Full Text
HIGH COURT OF DELHI
Date of Decision: 11th December, 2025
PATANJALI FOODS LIMITED .....Petitioner
Through: Mr. Anurag Bhatt, Mr. Lokesh Pathak, Mr. Ashwarya Sharma, Mr. Vaibhav Vijayvargiya, Mr. Adarsh Gupta, Mr. Kinjal Srivastava & Mr. Yash Shahi, Advs.
ORS. .....Respondent
Through: Mr. Piyush Beriwal, & Ms. Ruchita Srivastava, Advs.
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner – Patanjali Foods Limited under Article 226 of the Constitution of India challenging the orderin original bearing no. 52/AC/NARELA/DN/2024 dated 21st January, 2025, along with the corrigendum dated 3rd February, 2025 (hereinafter referred to as the "impugned order") passed for the financial year 2017-2018.
3. The background of the present case is that a company by the name of Ruchi Soya Industries Ltd. was undergoing insolvency proceedings before the National Company Law Tribunal (NCLT), Mumbai Bench. In the said proceedings, a consortium led by Patanjali Ayurved Limited (`Patanjali Consortium’) had submitted a resolution plan in respect of the said company. Various other resolution plans were also submitted and the NCLT, Mumbai Bench, vide order dated 24th July, 2019, passed the following order:
4. Thereafter, vide order dated 4th September, 2019, the NCLT, Mumbai Bench, reiterated the above stated order dated 24th July, 2019 and directed the new management to take over the company. Thus, the NCLT had approved the resolution plan submitted by the Patanjali Consortium and accordingly, the business of the Company was restructured in accordance with and under the directions of the NCLT. Thereafter, Patanjali Consortium paid the entire sum, as approved therein and took over the Company as a 'going concern' and on a 'clean slate basis’.
5. Pursuant to the said approval of the resolution plan the name of the said company under liquidation, Ruchi Soya Industries Ltd. was changed to Patanjali Foods Limited, which is the Petitioner before this Court.
6. Certain audits were commenced against the company Ruchi Soya Industries Ltd. which culminated into various audit objections being filed. A show cause notice dated 18th June, 2024 was issued and an order-in-original dated 6th January, 2025 was passed by the Respondent no. 1- Assistant Commissioner CGST Narela Division. In terms of the said order, various demands have been raised for the period 2017-18 to 2021-22.
7. The ground raised by the Petitioner in the present petition is that in so far as demands in respect of the years which are prior to the approval of the resolution plan are concerned, the same culminated into the resolution plan and no demand could have been raised after the resolution plan was approved as the take over was on a `clean slate’ basis.
8. Mr. Anurag Bhatt, ld. Counsel for the Petitioner further relies upon the decision in “Ghanashyam Mishra & Sons (P) Ltd. Vs. Edelweiss Asset Reconstruction Co. Ltd. [(2021) 9 SCC 657]” by the Supreme Court which states as under: “102.[1] That once a resolution plan is duly approved by the adjudicating authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the adjudicating authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan.
102.2. The 2019 Amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which the I&B Code has come into effect.
102.3. Consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued.”
9. He also relies upon a similar order passed by the High Court of Bombay in W.P. No. 2171 of 2025 titled M/s Patanjali Foods Ltd., Nagpur v. The Joint Commissioner, CGST & Central Excise, Nagpur-I & Ors. which is another case of the Petitioner itself filed under similar circumstances.
10. On 9th May, 2025, notice was issued in this matter and Mr. Piyush Beriwal, ld. Counsel was requested to seek instructions and file an affidavit.
11. An application was, thereafter, moved to contend that the date of the approval of the Resolution Plan should be considered to be 4th September, 2019 and not 24th July, 2019. On this issue, the Court has heard the submissions today.
12. Mr. Bhatt, ld. Counsel appearing for the Petitioner has submitted that an order of the Andhra Pradesh High Court dated 11th September, 2024 in W.P. No. 28529 of 2023 titled Patanjali Foods Limited v. The Assistant Commissioner St. Fac & Ors. is clear to the effect that the date of the approval of the Resolution Plan ought to be taken as 04th September, 2019 and not as 24th July, 2019. Reliance is also placed upon Section 31 of the Insolvency and Bankruptcy Code, 2016, to argue that the final Resolution Plan was approved only on 04th September, 2019, as one of the key aspects of source of funds, which had to be explained was directed to be explained vide order dated 24th July, 2019. Hence, the Resolution Plan had not been finalized on the said date.
13. This position is contested by Mr. Beriwal, ld. Counsel, who submits that the order dated 24th July, 2019 was passed under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. In fact, he relies upon the IBBI’s website, wherein, the date of the resolution plan is taken as 24th July, 2019. The website extract is relied upon in this regard.
14. In addition, it is also submitted that the orders of NCLAT, Mumbai, where certain creditors had challenged the Resolution Plan are also relevant. In order dated 18th November, 2019, the Resolution Plan was taken to have been approved as on 24th July, 2019. Though, in the subsequent order, it is taken as 4th September, 2019.
15. The Court has heard the submissions made by the parties. The only question that arises is whether the date of Resolution Plan is to be taken as 24th July, 2019 or 04th September, 2019 and whether any demands could have been raised for the period prior to the approval of the resolution plan.
16. In terms of Section 31(1) of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority has to record its satisfaction of the approval of the Resolution Plan. The said section reads as under:
17. a perusal of the order dated 24th July, 2019 shows that while the Resolution Plan has been approved in terms of paragraph 93 and 94, there are certain outstanding issues that have been kept pending for consideration in the said order. Relevant paragraphs of the order dated 24th July, 2019 are extracted below: “93. Given the above observations, we approve the resolution plan with modifications, as mentioned above, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors, Resolution Applicant and other stakeholders involved in the resolution plan.
94. The resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the IBBI to be recorded on its database.
95. Upon perusal of the CA certificates issued in favour of the consortium members, it is noted that in the case of the Patanjali Ayurved Limited (PAL), the Auditor has certified that PAL is in the capacity to spare a sum of ₹75 crore for investment in acquisition of business of Ruchi Soya Industries Limited on the basis of assessment of funds/liquid assets available in the Books of Accounts of PAL as certified vide certificate dated 08.04.2019 and ₹65 crore in the case of Divya Pharmacy as certified vide CA certificate dated 10.04.2019. As per the balance confirmation as on 10.04.2019, Patanjali Parivahan Private Limited has a sum of ₹2.26 crore in its 7 Bank accounts & in the case of Patanjali Gramudyog Nyas as per the Bank statement it has credit balance of ₹2 crore. Thus, the aggregate amount available for investment including some other individual accounts is about ₹145 crore as against the proposed ₹600 crore provided in the Resolution Plan. Even during the hearings, the Bench had sought exact/detailed source of funds for the resolution plan, inspite of the same, the information submitted is short of source of funds & there is a wide gap between the source of funds mentioned in the Plan and the actual available funds as per the records submitted. Therefore, we direct the Resolution Professional/Resolution Applicant to bridge the gap in information and provide the exact source of funds for the stated ₹600 crores that forms a part of the Resolution Plan before the next date of listing.
96. Further, the Resolution Professional has not mentioned the actual CIRP cost. The Resolution Professional is directed to submit a detailed breakup of the CIRP Cost before the next date of listing. The Resolution Professional or the Resolution Applicant to submit the details of remuneration to be paid to Mr. Shailendra Ajmera for discharging duties as monitoring agent.
97. List on 1.8.2019 for filing additional affidavit of Resolution applicant regarding acceptance of the modifications in the Resolution Plan and submitting the other informations as per directions above.
98. The Resolution Plan is at this moment approved, subject to the submission of additional affidavit for accepetence of the modifications in the Resolution Plan and other informations as per directions above, under section 31(1) of IBC with observations above. The MA 1721/2019 is accordingly allowed and disposed of.”
18. Thereafter, however, on 04th September, 2019, the final approval of the Resolution Plan took place. The said relevant order is set out below: “It is also to be clarified that every eventuality has been discussed in the approved resolution plan and in implementation of the resolution plan circumstances may arise for which clarification can be sought by the Monitoring agency for effective implementation of the plan. In the circumstances, we hereby approve the resolution plan. Designated Registrar is directed to immediately communicate this order to the Resolution Professional, Resolution Applicant, Corporate Debtor and IBBI for information.”
19. The Division Bench of the Andhra Pradesh High Court, in W.P. NO. 28529 of 2023 has already taken a view in this regard, where it records as under:
20. Further, in W.P. No. 2171 of 2025, vide order dated 23rd April, 2025, the Bombay High Court held as under:
21. Since, in the case of the Petitioner itself, the Coordinate Benches of different High Courts have already taken a view and have also examined the language of the two orders passed by the NCLT, this Court is of the opinion that the date of final approval ought to be taken as 04th September, 2019 after which the new management claimed to have come into control of the company.
22. In view thereof, the impugned order, which raises demands for a period prior to 04th September, 2019, would be required to be set aside.
23. The Respondent is free to issue a fresh Show Cause Notice, for the period after 04th September, 2019, which shall be then decided in accordance with law.
24. In view of the fact that the pendency of this writ petition may have affected the limitation for issuance of Show Cause Notice, the period during which the writ was kept pending, shall be excluded for the purpose of calculating limitation, if the Show Cause Notice is to be issued afresh.
25. If the Show Cause Notice is issued by 15th February, 2026, it shall be deemed to be within the period of limitation.
26. The petition is disposed of in these terms. All pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE SHAIL JAIN JUDGE DECEMBER 11, 2025/pd/ss