# In the matter of SEL Manufacturing Company Limited IA No.598 & 599-2021 in CP (IB) No.114-Chd-Pb-2017

> NCLT judgment dated 2022-06-03. Citation: TCN-2022-NCLT-02418. The case involves two Interlocutory Applications (IAs), 598/2021 and 599/2021, filed in…

- **Court:** NCLT
- **Order date:** 3 Jun 2022
- **Citation:** TCN-2022-NCLT-02418
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sel-manufacturing-company-limited-ia-no598-599-2021-in-cp-ib-no114-chd-pb-2017-0fe17009

## Summary

### Background

The case involves two Interlocutory Applications (IAs), 598/2021 and 599/2021, filed in connection with a Corporate Insolvency Resolution Process (CIRP) initiated against SEL Manufacturing Company Limited. IA 598/2021 concerns a demand notice issued by Punjab Small Industries & Export Corporation Limited (PSIEC) for enhanced land compensation related to a plot allotted to SEL Manufacturing. PSIEC claimed that the enhanced compensation was not paid and that the ownership of the plot remained with them. SEL Manufacturing argued that the demand was unsustainable after the approval of the resolution plan. IA 599/2021 concerns attachment and detention orders issued by the Commissionerate of Central Excise against SEL Manufacturing for unpaid interest on input credit

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## Facts

1. State Bank of India initiated CIRP against SEL Manufacturing Company Limited.
2. PSIEC issued a demand notice to SEL Manufacturing for enhanced land compensation related to a plot allotted to them.
3. SEL Manufacturing argued that the demand was unsustainable after the approval of the resolution plan under Sections 30 and 31 of the IBC.
4. PSIEC claimed that the enhanced compensation was not paid and that the ownership of the plot remained with them, citing clauses in the allotment letter and lease deed.
5. SEL Manufacturing had filed a civil suit challenging the demand for enhanced land compensation, which was pending adjudication.
6. The Commissionerate of Central Excise issued attachment and detention orders against SEL Manufacturing for unpaid interest on input

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## Issues and analysis

### Issue 1: Whether the demand for enhanced land compensation by PSIEC is a 'statutory due' within the meaning …

**Ratio:** Section 31 of the IBC states that a resolution plan approved by the Adjudicating

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**Reasoning:** The court reasoned that the enhanced land compensation was not a 'statutory due' but a

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**Interpretation:** The court interpreted Section 31 narrowly, distinguishing between statutory

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**Application:** The court applied this reasoning to the facts by concluding that the demand

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** State Bank of…
- **Respondents:** SEL Manufacturing…

## Timeline

- **1995-12-01 — Allotment Let…**: Date of the allotment letter containing…
- **2001-01-01 — Challenge to compensatio…**: Enhanced amount of compensation was challenged before the Hon'ble High Court of Punjab…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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