# In the matter of Ferro Alloys Corporation Ltd. Vs. State of Odisha and Others Writ Petition (Civil) No.20286 of 2020

> HC judgment dated 2021-12-10. Citation: TCN-2021-HC-00006. Ferro Alloys Corporation Ltd. (FACOR) filed a writ petition under Article 226 of the Constitution…

- **Court:** HC
- **Order date:** 10 Dec 2021
- **Citation:** TCN-2021-HC-00006
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/ferro-alloys-corporation-ltd-vs-state-of-odisha-and-others-writ-petition-415199f2

## Summary

### Background

Ferro Alloys Corporation Ltd. (FACOR) filed a writ petition under Article 226 of the Constitution of India, seeking to set aside an order dated 8th September, 2020, passed by the Directorate of Mines, which rejected FACOR's representation for waiving demands raised against it. These demands were related to mining dues. FACOR sought a direction to the Opposite Parties to refund Rs. 12,02,28,202 paid under protest or adjust it against future dues. The demands arose before the approval of a Resolution Plan by the NCLT, Cuttack Bench, on 30th January, 2020. FACOR argued that the approved Resolution Plan extinguished prior claims.

## Facts

Ferro Alloys Corporation Ltd. (FACOR) is engaged in the business of processing, end use, and sale of minerals in Orissa. FACOR required a trading license from the Opposite Party No.3. FACOR applied for a trading license on 26th May, 2015, which was issued with validity until 24th August, 2020. FACOR underwent Corporate Insolvency Resolution Proceedings (CIRP) commencing on 6th July, 2017, approved by NCLT Kolkata. A Resolution Plan (RP) was submitted by Sterlite and Power Transmission Ltd. (SPTL) and approved by the Committee of Creditors (CoC) on 14th November, 2019, and by the NCLT Cuttack on 30th January, 2020. The Approved RP (ARP) extinguished claims against FACOR prior to the plan's effective date. FACOR was required to obtain a Mining Dues Clearance Certificate

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## Issues and analysis

### Issue 1: Whether the demands raised by the State authorities against FACOR are enforceable given the …

**Ratio:** Section 31(1) of the IBC states that once a resolution plan is approved by the Committee

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**Reasoning:** The court relied on the Supreme Court's decision in Ghanashyam Mishra and Sons Private

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**Interpretation:** The IBC aims to revive the Corporate Debtor and make it a running concern. The

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**Application:** The court applied the principle that the approved Resolution Plan is binding on

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## Parties

- **Judges:** S. Mural…; A.K. Moha…
- **Respondents:** Ferro Alloys…; State of…
- **Advocates:** A. Va…; Saswat Kumar…; +2 more

## Timeline

- **2015-05-26 — Application for Trading…**: FACOR applied for a trading…
- **2017-07-06 — Commencement…**: Corporate Insolvency Resolution…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(21) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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