Section 53 of the IBC Act --- First charge on the property –These appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016, are against a judgment dated 19th December, 2019, passed by the NCLAT dismissing Company Appeal, against an order dated 27th February 2019 of the Adjudicating Authority, rejecting the application and holding that the Government cannot claim first charge over the property of the Corporate Debtor, as Section 48 of the Gujarat VAT Act, which provides for first charge on the property of a dealer in respect of any amount payable by the  dealer, cannot prevail over Section 53 of the IBC. The question raised by the appellant is, whether the provisions of Section 53 of the IBC overrides Section 48 of the GVAT Act. The court observed that if a company is unable to pay its debts, which should include its statutory dues to the Government and/or other authorities and there is no plan which contemplates dissipation of those debts in a phased manner, uniform proportional reduction, the company would necessarily have to be liquidated and its assets sold and distributed in the manner stipulated in Section 53 of the IBC. The Committee of Creditors, cannot secure their own dues at the cost of statutory dues owed to any Government or Governmental Authority or for that matter, any other dues. The NCLAT erred in its observation that Section 53 of the IBC over-rides Section 48 of the GVAT Act. The State is a secured creditor under the GVAT Act. Such security interest could be created by operation of law. The definition of secured creditor in the IBC does not exclude any Government or Governmental Authority. The Appellate Authority (NCLAT) and the Adjudicating Authority erred in law in rejecting the application/appeal of the appellant.

Held that:- The Hon’ble High Court set aside the impugned orders and the Resolution plan approved by the CoC. The Resolution Professional may consider a fresh Resolution Plan in the light of the observations made. However, it will not, prevent the Resolution Applicant from submitting a plan in the light of the observations made above, making provisions for the dues of the statutory creditors like the appellant.