1

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Rev.I.A.No.1/2023

In/and W.P.No.22983 of 2022

IN THE HIGH COURT OF ANDHRA PRADESH

***

+ Rev.I.A.No.1 of 2023 in/and W.P.No: 22983 of 2022

Between:

# Pydah Educational Academy,

10-22-07/35, Rednam Gardens,

Visakhapatnam-53002.

Rep. By its President Mr. Pydah Krishna Prasad

S/o. Late Shesha Giri Rao.

… Petitioner

(Review Petitioner)

$ AND

$ 1. State of Andhra Pradesh rep. By its Principal Secretary, Revenue

(Commercial Taxes).

2. Deputy Assistant Commissioner (ST)-I, M.G. Road (West Circle),

Vizianagaram.

3. Joint Commissioner (State Taxes) Vizianagaram District.

4. Assistant Commissioner of Commercial Taxes, Rajam Circle,

Vizianagaram.

5. Sub-Registrar, West & Dasannapeta, Vizianagaram.

6. The Commissioner & Inspector General of Registration and Stamps,

Edupugallu, Viajayawada.

...Respondents

Date of Judgment pronounced on : 09.05.2025

HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO

And

HON’BLE SRI JUSTICE T. MALLIKHARJUNA RAO

1. Whether Reporters of Local newspapers : Yes/No

May be allowed to see the judgments?

2. Whether the copies of judgment may be marked : Yes/No

to Law Reporters/Journals:

3. Whether The Lordship wishes to see the fair copy : Yes/No

Of the Judgment?

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Rev.I.A.No.1/2023

In/and W.P.No.22983 of 2022

*IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVAT I

* HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO

And

HON’BLE SRI JUSTICE T. MALLIKHARJUNA RAO

+ Rev.I.A.No.1 of 2023 in/and W.P.No.22983 of 2022

% Dated: 09-05-2025

Between:

# Pydah Educational Academy,

10-22-07/35, Rednam Gardens,

Visakhapatnam-53002.

Rep. By its President Mr. Pydah Krishna Prasad

S/o. Late Shesha Giri Rao.

… Petitioner

(Review Petitioner)

$ AND

$ 1. State of Andhra Pradesh rep. By its Principal Secretary, Revenue

(Commercial Taxes).

2. Deputy Assistant Commissioner (ST)-I, M.G. Road (West Circle),

Vizianagaram.

3. Joint Commissioner (State Taxes) Vizianagaram District.

4. Assistant Commissioner of Commercial Taxes, Rajam Circle,

Vizianagaram.

5. Sub-Registrar, West & Dasannapeta, Vizianagaram.

6. The Commissioner & Inspector General of Registration and Stamps,

Edupugallu, Viajayawada.

…. Respondents

! Counsel for Petitioner : Sri M. Naga Deepak

^Counsel for Review Petitioner : Sri K. Raghavacharyulu

^Counsel for Respondents: : G.P. for Commercial Tax

<GIST :

>HEAD NOTE:

? Cases referred:

1. (2021) 9 SCC 657

2. (2023) 10 SCC 60

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Rev.I.A.No.1/2023

In/and W.P.No.22983 of 2022

HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO

&

HON’BLE SRI JUSTICE T. MALLIKHARJUNA RAO

I.A.No.1 of 2023

In/and

W.P.No.22983 of 2022

ORDER:

(per Hon‘ble Sri Justice R.Raghunandan Rao)

The petitioner herein had purchased an extent of 12000 sq. yards in

Sy.Nos.98/1 and 170 of Cantonment Board, Block 2, Vizianagaram

Municipality & West Sub-Registration, under a registered deed of sale dated

31.07.2020 from M/s. Sri Lakshmi Srinivas Jute Mills Limited (hereinafter

referred to as the Jute Mills). This property had originally been mortgaged with

certain banks and financial institutions. On the basis of an understanding

between the vendor of the petitioner and these banks and financial

institutions, the aforesaid property came to be sold to the petitioner.

2. M/s. Sri Lakshmi Srinivas Jute Mills Limited, on account of its

financial difficulties, had defaulted payments to the Commercial Tax

Department, in relation to the dues arising out of the A.P. VAT Act, 2005. The

Commercial Tax Department, for recovery of its dues, had attached certain

properties of the Jute Mills by way of a notice of attachment dated 27.11.2020.

The Jute Mills sought to clear the tax dues, by way of installments, and sought

such a facility. As this facility was not given, the Jute Mills had approached

this Court by way of W.P.No.974 of 2021, which came to be disposed of, on

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In/and W.P.No.22983 of 2022

10.02.2021, permitting the Jute Mills to pay the dues in installments. Pursuant

to this order, the Jute Mills addressed a letter to the tax authorities to release

attachment of the property of the Jute Mills. After such attachment had been

raised, the Jute Mills again sold, to the petitioner, 10,000 sq. yards under a

registered deed of sale dated 30.03.2021. Subsequently, the Tax Department

again attached the properties of the Jute Mills as tax amounts were not being

paid. However, the properties sold to the petitioner were not included in the

letter of attachment dated 18.08.2021. Thereafter, the 4

th

respondent-

authority, passed an order, dated 20.10.2021, declaring the second deed of

sale, dated 30.03.2021, to be null and void. Aggrieved by the said order, the

petitioner had moved W.P.No.4847 of 2022.

3. At this Stage, Insolvency proceedings were initiated against the

Jute Mills, before the NCLT Bench, Amaravati, under the provisions of the

Insolvency and Bankruptcy Code, 2016 (for short ‗the IBC‘). The 2

nd

respondent, after the initiation of the insolvency proceedings, issued a letter,

dated 06.07.2022, to the 5

th

respondent seeking attachment of the entire land

of the Jute Mills including the land admeasuring 12000 sq. yards sold to the

petitioner, under the deed of sale dated 31.07.2020. The petitioner being

aggrieved by the inclusion of 12000 sq. yards, in the order of attachment and

subsequent process of recovery, had approached this Court by way of the

present writ petition.

4. The prayer in the writ petition is as follows:

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In/and W.P.No.22983 of 2022

―… to issue a writ or order or direction, more particularly in

the nature of a writ of Mandamus declaring the letter RR-

ActDy.AC(ST)-MG Road West VZM/AEO -2, dated 06.07.2022

issued by the Respondent No.2 to Respondent No.5 attaching

the Subject Property admeasuring 12,000 Sq. Yds., in

Sy.Nos.98/1 & 170 of Cantonment Ward, Block 2, Vizianagaram

Municipality and Vizianagaram West Sub-Registration District,

Covered under Document No.4405 of 2020 registered in the

office of Joint Sub-Registrar, Vizianagaram as being void,

illegal, arbitrary, without jurisdiction and violative of Article 14

and 300A of the Constitution of India and consequently set

aside the same and pass such further or other orders as may

deem fir and proper.‖

4. The petitioner had also taken the stand that the property of the

Jute Mills cannot be attached or brought to sale by virtue of Section 60(5) of

the IBC.

5. The 2

nd

respondent filed a counter denying these allegations and

contending that the property of the petitioner can be attached even after sale

to the petitioner. The Division Bench went into the provisions of Sections 25 to

27 of the A.P. VAT Act, 2005, regarding the method of recovery of tax and

other dues and held that the action of the respondent-authorities, in seeking to

attach the property and taking further steps to sell the property, was in order.

The Division Bench, also held that the Corporate Insolvency Resolution

Process was still pending, before the NCLT, and that the pendency of such a

process would not bar the State from selling the property of the Jute Mills to

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Rev.I.A.No.1/2023

In/and W.P.No.22983 of 2022

recover its dues. Accordingly, the Division Bench dismissed the writ petition,

on 08.08.2023.

6. Aggrieved by the said order, the petitioner had approached the

Hon‘ble Supreme Court by way of S.L.P.(C). No.20536 of 2023. The petitioner

had contended, before the Hon‘ble Supreme Court, that the entire issue is

covered by the judgment of the Hon‘ble Supreme Court in the case of

Ghanashyam Mishra and Sons Pr ivate Ltd., through the Authorized

Signatory vs. Edelweiss Asset Reconstruction Company Ltd., through

the Director and Ors.,

1

. The Hon‘ble Supreme Court, by an order dated

25.09.2023, had disposed of the Special Leave Petition, reserving liberty to

the petitioner to bring to the notice of the High Court, the facts, raised in the

Special Leave Petition, by way of a review petition. The Hon‘ble Supreme

Court had also observed that if a review petition is filed by the petitioner

herein, the same shall be considered in relation to the facts of the case and

law.

7. The petitioner has now filed this review petition before this Court.

The prayer in the review petition, is as follows:

―….this Hon‘ble Court may pleased to Review the Order

passed in Writ Petition No.22983 of 2022, dated

08.08.2023 and to pass such other order or orders as this

Hon‘ble Court may deem fit and proper….‖

1

(2021) 9 SCC 657

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8. Sri K. Raghavacharyulu, learned counsel appearing for the review

petitioner, while reiterating the grounds of review, would submit that certain

crucial facts had been suppressed by the respondents. He submits that the

insolvency process of the Jute Mills, had culminated in an order of approval, of

the resolution plan, dated 01.09.2022, passed by the NCLT Bench of

Amaravathi, whereunder the State Government had been given the status of

an operational creditor and had been awarded a sum of Rs.78,04,413/- as full

and final settlement of the claim of Rs.78,04,41,261/-. He would contend that

upon such payment, which is admitted, the State cannot make any further

claim against the Jute Mills as all the dues are fully and finally settled. Once

no further claim can be made, the question of enforcing further action on the

assets of the Jute Mills or against the purchasers of such properties would not

arise.

9. The learned counsel would rely upon paragraph 5.3.13 of the

resolution plan, which states as follows:

―5.3.13 – All claims that may be made against the

Corporate Debtor in relation to any payments required to

be made by the Corporate Debtor under the Applicable

Law or in relation to any breach, contravention or Non-

Compliance or breach of any Applicable Law or contract or

Permits (whether or not the Creditor was aware of such

Claim or such Claim notified to or claimed against the

Corporate Debtor at such time), shall immediately,

irrevocably and unconditionally stand abated, settled and

/or extinguished in perpetuity. No Creditor or Government

authority shall have any further rights or claims against the

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Corporate Debtor arising from the period prior to the

Settlement Date Tranche 1.‖

10. The learned counsel would contend that this resolution plan, had

been approved, by the NCLT Bench Amaravati, on 01.09.2022 and

subsequently, no claim of any nature can be made by the respondents. The

learned counsel would also contend that the respondents, being fully aware of

the fact that they have no further claim against the Jute Mills or the petitioner,

had deliberately suppressed these facts and had resisted W.P.No.22983 of

2022, as if the respondents could continue to recover dues, by attaching or

selling the lands sold to the petitioner herein. The learned counsel relies upon

the judgment of the Hon‘ble Supreme Court in the case of Paschimanchal

Vidyut Vitran Nigam Ltd., vs. Raman Ispat Private Limited & Ors.,

2

; State

Tax Officer vs. Rainbow Papers Limited. The judgment in Ghanashyam

Mishra and Sons Private Ltd., through the Authorised Signatory vs.

Edelweiss Asset Reconstruction Company Ltd., through the Director and

Ors., cited before the Hon‘ble Supreme Court would also have to be

considered.

Consideration of the Court:

11. The Corporate Insolvency Resolution Process (CIRP for short)

which starts with the filing of an application either under sections 7, 9 or 10 of

IBC, envisages certain intermediate steps of appointment of an Interim

Resolution Professional/Resolution Professional, constitution of the

2

(2023) 10 SCC 60

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In/and W.P.No.22983 of 2022

Committee of Creditors, collation of information and calling for applications

from interested entities to submit plans for the resolution of the insolvency

process, so as to revive the company. The resolution plans submitted by the

interested entities would be considered by the Committee of Creditors and a

decision would be taken to either accept one of the plans or to go for

liquidation of the company. In the present case a resolution plan was accepted

and the consequences of such acceptance would be considered. After, the

approval of the Committee of Creditors, the plan would be submitted to the

Adjudicating authority for approval. The adjudicating authority after

considering the plan and verifying whether it is in conformity with the

requirements of section 30, more specifically Section 30(2), of IBC would give

its approval.

12. The provisions of Section 30 and 31 of IBC are as follows:

―30. Submission of resolution plan.—(1) A resolution

applicant may submit a resolution plan along with an

affidavit stating that he is eligible under Section 29-A to

the resolution professional prepared on the basis of the

information memorandum.

(2) The resolution professional shall examine each

resolution plan received by him to confirm that each

resolution plan—

(a) provides for the payment of insolvency resolution

process costs in a manner specified by the Board in

priority to the payment of other debts of the corporate

debtor;

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(b) provides for the payment of debts of operational

creditors in such manner as may be specified by the

Board which shall not be less than—

(i) the amount to be paid to such creditors in the event

of a liquidation of the corporate debtor under Section 53;

or

(ii) the amount that would have been paid to such

creditors, if the amount to be distributed under the

resolution plan had been distributed in accordance with

the order of priority in sub-section (1) of Section 53,

whichever is higher, and provides for the payment of debts

of financial creditors, who do not vote in favour of the

resolution plan, in such manner as may be specified by

the Board, which shall not be less than the amount to be

paid to such creditors in accordance with sub-section (1)

of Section 53 in the event of a liquidation of the corporate

debtor.

Explanation 1.—For the removal of doubts, it is hereby

clarified that a distribution in accordance with the

provisions of this clause shall be fair and equitable to such

creditors.

Explanation 2.—For the purposes of this clause, it is

hereby declared that on and from the date of

commencement of the Insolvency and Bankruptcy Code

(Amendment) Act, 2019, the provisions of this clause shall

also apply to the corporate insolvency resolution process

of a corporate debtor—

(i) where a resolution plan has not been approved or

rejected by the adjudicating authority;

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(ii) where an appeal has been preferred under Section

61 or Section 62 or such an appeal is not time barred

under any provision of law for the time being in force; or

(iii) where a legal proceeding has been initiated in any

court against the decision of the adjudicating authority in

respect of a resolution plan;

(c) provides for the management of the affairs of the

corporate debtor after approval of the resolution plan;

(d) the implementation and supervision of the

resolution plan;

(e) does not contravene any of the provisions of the

law for the time being in force;

(f) conforms to such other requirements as may be

specified by the Board.

Explanation.—For the purposes of clause (e), if any

approval of shareholders is required under the Companies

Act, 2013 (18 of 2013) or any other law for the time being

in force for the implementation of actions under the

resolution plan, such approval shall be deemed to have

been given and it shall not be a contravention of that Act

or law.

(3) The resolution professional shall present to the

committee of creditors for its approval such resolution

plans which confirm the conditions referred to in sub-

section (2).

(4) The committee of creditors may approve a

resolution plan by a vote of not less than sixty-six per cent

of voting share of the financial creditors, after considering

its feasibility and viability the manner of distribution

proposed, which may take into account the order of priority

amongst creditors as laid down in sub-section (1) of

Section 53, including the priority and value of the security

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interest of a secured creditor, and such other requirements

as may be specified by the Board:

Provided that the committee of creditors shall not

approve a resolution plan, submitted before the

commencement of the Insolvency and Bankruptcy Code

(Amendment) Ordinance, 2017 (Ord. 7 of 2017), where

the resolution applicant is ineligible under Section 29-A

and may require the resolution professional to invite a

fresh resolution plan where no other resolution plan is

available with it:

Provided further that where the resolution applicant

referred to in the first proviso is ineligible under clause (c)

of Section 29-A, the resolution applicant shall be allowed

by the committee of creditors such period, not exceeding

thirty days, to make payment of overdue amounts in

accordance with the proviso to clause (c) of Section 29-A:

Provided also that nothing in the second proviso shall

be construed as extension of period for the purposes of

the proviso to sub-section (3) of Section 12, and the

corporate insolvency resolution process shall be

completed within the period specified in that sub-section.

Provided also that the eligibility criteria in Section 29-A

as amended by the Insolvency and Bankruptcy Code

(Amendment) Ordinance, 2018 (Ord. 6 of 2018) shall

apply to the resolution applicant who has not submitted

resolution plan as on the date of commencement of the

Insolvency and Bankruptcy Code (Amendment)

Ordinance, 2018.

(5) The resolution applicant may attend the meeting of

the committee of creditors in which the resolution plan of

the applicant is considered:

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Provided that the resolution applicant shall not have a

right to vote at the meeting of the committee of creditors

unless such resolution applicant is also a financial creditor.

(6) The resolution professional shall submit the

resolution plan as approved by the committee of creditors

to the adjudicating authority.

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, guara ntors 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.

(2) Where the adjudicating authority is satisfied that the

resolution plan does not conform to the requirements

referred to in sub-section (1), it may, by an order, reject

the resolution plan.

(3) After the order of approval under sub-section (1),—

(a) the moratorium order passed by the adjudicating

authority under Section 14 shall cease to have effect; and

(b) the resolution professional shall forward all records

relating to the conduct of the corporate insolvency

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resolution process and the resolution plan to the Board to

be recorded on its database.

(4) The resolution applicant shall, pursuant to the

resolution plan approved under sub-section (1), obtain the

necessary approval required under any law for the time

being in force within a period of one year from the date of

approval of the resolution plan by the adjudicating

authority under sub-section (1) or within such period as

provided for in such law, whichever is later:

Provided that where the resolution plan contains a

provision for combination, as referred to in Section 5 of the

Competition Act, 2002 (12 of 2003), the resolution

applicant shall obtain the approval of the Competition

Commission of India under that Act prior to the approval of

such resolution plan by the committee of creditors.‖

13. Section 30 (2) requires that, the Resolution plan, placed for the

approval of the Adjudicating Authority, has to set out the payments that would

be made to different classes of creditors and that such payments are in

accordance with the directions given by the Insolvency and Bankruptcy Board

of India. Section 31 states that once a resolution plan has been approved by

the Adjudicating Authority, the said plan would be binding on all creditors,

including the State and Central Government and their agencies. This would

mean that the liability of any creditor would be extinguished upon the payment

of the money set out in the resolution plan.

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14. This view is fortified by the following extract of the judgment of the

Hon‘ble Supreme Court, in Ghanashyam Mishra & Sons (P) Ltd. v.

Edelweiss Asset Reconstruction Co. Ltd.,

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.

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15. In State Tax Officer vs. Rainbow Papers Limited, the claim of

the tax authorities was rejected by the Resolution Professional and the said

dues were not included in the Resolution plan. The Hon‘ble Supreme Court

had found fault with the non inclusion of the dues of the State, in the resolution

plan. The Hon‘ble Supreme Court held that such non inclusion was violative

of section 30(2) and consequently, the adjudicating authority could not have

approved the resolution plan. The relevant extracts are:

49. Section 31(1) IBC which empowers the

adjudicating authority to approve a resolution plan uses

the expression ―it shall by order approve the resolution

plan which shall be binding…‖ subject to the condition that

the resolution plan meets the requirements of sub-section

(2) of Section 30. If a resolution plan meets the

requirements, the adjudicating authority is mandatorily

required to approve the resolution plan. On the other

hand, sub-section (2) of Section 31, which enables the

adjudicating authority to reject a resolution plan which

does not conform to the requirements referred to in sub-

section (1) of Section 31, uses the expression ―may‖.

51. If the established facts and circumstances require

discretion to be exercised in a particular way, discretion

has to be exercised in that way. If a resolution plan is ex

facie not in conformity with law and/or the provisions of

IBC and/or the Rules and Regulations framed thereunder,

the Resolution would have to be rejected. It is also a well-

settled principle of interpretation that the expression

―may‖, if circumstances so demand can be construed as

―shall‖.

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52. If the resolution plan ignores the statutory demands

payable to any State Government or a legal authority,

altogether, the adjudicating authority is bound to reject the

resolution plan.

53. In other words, if a company is unable to pay its

debts, which should include its statutory dues to the

Government and/or other authorities and there is no plan

which contemplates dissipation of those debts in a phased

manner, uniform proportional reduction, the company

would necessarily have to be liquidated and its assets sold

and distributed in the manner stipulated in Section 53 IBC.

54. In our considered view, the Committee of Creditors,

which might include financial institutions and other

financial creditors, cannot secure their own dues at the

cost of statutory dues owed to any Government or

Governmental Authority or for that matter, any other dues.

16. In the case before us, the facts are entirely different. The dues of

the State were set out in the resolution plan and proportional payment was

fixed and paid. There is no challenge to the approval of the resolution plan, by

the Adjudicating Authority. Accordingly, the claims of the State stand

extinguished. Once such claims have been extinguished, the State cannot

seek to recover such extinguished claims, by initiating or continuing coercive

process, against the property of the Company, which was subjected to the

Insolvency Resolution Process. The Petitioner is one step removed as he is a

purchaser of the property of such a company.

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17. In view of the above, this application for review is allowed.

Consequently, in view of the above discussion, the writ petition is allowed, as

prayed for.

Pending applications stand closed.

_________________________

R. RAGHUNANDAN RAO, J .

_________________________

T. MALLIKHARJUNA RAO, J

Js.

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HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO

&

HON’BLE SRI JUSTICE T. MALLIKHARJUNA RAO

Rev.I.A.No.1 of 2023

In/and

W.P.No.22983 of 2022

(per Hon‘ble Sri Justice R.Raghunandan Rao)

9

th

May, 2025

Js.