the CIRP. The contention

cannot be accepted. Once the statutory mechanism of public

announcement has been followed, there is no further requirement

shown to have been imposed upon the Corporate Debtor to

individually notify every statutory authority which may potentially

have a claim against it. The responsibility of identifying and filing its

claim lies upon the creditor. The Respondents cannot, therefore, rely

upon an alleged absence of individual intimation to overcome their

failure to participate in the statutory process.

29. More importantly, the present claim was not even an unknown

or subsequently arising liability. The underlying transaction had

already taken place on 15.09.2023. The customs authorities were,

W.P.(C) 10387/2026 Page 15 of 31

therefore, dealing with a transaction which preceded the Insolvency

Commencement Date by several months. The subsequent issuance of

the Pre-Notice Consultation letter on 24.07.2025 and the SCN on

10.09.2025 did not alter the character of the underlying liability for

purposes of the IBC.

30. The importance of the aforesaid statutory scheme becomes

clearer when Section 31(1) of the IBC is considered. The provision, in

its present form, reads as under:

“31. Approval of resolution plan

(1) If the Adjudicating Authority is satisfied that the

resolution plan as approved by the committee of creditors under

sub-section (4) of section 30 meets the requirements as referred to

in sub-section (2) of section 30, it shall by order approve the

resolution plan which shall be binding on the corporate debtor and

its employees, members, creditors, including the Central

Government, any State Government or any local authority to whom

a debt in respect of the payment of dues arising under any law for

the time being in force, such as authorities to whom statutory dues

are owed, guarantors and other stakeholders involved in the

resolution plan.

PROVIDED that the Adjudicating Authority shall, before

passing an order for approval of resolution plan under this sub-

section, satisfy that the resolution plan has provisions for its

effective implementation.”

31. The reference to the Central Government, State Governments

and local authorities was introduced by the Insolvency and

Bankruptcy Code (Amendment) Act, 2019 [hereinafter referred to as

„2019 Amendment‟].

32. The 2019 Amendment assumes significance in the present

controversy. It expressly brought governmental authorities to whom

statutory dues are owed within the class of persons upon whom an

approved Resolution Plan is binding. The said amendment was

W.P.(C) 10387/2026 Page 16 of 31

considered by the Supreme Court in Ghanashyam Mishra & Sons (P)

Ltd. (supra), where the Court explained that the legislative intent was

to ensure that claims are frozen upon approval of the Resolution Plan

and that the Successful Resolution Applicant is able to commence

business on a clean slate. The judgment also treated the amendment as

declaratory and clarificatory in nature. The relevant portion of the said

decision is extracted hereinbelow for ready reference:

“93. As discussed hereinabove, one of the principal objects

of the I&B Code is providing for revival of the corporate debtor

and to make it a going concern. The I&B Code is a complete Code

in itself. Upon admission of petition under Section 7 there are

various important duties and functions entrusted to RP and CoC.

RP is required to issue a publication inviting claims from all the

stakeholders. He is required to collate the said information and

submit necessary details in the information memorandum. The

resolution applicants submit their plans on the basis of the details

provided in the information memorandum. The resolution plans

undergo deep scrutiny by RP as well as CoC. In the negotiations

that may be held between CoC and the resolution applicant,

various modifications may be made so as to ensure that while

paying part of the dues of financial creditors as well as operational

creditors and other stakeholders, the corporate debtor is revived

and is made an on-going concern. After CoC approves the plan,

the adjudicating authority is required to arrive at a subjective

satisfaction that the plan conforms to the requirements as are

provided in sub-section (2) of Section 30 of the I&B Code. Only

thereafter, the adjudicating authority can grant its approval to the

plan. It is at this stage that the plan becomes binding on the

corporate debtor, its employees, members, creditors, guarantors

and other stakeholders involved in the resolution plan. The

legislative intent behind this is to freeze all the claims so that the

resolution applicant starts on a clean slate and is not flung with

any surprise claims. If that is permitted, the very calculations on

the basis of which the resolution applicant submits its plans

would go haywire and the plan would be unworkable.

94. We have no hesitation to say that the words “other

stakeholders” would squarely cover the Central Government, any

State Government or any local authorities. The legislature

noticing that on account of obvious omission certain tax

authorities were not abiding by the mandate of the I&B Code and

continuing with the proceedings, has brought out the 2019

W.P.(C) 10387/2026 Page 17 of 31

Amendment so as to cure the said mischief. We therefore hold

that the 2019 Amendment is declaratory and clarificatory in

nature and therefore retrospective in operation.

***

Conclusion

102. In the result, we answer the questions framed by us as

under:

102.1. That once a resolution plan is duly approved by the

adjudicating authority under sub-section (1) of Section 31, the

claims as provided in the resolution plan shall stand frozen and

will be binding on the corporate debtor and its employees,

members, creditors, including the Central Government, any State

Government or any local authority, guarantors and other

stakeholders. On the date of approval of resolution plan by the

adjudicating authority, all such claims, which are not a part of

resolution plan, shall stand extinguished and no person will be

entitled to initiate or continue any proceedings in respect to a

claim, which is not part of the resolution plan.

102.2. The 2019 Amendment to Section 31 of the I&B Code is

clarificatory and declaratory in nature and therefore will be

effective from the date on which the I&B Code has come into effect.

102.3. Consequently all the dues including the statutory dues

owed to the Central Government, any State Government or any

local authority, if not part of the resolution plan, shall stand

extinguished and no proceedings in respect of such dues for the

period prior to the date on which the adjudicating authority

grants its approval under Section 31 could be continued.”

(Emphasis supplied.)

33. The same principles have been noticed by this Court in Ireo

Fiveriver Pvt. Ltd. (supra), while relying upon the decision of the

Supreme Court in Ghanashyam Mishra & Sons (P) Ltd. (supra) and

Essar Steel India Ltd. Committee of Creditors v. Satish Kumar

Gupta

9

. The relevant extracts of the same is reproduced hereinbelow:

“4. We also take note of the identical position which was

expressed by the Supreme Court in Essar Steel India Ltd.

Committee of Creditors v. Satish Kumar Gupta, [(2020) 8 SCC

9

(2020) 8 SCC 531

W.P.(C) 10387/2026 Page 18 of 31

531] where the following pertinent observations came to be

made:—

“105. Section 31(1) of the Code makes it clear that once a

resolution plan is approved by the Committee of Creditors it shall

be binding on all stakeholders, including guarantors. This is for

the reason that this provision ensures that the successful

resolution applicant starts running the business of the corporate

debtor on a fresh slate as it were. In SBI v. V.

Ramakrishnan, (2018) 17 SCC 394, this Court relying upon

Section 31 of the Code has held:

“25. Section 31 of the Act was also strongly relied upon by

the respondents. This section only states that once a resolution

plan, as approved by the Committee of Creditors, takes effect, it

shall be binding on the corporate debtor as well as the

guarantor. This is for the reason that otherwise, under

Section 133 of the Contract Act, 1872, any change made to the

debt owed by the corporate debtor, without the surety's consent,

would relieve the guarantor from payment. Section 31(1), in

fact, makes it clear that the guarantor cannot escape payment as

the resolution plan, which has been approved, may well include

provisions as to payments to be made by such guarantor. This is

perhaps the reason that Annexure VI(e) to Form 6 contained in

the Rules and Regulation 36(2) referred to above, require

information as to personal guarantees that have been given in

relation to the debts of the corporate debtor. Far from

supporting the stand of the respondents, it is clear that in point

of fact, Section 31 is one more factor in favour of a personal

guarantor having to pay for debts due without any moratorium

applying to save him.

106. Following this judgment in SBI v. V.

Ramakrishnan, (2018) 17 SCC 394, it is difficult to accept Shri

Rohatgi's argument that that part of the resolution plan which

states that the claims of the guarantor on account of subrogation

shall be extinguished, cannot be applied to the guarantees

furnished by the erstwhile Directors of the corporate debtor. So

far as the present case is concerned, we hasten to add that we are

saying nothing which may affect the pending litigation on account

of invocation of these guarantees. However, Nclat judgment being

contrary to Section 31(1) of the Code and this Court's judgment

in SBI v. V. Ramakrishnan, (2018) 17 SCC 394, is set aside.

107. For the same reason, the impugned Nclat judgment

[Standard Chartered Bank v. Satish Kumar Gupta, 2019 SCC

OnLine NCLAT 388] in holding that claims that may exist apart

from those decided on merits by the resolution professional and

by the Adjudicating Authority/Appellate Tribunal can now be

W.P.(C) 10387/2026 Page 19 of 31

decided by an appropriate forum in terms of Section 60(6) of the

Code, also militates against the rationale of Section 31 of the

Code. A successful resolution applicant cannot suddenly be faced

with “undecided” claims after the resolution plan submitted by

him has been accepted as this would amount to a hydra head

popping up which would throw into uncertainty amounts payable

by a prospective resolution applicant who would successfully take

over the business of the corporate debtor. All claims must be

submitted to and decided by the resolution professional so that a

prospective resolution applicant knows exactly what has to be

paid in order that it may then take over and run the business of

the corporate debtor. This the successful resolution applicant

does on a fresh slate, as has been pointed out by us

hereinabove. For these reasons, Nclat judgment must also be set

aside on this count.

5. In view of the aforesaid principles, the successful

resolution applicant cannot be foisted with any liabilities other

than those which are specified and factored in the Resolution

Plan and which may pertain to a period prior to the resolution

plan itself having been approved.

(Emphasis supplied.)

34. Similarly, in Vaibhav Goel & Anr. v. Deputy Comissioner of

Income Tax & Anr.

10

, the Supreme Court re-iterated the same line of

reasoning. The relevant paragraph of the aforesaid judgment is

produced below:

“In view of the declaration of law made by this Court, all the dues

including the statutory dues owed to the Central Government, if not a

part of the Resolution Plan, shall stand extinguished and no

proceedings could be continued in respect of such dues for the period

prior to the date on which the adjudicating authority grants its

approval under Section 31 of the IB Code. In this case, the income tax

dues of the CD for the assessment years 2012-13 and 2013-14 were

not part of the approved Resolution Plan. Therefore, in view of sub-

section (1) of Section 31, as interpreted by this Court in the above

decision, the dues of the first respondent owed by the CD for the

assessment years 2012-13 and 2013-14 stand extinguished. ”

35. Therefore, the expression “binding” occurring in Section 31(1)

of the IBC cannot be treated as a mere procedural consequence of

10

2025 INSC 375

W.P.(C) 10387/2026 Page 20 of 31

approval. It gives finality to the treatment of claims under the

Resolution Plan. Once the Adjudicating Authority approves the plan,

the Corporate Debtor, its creditors and the governmental authorities

specifically included within Section 31(1) are bound by the treatment

accorded to the claims under that plan.

36. As noticed hereinabove, this principle has been consistently

recognised by the Supreme Court. The Court has explained that

Section 31(1) of the IBC ensures that the Successful Resolution

Applicant takes over the business of the Corporate Debtor on a fresh

slate. The rationale is that the Resolution Applicant must be able to

determine the liabilities which it is undertaking on the basis of the

Resolution Plan and cannot thereafter be confronted with undisclosed

claims. The Resolution Plan is thereafter formulated on the basis of

the liabilities which emerge through that process. Once the plan is

approved, the claims stand frozen so that the Successful Resolution

Applicant is not subsequently confronted with “surprise claims”.

37. The consequence is therefore not dependent upon whether the

creditor had consciously agreed to the extinguishment of its claim.

The binding character of the Resolution Plan arises by operation of

Section 31(1) of the IBC. The creditor‟s failure to submit its claim

cannot have the effect of taking the claim outside the insolvency

process and preserving an independent right to proceed against the

Corporate Debtor after approval of the plan.

38. The position is reinforced by Section 238 of the IBC, which

contains an express non-obstante clause and gives the IBC overriding

W.P.(C) 10387/2026 Page 21 of 31

effect in the event of inconsistency with another law. The same is

extracted hereinbelow:

“The provisions of this Code shall have effect, notwithstanding

anything inconsistent therewith contained in any other law for the

time being in force or any instrument having effect by virtue of any

such law.”

39. This Court is also mindful of the fact that the Customs Act is

undoubtedly a special enactment governing the levy, assessment and

collection of customs duties. However, the issue before this Court is

not whether the Customs Act confers power upon the Respondent-

Authority to determine a customs liability in the ordinary course. The

issue is whether such power can be exercised in a manner which

defeats the statutory consequences flowing from the IBC after

approval of a Resolution Plan. In case of an inconsistency between the

two statutory regimes, Section 238 requires the provisions of the IBC

to prevail.

40. This distinction was considered by the Supreme Court in ABG

Shipyard (supra). The Court recognised that the Customs authorities

could determine the quantum of customs duty and other statutory

dues, but could not proceed to enforce recovery contrary to the

moratorium and the scheme of the IBC. The Court harmonised the two

enactments by permitting the determination of the liability while

restricting its enforcement in accordance with the IBC.

41. The decision in ABG Shipyard (supra) is therefore not

authority for the proposition that a customs authority may continue

indefinitely with proceedings concerning a pre-CIRP liability

irrespective of what subsequently transpires in the CIRP. It recognises

W.P.(C) 10387/2026 Page 22 of 31

the limited power to determine liability during the insolvency process.

The position after approval of the Resolution Plan stands on a

different footing because Section 31(1) of the IBC then gives finality

to the treatment of claims and makes the plan binding upon

governmental authorities as well. The distinction between

determination and enforceability is therefore material.

42. This Court is also mindful of the decision in M/s Rajesh

Projects India Ltd. (supra), relied upon by the Respondents. The said

decision recognised that pendency of CIRP does not, by itself, prevent

the competent authority from framing an assessment, although

recovery cannot be undertaken contrary to the IBC. The decision,

however, does not concern the consequence of an approved

Resolution Plan upon a claim which was not submitted during CIRP.

The question in the present case arises at a subsequent stage and is

governed by Section 31(1) read with Section 238 of the IBC.

43. The Respondents have also relied upon Rainbow Papers Ltd.

(supra) to contend that statutory dues cannot simply be disregarded in

the insolvency process. The reliance, however, cannot carry the

Respondents beyond the proposition actually laid down in that

decision. The observations in Rainbow Papers Ltd. were subsequently

considered by the Supreme Court in Paschimanchal Vidyut Vitran

Nigam Ltd. v. Raman Ispat Pvt. Ltd.

11

. The latter decision expressly

confined the observations in Rainbow Papers to the facts and

11

(2023) 10 SCC 60

W.P.(C) 10387/2026 Page 23 of 31

statutory setting which arose before the Court. The relevant extracts of

the same is reproduced hereinbelow:

“52.PVVNL had relied upon the decision in Rainbow

Papers [STO v. Rainbow Papers Ltd., (2023) 9 SCC 545] . In that

case, the issue involved was interpretation of Section 48 of the

Gujarat Value Added Tax Act, 2003 which enacted that any

amount payable towards tax or penalty by any person would

constitute a “first charge” on the property of such dealer or

person. The corporate debtor had defaulted in payment of its tax

dues and recovery proceedings had been initiated. In the

meanwhile, insolvency proceedings had commenced. During the

resolution process, the State tax authorities claimed that the dues

payable had to be accrued previously and relied upon Section 48,

in addition to Section 53 IBC. The State contended that the non

obstante clause in the State enactment and the non obstante

clause in IBC operated at different fields, and the State had to be

treated as a “secured creditor” by virtue of Section 48 of the State

Act. This was rejected by the NCLT [Ramachandra D.

Choudhary v. Indian Overseas Bank (CoC), 2019 SCC OnLine

NCLT 6672] and NCLAT [Tourism Finance Corpn. of India

Ltd. v. Rainbow Papers Ltd., 2019 SCC OnLine NCLAT 910] .

However, this Court took note of Sections 30 and 31 IBC and

certain other provisions and held that NCLT had erred in its

observations. It was held that : ( Rainbow Papers

case [STO v. Rainbow Papers Ltd., (2023) 9 SCC 545] , SCC p.

569, paras 56-58)

“56. Section 48 of the GVAT Act is not contrary to or

inconsistent with Section 53 or any other provisions of IBC. Under

Section 53(1)(b)(ii), the debts owed to a secured creditor, which

would include the State under the GVAT Act, are to rank equally

with other specified debts including debts on account of workman's

dues for a period of 24 months preceding the liquidation

commencement date.

57. As observed above, the State is a secured creditor under the

GVAT Act. Section 3(30) IBC defines secured creditor to mean a

creditor in favour of whom security interest is credited. Such

security interest could be created by operation of law. The

definition of “secured creditor” in IBC does not exclude any

Government or Governmental Authority.

58. We are constrained to hold that the appellate authority

(NCLAT) and the adjudicating authority erred in law in rejecting

the application/appeal of the appellant. As observed above, delay

in filing a claim cannot be the sole ground for rejecting the claim.”

W.P.(C) 10387/2026 Page 24 of 31

53.Rainbow Papers [STO v. Rainbow Papers Ltd., (2023) 9

SCC 545] did not notice the “waterfall mechanism” under Section

53—the provision had not been adverted to or extracted in the

judgment. Furthermore, Rainbow Papers [STO v. Rainbow Papers

Ltd., (2023) 9 SCC 545] was in the context of a resolution process

and not during liquidation. Section 53, as held earlier, enacts the

waterfall mechanism providing for the hierarchy or priority of

claims of various classes of creditors. The careful design of Section

53 locates amounts payable to secured creditors and workmen at

the second place, after the costs and expenses of the liquidator

payable during the liquidation proceedings. However, the dues

payable to the government are placed much below those of secured

creditors and even unsecured and operational creditors. This

design was either not brought to the notice of the Court in Rainbow

Papers [STO v. Rainbow Papers Ltd., (2023) 9 SCC 545] or was

missed altogether. In any event, the judgment has not taken note

of the provisions of IBC which treat the dues payable to the

secured creditors at a higher footing than dues payable to the

Central or the State Government.

***

58. In view of the above discussion, it is held that the reliance

on Rainbow Papers [STO v. Rainbow Papers Ltd., (2023) 9 SCC

545] is of no avail to the appellant. In this Court's view, that

judgment has to be confined to the facts of that case alone.”

(Emphasis supplied.)

44. The subsequent jurisprudence therefore does not support a

general proposition that statutory dues enjoy a status which permits

them to be enforced outside the framework of the IBC. The IBC itself

expressly recognises governmental authorities within Section 31(1) of

the IBC. The question is consequently not whether statutory dues are

capable of constituting claims, but whether the particular statutory

dues have been dealt with in the insolvency process and what

consequence follows from their omission upon approval of the

Resolution Plan.

45. The Respondents‟ reliance upon the fact that the Customs

liability was not before the NCLT also does not advance their case.

W.P.(C) 10387/2026 Page 25 of 31

The very purpose of the claim-submission process is to enable the RP

to collate claims and enable the Resolution Applicant and the CoC to

take them into account. If a creditor elects not to submit its claim

despite the public announcement and the further statutory

opportunities available under the CIRP Regulations, the absence of

that claim from the material placed before the NCLT cannot

subsequently be converted into a reason for permitting that creditor to

proceed independently.

46. The Approved Resolution Plan in the present case goes even

further. Clause 4.12.1 specifically provides for claims pertaining to the

period prior to the CIRP Commencement Date which have not been

submitted with the Resolution Professional, or have been submitted

and rejected or not verified. Such claims are expressly stipulated to

stand extinguished and become NIL upon approval of the Resolution

Plan. The Petitioner specifically brought this provision to the notice of

the Respondent-Authority on 18.05.2026 along with the NCLT Order

dated 17.03.2026.

47. The Respondents‟ contention that the Petitioner was required to

establish that the Customs liability had been placed before the RP,

therefore, proceeds on an incorrect premise. The question is not

whether the Customs liability was considered by the RP despite the

Customs Department not filing a claim. The question is whether the

Customs Department had a claim arising from a pre-CIRP transaction

and whether it availed the statutory mechanism for submitting that

claim. The answer to both questions is clear.

W.P.(C) 10387/2026 Page 26 of 31

48. The underlying import was made on 15.09.2023. The CIRP

commenced on 03.06.2024. The Public Announcement was issued on

06.06.2024. No claim was submitted by the Customs Department. The

CoC approved the Resolution Plan on 31.10.2025 and the NCLT

approved it on 17.03.2026. These facts are not materially disputed.

49. The subsequent issuance of the SCN on 10.09.2025 cannot alter

this position. By that date, the CIRP had already been pending for

more than a year and the statutory process for submission and

verification of claims had been underway. The SCN itself could not

create a new liability for purposes of the IBC merely because the

Customs Department had chosen to adjudicate the underlying

transaction at a later stage. A claim under Section 3(6) of the IBC is

not rendered a post-CIRP claim merely because its quantification or

adjudication takes place subsequently.

50. The Respondents have placed emphasis on the fact that the

pendency of CIRP was brought to their notice only during the final

hearing. This circumstance also cannot alter the statutory

consequence. The obligation to submit the claim arises from the

commencement of CIRP and the public announcement, and not from

receipt of a personal communication from the Corporate Debtor. The

statutory scheme provides an independent mechanism for the creditor

to submit its claim. The record demonstrates that the Respondents did

not avail that mechanism.

51. There is another aspect which cannot be overlooked. The

Resolution Plan was not merely approved by the CoC, it was

W.P.(C) 10387/2026 Page 27 of 31

subsequently approved by the NCLT under Section 31(1) of the IBC.

The approval therefore attracted the statutory consequence of binding

all persons falling within the ambit of Section 31(1), expressly

including the Central Government and authorities to whom statutory

dues are owed. The Respondent-Authority cannot, therefore, proceed

on the footing that its statutory power under the Customs Act remains

wholly unaffected by the subsequent approval of the Resolution Plan.

52. The argument based upon the availability of an appeal under the

Customs Act must also be considered in this context. Ordinarily, this

Court would be slow to entertain a challenge to an adjudication order

where an efficacious statutory appellate remedy is available. However,

the present challenge does not principally concern the correctness of

classification, valuation or the quantum of customs duty. The central

issue is whether, in view of the IBC and the approved Resolution Plan,

the Respondent-Authority could continue with the proceedings in

respect of a pre-CIRP claim which had not been submitted during the

CIRP.

53. The existence of an appellate remedy under the Customs Act

cannot require the Petitioner to pursue a remedy under a statute which,

in the particular circumstances, is itself subject to the overriding

provisions and consequences of the IBC. The question of the binding

effect of an approved Resolution Plan and the extinguishment of

claims thereunder goes to the jurisdiction and legal authority to

continue the proceedings. The present case, therefore, falls outside the

ordinary category of a challenge merely directed against the merits of

assessment.

W.P.(C) 10387/2026 Page 28 of 31

54. The statement attributed to the authorised representative of the

Petitioner during the personal hearing that the Petitioner was willing

to discharge the dues also does not conclude the matter. An

observation made during adjudication proceedings, particularly when

the principal issue concerning the effect of the CIRP and the

Resolution Plan was being raised, cannot confer jurisdiction upon the

Respondent-Authority to enforce a liability which has otherwise

ceased to be enforceable by operation of the IBC. The legal

consequence of Section 31(1) cannot be waived or defeated by an

isolated statement made during personal hearing.

55. The object of the IBC would be defeated if a creditor, including

a statutory authority, were permitted to stand outside the CIRP, await

adjudication of a pre-CIRP liability and thereafter seek enforcement

against the resolved Corporate Debtor. Such a course would expose

the Successful Resolution Applicant to liabilities which were not

capable of being ascertained from the claims forming the basis of the

Resolution Plan. It would equally defeat the finality which Section

31(1) seeks to confer upon an approved Resolution Plan. The

legislative intent, as noticed by the Supreme Court, is to freeze the

claims so that the Successful Resolution Applicant can commence the

business on a clean slate.

56. It follows that the Customs Department was entitled, during the

CIRP, to determine the liability arising from the import transaction in

accordance with the Customs Act, subject always to the IBC. But once

the Resolution Plan came to be approved by the NCLT and became

binding under Section 31(1), the Respondent-Authority could not

W.P.(C) 10387/2026 Page 29 of 31

continue to enforce against the Corporate Debtor a pre-CIRP claim

which had not been submitted in the CIRP and which stood

extinguished under the Approved Resolution Plan.

57. The Impugned Order was passed on 02.06.2026, i.e. after the

NCLT had approved the Resolution Plan on 17.03.2026 and after the

Petitioner had expressly brought the said approval and Clause 4.12.1

to the notice of the Respondent-Authority on 18.05.2026. The

Respondent-Authority was thus required to consider the statutory

consequences of Section 31(1) read with Section 238 of the IBC

before proceeding to confirm the demand.

58. Instead, the Impugned Order proceeds substantially on the

premise that the Petitioner had not established that the Customs

liability had been disclosed before the RP or had formed part of the

claims considered under the Resolution Plan. That approach reverses

the statutory scheme. The relevant inquiry was whether the Customs

Department had submitted its claim pursuant to the public

announcement and within the opportunities available under the CIRP

Regulations. It admittedly had not.

59. The failure of the Respondents to submit their claim cannot, in

the circumstances, operate to the prejudice of the Corporate Debtor or

the Successful Resolution Applicant. The IBC does not contemplate

that a creditor who fails to participate in the CIRP acquires a superior

position after its conclusion. On the contrary, the consequence of the

statutory process is that the Resolution Plan, once approved, becomes

W.P.(C) 10387/2026 Page 30 of 31

binding and the claims not forming part of the plan cannot

subsequently be enforced so as to disturb the resolution.

60. This Court is therefore of the view that the Impugned Order

cannot be sustained insofar as it confirms the differential customs

duty, interest and penalty in respect of the pre-CIRP transaction. The

Respondent-Authority could not, after approval of the Resolution Plan

and extinguishment of the unfiled pre-CIRP claim, proceed to impose

a liability upon the Corporate Debtor contrary to Section 31(1) read

with Section 238 of the IBC.

61. The conclusion reached herein does not mean that the Customs

Act ceases to apply to the Corporate Debtor or that Customs

Authorities are divested of their statutory power to assess transactions.

The conclusion is confined to the consequence which the IBC attaches

to a claim arising prior to the Insolvency Commencement Date once

the Resolution Plan has been approved. The Customs Act and the IBC

operate in their respective fields, where the exercise of power under

the Customs Act comes into conflict with the binding consequences of

an approved Resolution Plan, Section 238 gives precedence to the

IBC.

62. In view of the aforesaid conclusion, it is not necessary for this

Court to examine the merits of the classification adopted by the

Respondent-Authority or the computation of differential customs duty.

Those issues have become academic in view of the conclusion that the

underlying pre-CIRP claim could not be enforced after approval of the

Resolution Plan.

W.P.(C) 10387/2026 Page 31 of 31

CONCLUSION:

63. For the aforesaid reasons, the Writ Petition succeeds. The

Impugned Order-in-Original dated 02.06.2026 is hereby quashed and

set aside.

64. It is, however, clarified that this Court has not expressed any

opinion on the merits of the classification of the imported goods or the

eligibility of the Petitioner for the benefit of Serial No.499A of

Notification No.50/2017-Customs. The Impugned Order is being set

aside on the ground that the liability arising from the pre-CIRP

transaction could not be adjudicated and enforced against the

Petitioner after approval of the Resolution Plan in the facts and

circumstances noticed hereinabove.

65. The Writ Petition is accordingly allowed. Pending application

also stands disposed of. There shall be no order as to costs.

ANIL KSHETARPAL, J.

SHAIL JAIN, J.

SEPTEMBER 02, 2026

sp/shah