Government authorities cannot claim old fees after completion of IBC process: Delhi HC in Jaiprakash case | Today’s news
The Delhi High Court on Wednesday said government authorities cannot stay out of a company’s insolvency process and later seek to recover old dues after a resolution plan is approved.
The ruling related to digital and network video recorders imported by Jaiprakash Associates in September 2023, before the company went into insolvency on 3 June 2024. The Customs Department, which did not declare its claim during the insolvency proceedings, claimed on 2 June 2026 that the company had paid a basic duty of 10% instead of 20% and demanded ₹589,000 in additional duty along with interest and penalty.
Jaiprakash Associates later challenged the order in the High Court.
The court said creditors, including government agencies such as tax authorities, must raise their claims during insolvency proceedings. They cannot wait for their charges to be decided and ask for payment after the process is over.
“The object of the IBC would be defeated if a creditor, including a statutory body, was allowed to stand outside the CIRP (corporate insolvency resolution process), await a determination of commitment before the CIRP and then seek recovery against the resolved corporate debtor,” the court said.
A public notice invited creditors to register their claims, with the latest date being June 17, 2024. However, the customs office did not register their claim during the insolvency proceedings. “The creditor is responsible for identifying and registering his claim,” the judgment states
The court said that the company was not required to separately notify each government department of the insolvency. Registration of the claim was the obligation of the creditor.
Meanwhile, creditors have approved a resolution plan for Adani Enterprises worth more than ₹15,000 crore on 31 October 2025 and the National Company Law Tribunal (NCLT) approved it on 17 March 2026. The plan stated that old claims not filed, accepted or verified would be treated as nil.
The court said that allowing the customs claim would defeat the purpose of the insolvency law and expose the new owner to unexpected old charges. The aim is to give the successful buyer a “clean slate” to know what obligations they are taking on, the court added.
The court annulled the customs order confirming the duty, interest and penalties. It did not decide whether Jaiprakash Associates was actually entitled to the lower 10% duty rate as the question was no longer necessary.
Gauhar Mirza, senior partner at Saraf and Partners, which represented Jaiprakash Associates, said the ruling makes it clear that government departments must declare their claims during the insolvency process, although the exact amount has not yet been determined.
“Failure to do so may result in the claim being extinguished upon approval of the Resolution Plan,” Mirza said. He added that government bodies can still decide on their fees during insolvency but cannot later use that decision to revive an old claim that was left out of insolvency proceedings.
