The Delhi High Court has ruled that Customs Department’s failure to file claim during CIRP cannot be revived post-resolution, reinforcing the binding effect of Section 31(1) of the IBC on governmental authorities. The Court clarified that once a Resolution Plan is approved by the NCLT under Section 31(1) of the IBC, all claims not forming part of the plan stand extinguished, and no proceedings can be continued against the Corporate Debtor in respect of such extinguished claims.
The Court explained that the expression ‘claim’ under Section 3(6) of the IBC is wide enough to cover a right to payment arising from a pre-CIRP transaction, irrespective of whether the liability has been adjudicated or quantified by the statutory authority. Thus, the statutory mechanism of public announcement under the CIRP Regulations is sufficient to invite claims, and there is no obligation on the Corporate Debtor to individually notify every governmental authority of the commencement of CIRP.
The High Court asserted that 2019 Amendment to Section 31(1) of the IBC is declaratory and clarificatory in nature, and binds the Central Government, State Governments, and local authorities to whom statutory dues are owed, including the Customs Department. At the same time, Section 238 of the IBC gives the Code overriding effect over any inconsistent provision of any other law, including the Customs Act, 1962, and a creditor who fails to participate in the CIRP cannot acquire a superior position after approval of the Resolution Plan.
The Division Bench comprising Justice Anil Kshetarpal and Justice Shail Jain observed that the expression ‘claim’ under Section 3(6) of the Insolvency and Bankruptcy Code, 2016 is deliberately wide and covers a right to payment irrespective of whether it has been adjudicated, quantified, or crystallised into a demand. The underlying customs liability, having arisen from an import transaction dated 15 September 2023, was referable to the right to payment and not to the subsequent adjudication, and therefore squarely fell within the definition of “claim” under the IBC.
The Court further observed that the statutory mechanism of public announcement under Regulation 6 of the CIRP Regulations is the prescribed mode of inviting claims, and there is no requirement upon the Corporate Debtor to individually notify every statutory authority. Once the public announcement was issued on 6 June 2024 and the Customs Department did not submit its claim within the prescribed period, the responsibility for non-participation lay with the Department itself.
The Court placed strong reliance on the Supreme Court’s decision in Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [(2021) 9 SCC 657], observing that the 2019 Amendment to Section 31(1) of the IBC was declaratory and clarificatory in nature, and that upon approval of a Resolution Plan, all claims not forming part of the plan stand extinguished and no person can initiate or continue proceedings in respect thereof.
The Court also reiterated that while Customs Authorities may determine the quantum of duty during CIRP, they cannot enforce recovery contrary to the IBC, and once the Resolution Plan is approved, the position stands on a different footing under Section 31(1). Further, an isolated statement made by the petitioner’s authorised representative during personal hearing expressing willingness to pay could not confer jurisdiction upon the Authority to enforce a liability that had ceased to be enforceable by operation of the IBC.
Briefly, Jaiprakash Associates Limited imported Digital and Network Video Recorders on 15 September 2023 under Bill of Entry, declaring the goods under CTH 85219090 and availing Basic Customs Duty at 10 per cent under Serial No.499A of Notification No.50/2017-Customs. On 3 June 2024, the NCLT, Allahabad Bench admitted a Section 7 petition filed by ICICI Bank Limited against the petitioner and commenced the Corporate Insolvency Resolution Process, with 17 June 2024 being the last date for submission of claims. The Customs Department admittedly did not file any claim before the Resolution Professional within the prescribed period.
During the pendency of the CIRP, the Additional Commissioner of Customs issued a Pre-Notice Consultation letter on 24 July 2025 alleging a short levy of Rs. 5.89 lakhs on the ground that the goods were not eligible for the benefit of Serial No.499A, followed by Show Cause Notice dated 10 September 2025 proposing recovery of differential duty, interest under Section 28AA, and penalty under Sections 112(a)(ii) and 117 of the Customs Act, 1962.
The Committee of Creditors approved the Resolution Plan submitted by Adani Enterprises Limited on 31 October 2025, and the NCLT approved the same on 17 March 2026. The petitioner brought the NCLT approval and the Approved Resolution Plan to the notice of the Customs Authority on 18 May 2026, contending that unfiled pre-CIRP claims stood extinguished. Despite these submissions, the Additional Commissioner passed Order-in-Original dated 2 June 2026, confirming differential duty of Rs. 5.89 lakhs, interest under Section 28AA, and a penalty of Rs. 4 lakhs under Section 117 of the Customs Act.
