# in the matter of RMS Employees Welfare Trust Vs. Anil Goel CA(AT)(Insolvency) No.  699-2018

> NCLAT judgment dated 2019-05-30. Citation: TCN-2019-NCLAT-00521. This case involves an appeal against a part of an order by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 30 May 2019
- **Citation:** TCN-2019-NCLAT-00521
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rms-employees-welfare-trust-vs-anil-goel-ca-a1943ab8

## Summary

### Background

This case involves an appeal against a part of an order by the Adjudicating Authority (National Company Law Tribunal), Chandigarh Bench, Chandigarh, which approved a Resolution Plan submitted by the Appellant, RMS Employees Welfare Trust. The Adjudicating Authority had observed that no payment under the resolution plan was envisaged for Government dues and that the matter relating to the waiver of Government dues, including waiver of MAT liability under Section 115J of the Income Tax Act 1961, may be considered by the respective Government Department.

## Facts

The RMS Employees Welfare Trust filed an appeal against a portion of the Adjudicating Authority's order dated September 14, 2018. The Adjudicating Authority, while approving the Resolution Plan submitted by the Appellant, observed that the resolution plan did not envisage payment for Government dues and suggested that the waiver of such dues, including MAT liability, could be considered by the respective Government Department. The Appellant challenged this part of the order, arguing that debts payable to the Government are 'Operational Debt' and should be paid according to the I&B Code. The core issue revolves around whether statutory dues owed to the government fall under the definition of 'Operational Debt' and whether the Adjudicating Authority can direct the

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## Issues and analysis

### Issue 1: Whether debts payable to the Central Government, State Government, or other authorities are …

**Ratio:** The plain reading of sub-section (21) of Section 5 indicates that there is no ambiguity

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**Reasoning:** The court reasoned that 'Operational Debt' in normal course means a debt arising during

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**Interpretation:** The interpretation of Section 5(21) clarifies that debts arising under any law

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**Application:** The court applied this interpretation to the specific facts, holding that

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** RMS Employees…
- **Respondents:** Anil…

## Timeline

- **2018-09-14 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Chandigarh Bench, Chandigarh,…
- **2018-03-23 — COC Meet…**: Meeting of COC held where it was stated that no payment under the resolution plan is…

## 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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