Orissa High Court
M/S. Jsw Energy (Utkal) Limited vs State Of Odisha on 20 June, 2025
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 24-Jun-2025 16:53:36
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.2551 of 2025
(In the matter of an application under Articles 226 and 227of the
Constitution of India, 1950).
M/s. JSW Energy (Utkal) Limited, .... Petitioner(s)
Bhubaneswar
-versus-
State of Odisha, Revenue and .... Opposite Party (s)
Disaster Management Department
&Ors.
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr. Ashok Kumar Parija, Sr. Adv.
Along with
Mr. V. Mohapatra, Adv.
For Opposite Party (s) : Ms. Jyotsnamayee Sahoo, ASC
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-15.05.2025
DATE OF JUDGMENT:-20.06.2025
Dr. S.K. Panigrahi, J.
1. The Petitioner, in the present Writ Petition, is challenging the actions
of the Tahasildar, Lakhanpur, District-Jharsuguda, Odisha,
specifically the issuance of a Certificate of Public Demand dated
12.02.2020, PR No.1 dated 25.01.2023, Letter No. 734 dated 17.02.2023,
Location: ORISSA HIGH COURT, CUTTACK
Letter No. XXI-11/2023 No. 5855 dated 31.10.2023, PR No. 7 dated
17.11.2023; and Letter No. 4925 dated 11.09.2024.
2. The Petitioner has already deposited the demanded dues under
protest and now seeks a refund of the amount deposited.
I. FACTUAL MATRIX OF THE CASE:
3. The brief facts of the case are as follows:
(i) The Petitioner, formerly Ind-Bharath Energy (Utkal) Limited and now
JSW Energy (Utkal) Limited, is a company incorporated under the
Companies Act, 2013, with its registered office at Sahajbahal,
Jharsuguda, Odisha.
(ii) In 2018, Bank of Baroda, as a financial creditor, filed an application
under Section 7 of the Insolvency and Bankruptcy Code, 2016, against
the Petitioner, which was registered as CP(IB) No. 276/7/HDB/2018
before the National Company Law Tribunal, Hyderabad
Bench.Thereafter, on 29.08.2018, the NCLT admitted CP(IB) No.
276/7/HDB/2018 and initiated the Corporate Insolvency Resolution
Process against the Petitioner.
(iii) A moratorium was imposed under the Insolvency and Bankruptcy
Code, 2016, and an Interim Resolution Professional was appointed to
take over the management and affairs of the Petitioner. The NCLT
also directed that a public announcement be made under Section
13(1)(b) of the Insolvency and Bankruptcy Code, 2016.
(iv) Pursuant to the said order, on 30.08.2018, the Interim Resolution
Professional issued a public announcement in Form A under Rule 6 of
the IBBI (Insolvency Resolution Process for Corporate Persons)
Location: ORISSA HIGH COURT, CUTTACK
Regulations, 2016, inviting all creditors of the Petitioner to submit
their claims by 12.09.2018. No claim was received from the Opposite
Parties either by the said date or at any time thereafter.
(v) The Interim Resolution Professional collated the claims received and
was subsequently replaced by a Resolution Professional appointed by
the Committee of Creditors. The Resolution Professional thereafter
invited Expressions of Interestfrom eligible Resolution Applicants.
(vi) During the course of the Corporate Insolvency Resolution Process,
M/s JSW Energy Limited submitted its Resolution Plan dated
03.10.2019. The Resolution Plan was approved by the Committee of
Creditors with 82.70% voting share in its 15thmeeting held on
09.10.2019.
(vii) Notwithstanding the above, on 12.02.2020, the State Government
initiated proceedings under the Orissa Public Demands Recovery Act,
1962 in OPDR Case No. 30/2020 against the Petitioner for recovery of
arrear rent and cess for the financial years 2015-16 to 2018-19.
(viii) Thereafter, on 31.08.2020, the Resolution Professional submitted the
final list of creditors of the Petitioner before the NCLT in CP(IB) No.
276/7/HDB/2018. Notably, the claims of the Opposite Parties were not
included in the said list.
(ix) Subsequently, the NCLT approved the Resolution Plan submitted by
the Resolution Applicant vide order dated 25.07.2022 in CP(IB) No.
276/7/HDB/2018.
(x) Thereafter, on 28.12.2022, the new Board of Directors of the Petitioner
was constituted by the successful Resolution Applicant, M/s JSW
Location: ORISSA HIGH COURT, CUTTACK
Energy Limited. Accordingly, 28.12.2022 is treated as the
Implementation date under the Resolution Plan.
(xi) On 31.12.2022, the Resolution Professional informed M/s JSW Energy
Limited that the total resolution amount of ₹10,43,07,24,984.62 had
been distributed among the final list of creditors, out of which
₹9,10,22,729.94 was paid towards Operational Creditors, including
Government dues.
(xii) Despite the above, the Tahasildar, Lakhanpur, vide PR No. 1 dated
25.01.2023, issued a demand notice to the Petitioner in OPDR Case
No. 30/2020 for ₹9,81,682/- towards arrear rent and cess for the
financial years 2015-16 to 2018-19.
(xiii) Further, on 27.01.2023, the Tahasildar, Lakhanpur, vide Letter No. 430,
issued a demand notice to the Petitioner for ₹12,14,961/- towards
arrear rent and cess for FY 2019-20 to 2021-22, and current rent and
cess for FY 2022-23, in respect of land acquired in the villages of
Sahajbahal, Kumbharbandh, and Barpali.
(xiv) Subsequently, vide Letter No. 734 dated 17.02.2023, the Tahasildar,
Lakhanpur informed the Petitioner that, upon verification, the
impugned demand had been revised to: (a) ₹12,14,986/- towards
arrear and current rent and cess for FY 2019-20 to 2022-23, and (b)
₹9,81,682/- towards the demand raised in OPDR Case No. 30/2020.
(xv) On 13.03.2023, the Petitioner, vide Letter No. IBEUL/2022-23/004,
informed the Tahasildar, Lakhanpur that it had undergone CIRP
under the IBC, 2016, and had been acquired by the Resolution
Applicant on 28.12.2022 pursuant to the Resolution Plan approved by
Location: ORISSA HIGH COURT, CUTTACK
the NCLT. The Petitioner further clarified that all claims of
stakeholders and creditors, including those of the Opposite Parties,
for the period prior to the Implementation Date stood extinguished, as
they were not included in the approved Resolution Plan. In light of
this, the Petitioner requested Opposite Parties to withdraw the
demand notice dated 17.02.2023 and issue a revised demand, if any,
restricted to dues arising after 28.12.2022.
(xvi) Thereafter, on 31.10.2023, the Tahasildar, Lakhanpur, vide Letter No.
XXI-11/2023 No. 5855, directed the Petitioner to deposit: (a) arrear rent
and cess of ₹10,50,218/- for FY 2019-20 to 2021-22; and (b) arrear and
current rent and cess of ₹5,45,703/- for FY 2022-23 and FY 2023-24, in
respect of land acquired in the villages of Sahajbahal, Kumbharbandh,
and Barpali, within a period of seven days.
(xvii) Subsequently, on 17.11.2023, Opposite Party No. 3, vide PR No. 7,
once again issued a demand notice to the Petitioner in OPDR Case No.
30/2020 for payment of ₹10,63,488/-.
(xviii) On 05.03.2024, the Petitioner, vide Letter No. IBEUL/23-24/273,
informed the Tahasildar, Lakhanpur that it had already paid
₹5,45,703/- towards rent and cess for FY 2022-23 and FY 2023-24 via
Cheque/DD No. 733821 dated 10.11.2023, it was further stated that the
demands of (a) ₹10,63,488/- under OPDR Case No. 30/2020 and (b)
₹10,50,218/- towards arrear rent and cess for FY 2019-20 to 2021-22
were not maintainable and stood extinguished as they were not part
of the Resolution Plan approved by the NCLT. Nevertheless, the
Petitioner, under protest, made both payments.
Location: ORISSA HIGH COURT, CUTTACK
(xix) Subsequently, on 11.09.2024, the Tahasildar, Lakhanpur, vide Letter
No. 4925, directed the Petitioner to deposit ₹22,70,568/- towards short
realisation of conversion fees, as pointed out by the Office of the
Accountant General, Odisha in Para 4 of Inspection Report No. 42 of
2011-12.
(xx) In the aforesaid circumstances and despite repeated representations,
including a formal request dated 03.01.2025, the State Authorities
have failed to take any action on the Petitioner's claim for refund of
amounts deposited under protest. In view of the continued inaction
and absence of any efficacious remedy, the Petitioner has been
constrained to seek redress before this Court by invoking its writ
jurisdiction under Articles 226 and 227 of the Constitution of India.
(xxi) On 20.01.2025, the Petitioner, vide Letter No. IBEUL/24-25/, informed
the Tahasildar, Lakhanpur that the demand notice dated 11.09.2024
was not legally sustainable and stood extinguished, as it was not
provided for in the Resolution Plan approved by the NCLT.
Nevertheless, the Petitioner, under protest, deposited a sum of
₹22,70,568/- towards the alleged short realisation of conversion fees.
II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
4. Learned counsel for the Petitioners earnestly made the following
submissions in support of his contentions:
(i) The Petitioner contended that all liabilities arising prior to the
Implementation Date under the approved Resolution Plan dated
28.12.2022 stood extinguished by operation of law. The Plan, being
binding on all stakeholders including the Opposite Parties under
Location: ORISSA HIGH COURT, CUTTACK
Section 31(1) of the Insolvency and Bankruptcy Code, 2016, renders
the impugned demands unsustainable.
(ii) The petitioner submitted that a conjoint reading of Clauses 1.6, 1.14
and 14.5 of Part B, Financial Proposal of the Resolution Plan, along
with Section 238 of the Insolvency and Bankruptcy Code, 2016, makes
it clear that all claims, dues or taxes, whether claimed or unclaimed,
for any period prior to the Insolvency Commencement Date of 29
August 2018 and up to the Implementation Date of 28 December 2022,
stood permanently extinguished upon approval of the Resolution
Plan by the NCLT on 25 July 2022.
(iii) The petitioner submitted that the Insolvency and Bankruptcy Code,
2016, provides a complete and self-contained mechanism for
submission and adjudication of claims during the Corporate
Insolvency Resolution Process. Claims not submitted to the
Resolution Professional are deemed extinguished, ensuring that the
Resolution Applicant acquires the corporate debtor on a clean slate.
(iv) The Resolution Plan, having been vetted by the Committee of
Creditors and found compliant with the Insolvency and Bankruptcy
Code, 2016, by the NCLT, became binding in rem on all creditors
including statutory authorities. As certified by the Resolution
Professional on 31.12.2022, the entire Total Resolution Amount was
disbursed. No residual liability survives.
(v) The Petitioner further submitted that Opposite Party No. 3 lacks
jurisdiction to initiate proceedings under the Orissa Public Demands
Recovery Act, 1962 or the Orissa Cess Act, 1962 in derogation of the
Location: ORISSA HIGH COURT, CUTTACK
Insolvency and Bankruptcy Code, 2016. The Insolvency and
Bankruptcy Code, 2016, by virtue of Section 238, has overriding effect
over any inconsistent laws. Consequently, the impugned recovery
actions are without jurisdiction.
(vi) The petitioner contended that it cannot be held liable to pay any
amount beyond the Total Resolution Amount. Clause 1.1 of Part B of
the Resolution Plan expressly stipulates that even if redistribution is
mandated, the total amount remains capped.
(vii) The Petitioner contended that the Opposite Parties never objected to
or challenged the Resolution Plan before the NCLT, nor did they
prefer any appeal. Having acquiesced, they are now estopped from
raising any inconsistent claims.
(viii) The Petitioner submitted that the demand notices were issued without
affording any opportunity of hearing or issuance of show-cause
notice, in violation of principles of natural justice. Additionally, the
demands are barred by limitation and vitiated by non-application of
mind, thus attracting the protection of Article 14 of the Constitution.
(ix) The petitioner contended that the Orissa Public Demands Recovery
Act, can only be invoked to recover valid, subsisting dues. Once a
claim stands extinguished under the Insolvency and Bankruptcy
Code, 2016, any proceedings under the OPDR Act are rendered
incompetent.
(x) The initiation of OPDR Case No. 30/2020 is also violative of the
moratorium imposed under Sections 13 and 14 of the Insolvency and
Location: ORISSA HIGH COURT, CUTTACK
Bankruptcy Code, 2016 from 29.08.2018, which expressly prohibits
institution or continuation of recovery proceedings.
(xi) Lastly, the demand dated 11.09.2024 is founded solely on an audit
objection of the Accountant General without any independent
assessment or application of mind, amounting to abdication of
statutory responsibility.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:
5. The Learned Counsel for the Opposite Parties earnestly made the
following submissions in support of his contentions:
(i) The demand notices were issued lawfully under the Orissa Land
Reforms Act, 1960 and the Odisha Public Demands Recovery Act,
1962. The Officer, being the Certificate Officer and Revenue Authority,
is legally empowered to recover statutory government dues through
certificate proceedings.
(ii) The recovery of these dues is in accordance with statutory obligations
imposed on all tenants, including the Petitioner, who is required to
remit annual rent and cess. Failure to do so warrants action under the
Odisha Public Demands Recovery Act, 1962.
(iii) A certificate case under the Odisha Public Demands Recovery Act,
1962was initiated against the Petitioner for recovery of rent and cess
for FYs 2015-16 and 2018-19, whereas no such action was taken for
FYs 2016-17 and 2017-18 since the dues for those years were paid.
This evidences the Petitioner's awareness of its statutory liability.
(iv) The Petitioner is now attempting to evade its obligations by invoking
the insolvency process and claiming that the dues were extinguished
Location: ORISSA HIGH COURT, CUTTACK
due to the authorities' failure to submit claims by 12.09.2018 under
Form-A. This contention is misconceived, as statutory government
dues cannot be extinguished by procedural lapses or technicalities in
the insolvency process.
(v) The State, as absolute owner of the land, retains the right to recover
unpaid statutory dues, and such claims, being statutory in nature, are
not extinguished by the CIRP or any provisions of the IBC. The
moratorium under Sections 13 and 14 of the IBC does not invalidate or
restrict the State's authority to recover dues under separate legal
frameworks such as the Odisha Public Demands Recovery Act, 1962.
(vi) The amount of ₹22,70,568/- was demanded from the Petitioner
towards short realization of conversion fees as per the AG Audit
Report. The said amount has already been realized, and the
Petitioner's compliance with this demand constitutes acquiescence
and acknowledgment of its legality. There is no basis for refund.
(vii) The demand and recovery actions undertaken are valid, legal, and in
strict conformity with applicable laws. The Petitioner was under a
continuing obligation to pay government dues, and the authorities
acted well within their jurisdiction under the Odisha Public Demands
Recovery Act, 1962.
IV. COURT'S REASONING AND ANALYSIS:
6. Heard learned counsel for the parties and perused the materials on
record
7. The central issue that arises for consideration in the present writ
petition is whether the Opposite Parties were legally entitled to raise
Location: ORISSA HIGH COURT, CUTTACK
demands for arrear rent, cess, and conversion fees pertaining to
periods prior to the implementation date of the Resolution Plan,
particularly when such claims were admittedly not submitted before
the Resolution Professional during the Corporate Insolvency
Resolution Process, nor included in the Resolution Plan duly
approved under Section 31(1) of the Insolvency and Bankruptcy Code,
2016.
8. In order to resolve the said controversy, it is necessary to examine the
statutory framework under the Insolvency and Bankruptcy Code,
2016, as interpreted and clarified by authoritative judicial
pronouncements.
9. Section 31(1) of the Insolvency and Bankruptcy Code, 2016 reads as
follows:
"31. (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 approve3 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."
Location: ORISSA HIGH COURT, CUTTACK
10. The object and intent behind Section 31(1) is to secure finality in the
resolution process. Once a resolution plan is approved by the
Adjudicating Authority, it becomes binding on all stakeholders,
including the Central and State Governments and statutory
authorities. The rationale is to ensure that the successful resolution
applicant is not burdened with claims that were not disclosed or
settled during CIRP, thereby enabling a "clean slate" takeover and
revival of the corporate debtor.
11. One of the foundational principles of the Insolvency and Bankruptcy
Code, 2016, is precisely this "clean slate principle." Permitting
statutory authorities to raise fresh demands post-implementation
would not only undermine the sanctity of the CIRP but also render
the revival process illusory by exposing the resolution applicant to
unforeseen liabilities.
12. The legal position has been authoritatively settled by the Supreme
Court in Ghanashyam Mishra and Sons (P) Ltd. v. Edelweiss Asset
Reconstruction Co. Ltd.1, where it was held:
"95 ...(i) 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
(2021) 9 SCC 657.
Location: ORISSA HIGH COURT, CUTTACK
or continue any proceedings in respect to a claim, which is
not part of the resolution plan;
(ii) 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 I&B Code has come into
effect;
(iii) 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."
13. Similarly, in Committee of Creditors of Essar Steel India Ltd. v.
Satish Kumar Gupta,2the Supreme Court held that:
"66. 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..."
14. Applying the above principles to the facts of the present case, it is
evident that the Petitioner, originally Ind-Bharath Energy (Utkal)
Limited and now JSW Energy (Utkal) Limited, underwent CIRP
commencing from 29.08.2018. The Resolution Plan submitted by M/s
JSW Energy Limited was approved by the NCLT on 25.07.2022 and
implemented with effect from 28.12.2022.
15. The Resolution Professional issued a public notice on 30.08.2018
inviting claims. The final list of creditors, as submitted before the
(2020) 8 SCC 531.
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NCLT, did not include any claim from the Opposite Parties. Thus, all
claims pertaining to the period prior to the Implementation Date i.e.,
28.12.2022, which were not part of the approved Resolution Plan,
stood extinguished in law.
16. Despite this, the Tahasildar, Lakhanpur, District-Jharsuguda, issued
several demand notices, including the Certificate of Public Demand
dated 12.02.2020, PR No. 1 dated 25.01.2023, Letter No. 734 dated
17.02.2023, Letter No. XXI-11/2023 No. 5855 dated 31.10.2023, PR No. 7
dated 17.11.2023, and Letter No. 4925 dated 11.09.2024.
17. These demands pertain to periods well before the Implementation
Date and were never submitted during the CIRP. In view of the
statutory framework and the settled legal position under the
Insolvency and Bankruptcy Code, 2016, such post-implementation
demands lack legal sanctity and are unenforceable in law.
18. The contention of the Opposite Parties that statutory dues stand on a
higher footing and survive beyond CIRP is directly contrary to the
settled legal position.
19. The further argument that audit-based demands are permissible also
fails the legal test. The mere existence of an audit objection does not
amount to adjudication of liability and cannot override the statutory
protections afforded under the Insolvency and Bankruptcy Code,
2016.
V. CONCLUSION:
20. In view of the above discussion, this Court has no hesitation in
holding that the impugned demand notices issued by the Opposite
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Parties are in clear breach of Section 31 of the IBC and are liable to be
quashed.
21. The Opposite Parties are directed to refund the amounts deposited by
the Petitioner under protest within a period of four weeks from the
date of this judgment.
22. Accordingly, the Writ Petition is allowed.
23. Interim order, if any, passed earlier stands vacated.
(Dr.S.K. Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 20th June, 2025
