Top Highlights

• In Paschim Vihar, a two-judge bench observed that as per the waterfall mechanism, the the dues payable to the government are placed much below those of secured creditors and even unsecured and operational creditors.
• The review bench however did not accept the petitioners' arguments based on Paschim Anchal Vidyut Vitran Nigam by saying that "any passing reference of the impugned judgment made by the Bench of the equal strength could not be a ground for review
• In State Tax Officer v. Rainbow, the Supreme Court held that the National Company Law Appellate Tribunal (NCLAT) had erred in law by rejecting an application by the Government of Gujarat for realising dues towards VAT from the corporate debtor.
• The Supreme Court held that if a resolution plan ignored statutory demands payable to any state government or legal authority, it would be bound to reject the resolution plan. The Court also highlighted that when a company is unable to pay its debts, including its statutory dues to the government or other authorities, liquidation and asset distribu...
• The Court had stated, "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."

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