KMC had assessed property tax dues on an asset of the corporate debtor located within its municipal limits.
While part payment was made in 2018, ₹30.28 lakh remained outstanding, leading to issuance of a distress warrant.
After Talwalkars Better Value Fitness Ltd. entered corporate insolvency on January 11, 2021, KMC raised a demand for the unpaid taxes and subsequently filed a claim of ₹51.72 lakh before the liquidator.
The liquidator admitted only ₹34.23 lakh and classified KMC as an unsecured operational creditor. Aggrieved, the Corporation moved the NCLT under Section 42 of the Insolvency and Bankruptcy Code (IBC).
The NCLT partly allowed the appeal but rejected KMC’s plea to be treated as a secured creditor.
This led to the…