M/s Sri Gomathi Energy Private Limited, Vs. The State of Tamil Nadu & Ors - Hence, we are of the considered view that the Auction Purchaser cannot be made liable for any dues arising on the property before the purchase of the said property.

 NCLt  Chennai-II(2025.04.08) in M/s Sri Gomathi Energy Private Limited, Vs. The State of Tamil Nadu & Ors [(2025) ibclaw.in 593 NCLT, I.A.(IBC)/1395/ 2024 IN TCP/130/IB/CB/2017 ] held that;

• The Successful Auction Purchaser cannot be saddled with the past electric dues of the CD as the same has to be dealt in accordance with the process clearly laid down in IBC. It is made clear that the applicant shall not be liable to pay the past dues and shall be liable to pay the taxes and charges to get the new connection subsequent to the purchase date as per the sale deed.

• We are of the considered view that once the Liquidation sale has been completed and the Certificate of Sale has been executed followed by handing over of the possession of purchased properties to the Auction Purchaser, any claim relating to such property for dues prior to the Auction cannot be raised against the Auction Purchaser, specifically when the Company is in Liquidation and the dues were already claimed by the said party as an Operational Creditor, during the CIRP process, as the Company was in Liquidation and the respondent had already approached the Liquidator by filing a Form-B and the Liquidator has intimated to the respondent that the claim cannot be considered as it is filed belatedly.

• Hence, we are of the considered view that the Auction Purchaser cannot be made liable for any dues arising on the property before the purchase of the said property.

Excerpts of the order;

This application has been filed by Mr. L.K.Sivaramakrishnan, Liquidator for M/s. Auro Mira Bipower India Private Limited, under 60(5) of Insolvency and Bankruptcy Code 2016, seeking the following reliefs,

• i) Direct the 1st and/ or 2nd respondent to restore the existing power connection to the immovable property purchased by the Applicant from the 4th respondent, by issuing a no-due certificate in respect of the alleged past electricity due within a stipulated time frame, without insisting on the payment of any past dues by the Corporate Debtor, M/s. Auro Mira Bipower India Private Limited.; and 

• ii) Pass any such other order/ direction as deemed appropriate in the fact and circumstances of this case.

2. APPLICANT SUBMISSIONS:

2.1 . The applicant contends that the Corporate Debtor, M/s. Auro Mira Biopower India Pvt. Ltd., was admitted into CIRP, under section 9 vide order dated 01.09.2017. Subsequently vide order dated 16.07.2018, Liquidation was ordered and the 4th Respondent was appointed as Liquidator and vide order on 27.09.2019 private sale of the Corporate Debtor’s assets was approved.

2.2 . It is submitted that the Applicant purchased the Immovable Property, including land, buildings, plant, and machinery, for Rs.10,53,60,000/- through a Sale Deed executed on 12.02.2021, under Regulation 33 of the IBC Liquidation Process Regulations, 2016 and  property was sold free of encumbrances.

2.3 . It was further submitted that the Applicant submitted the Sale Deed for registration with the 3rd Respondent, paying Rs.8,20,560/- in stamp duty and registration fees. However, registration was refused, citing the absence of an NOC from the 2nd Respondent due to alleged unpaid electricity tax dues of Rs.3,04,16,748/- by the CD for the period July 2011–March 2014 and further submitted that no proof of claim was submitted by respondents regarding the same.

2.4 . It is submitted that vide order dated 01.06.2022 in IA(IBC)/1005/CHE/2021, we directed the 3rd Respondent to register the Sale Deed dated 12.02.2021. However, it is noted that the 3rd Respondent continues to deny registration, citing alleged inadequate stamp duty and non-payment of past electricity dues.

2.5 . It was emphasized that the past electricity dues of the CD cannot be enforced against the Applicant, as highlighted with recent legal precedents, including Paschimanchal Vidyut Vitran Nigam Ltd. v. HSA Traders, which establish that a new purchaser is liable only for fresh electricity dues. Further, the claim for past dues was made after the liquidation order and is barred under Section 33 of the IBC, which imposes a moratorium on proceedings against the CD. 

2.6 . It is submitted that the Applicant has taken possession of the property but cannot commence operations due to non-registration and denial of an electricity connection. This continued obstruction is causing financial loss and hardship to the applicant.

2.7 It was contented in the rejoinder that the Applicant was not aware of the tax dues and they stated that they are so far not the consumers. And non-payment of alleged dues does not entitle 3rd respondent to withhold the registration and the matter itself was held as time barred.

3. RESPONDENTS SUBMISSIONS:

3.1 It was averted that as of 12.02.2021, electricity tax dues of Rs.3,04,16,784/- were outstanding on the subject property. The Corporate Debtor was repeatedly notified since 2012 but failed to clear the dues. Consequently, the matter was referred to the District Collector, Tirunelveli, under the Revenue Recovery Act, leading the 3rd Respondent to refuse the register of the sale deed.

3.2 . It was submitted that the CD suppressed the initiation of CIRP from the authorities, causing a delayed Form-B claim submission on 22.04.2022, which the Liquidator (4th Respondent) rejected as belated. The Revenue Recovery Act invocation in 2019 was a continuation of recovery efforts initiated in 2012 and predates the liquidation process under IBC, 2016. 

3.3 . It is further submitted that the Liquidator failed to account for government dues before finalizing the liquidation, while Respondents 1 to 3 acted lawfully under the Electricity Tax Act, 2003. Non-payment of dues would result in a significant revenue loss and set a precedent for tax evasion.

3.4 . It was further submitted that Respondents 1 and 2 are not obstructing registration but enforcing statutory dues under Section 7(b) of the Electricity Tax Act, 2003. The Applicant or the CD must clear the dues before registration.

4. FINDINGS OF THIS TRIBUNAL

4.1 Heard to the learned counsel and perused the document place on record, under adjudication is an application filed by Sri Gomathi Energy private limited purchaser of the property from the liquidator of Auro Mira Biopower India Private Limited .

4.2 At this juncture it is relevant for us to discuss on the background of this case, The corporate debtor Aura Mira Biopower India Private Limited was admitted to CIRP vide order dated 01.09.2017, Liquidation was ordered against the corporate debtor vide order dated 16.07.2018 and vide order dated 27.09.2019 this tribunal permitted to conduct the private sale of the assets of the Corporate debtor.

4.3 The Applicant herein had expressed interest in purchasing the plant and machinery of 18 megawatt plant land and building of the corporate debtor measuring 8 Hectares and 95 Ares, i.e., 22.11 Acres as per patta 25.66 Acres, comprised in various Revenue Survey no.’s of  Melamaruthappapuram village, Veera Keralapudur Taluk, Tamil Nadu which is within the registration ambit of District of Tenkasi and sub registration district of Uthumalai. Upon payment of sale consideration of Rs.10,83,60,000/- the sale deed dated 12.02.2021 is executed between the applicant and 4th respondent.

4.4 Applicant has approached this tribunal seeking relief for restoring the existing power connection to the immovable property purchased by the applicant from the 4th respondent by issuing the no due certificate in respect of past electricity dues of the CD.

4.5 The respondent contended that CD Company has not paid the electricity dues and it will lead to major revenue loss to the government if the said dues are not paid.

4.6. On perusal of record it is seen that on 27.04.2021 Form B is submitted by the Director of electricity Tax and chief Electrical Inspector of government to the liquidator for the claim of Rs.3,04,16,784 , vide e mail dated 27/04/2022 the liquidator returned the Form B reasoning that the as per the public announcement date 18.07.2018 the last date for submission of claims 16.08.2018 and the claim of the department is not filed within the stipulated period hence cannot be admitted at the belated stage.

4.7 Meanwhile, IA(IBC)/1005(CHE)/2021 was filed by Sri Gomathi energy seeking directions against the Tirunelveli electricity distribution circle and electrical inspectorate government of Tamil Nadu restraining and restricting them from taking any further proceedings against the property purchased by them which will hinder them in getting fresh electricity connection from the 2nd respondent. It was noted in an order dated 01.06.2022 that the sale of the corporate debtor was executed as “As is where is, whatever there is basis”. Vide order dated 01.06.2022 realying on the decision of Hon’ble Apex court in Telengana State Southern Power Distribution Company Limited Vs Srigdhaa Beverages where it was stated by the Hon’ble apex court that dues can be claimed from the purchaser. The factual scenario of the case is that respondent auction purchaser of Srigdhaa beverages which failed to pay the dues and auction was done under securitisation and reconstruction of financial assets and enforcement of security interest act 2002. Relaying on the same this tribunal had stated that liability with regard to the property is not extinguished.

4.8 The applicant at this stage has placed reliance on the decision of Hon’ble NCLAT decision on Paschimanchal Vidyut Vitran Nigam Ltd vs HAS Traders and others. The Hon’ble NCLAT relied on the Decision in Company Appeal AT 1355 of 2022 in Chinar steel segments centre Pvt Ltd v Samir Kumar Agarwal and stated in Para 18 as follows, 

• We, thus, are of the view that submission raised by learned counsel for the Appellant that Successful Auction Purchaser was liable to pay the arrears of electricity dues which were dues of the erstwhile Corporate Debtor and without payment of said dues electricity connection cannot be granted are not in accord with the statutory scheme of IBC. The Adjudicating Authority did not commit any error in issuing direction in Para 16 of the impugned order, as extracted above, to energise the electricity connection without insisting on the payment of pre-CIRP dues. It is made clear that the Successful Auction Purchaser shall be liable to pay all dues for getting the new connection except the arrears of the electricity dues of Rs. 39,15,625/- as was being claimed by the Appellant.

4.9 Hon’ble NCLAT in the judgement mentioned above had discussed on the specific scenario of a corporate debtor in liquidation and the sale is done as per “as is what is whatever there is basis” and contented that successful auction purchaser shall not be liable for payment of the pre-existing CIRP dues of the Corporate debtor. 

4.10 The sale of the asset of the corporate debtor is done by the liquidator as per the provisions of IBC and the government dues comes within the ambit of operational debt and under section 5(21) making the government as operational creditor in terms of section 5(2) the said claim should be adjudicated as per the terms of IBC. The duty is cast on the authority to file the claim before the Liquidator as given in Regulation 16 of the Liquidation process regulation. As per reg 16(1) of the liquidation process regulation a person shall submit the claim before the last date mentioned in the public announcement and the payment of the dues is based on the claim submitted. In this case the respondent has belatedly filed the claim to the liquidator which couldn’t have been admitted. Subsequently the assets of the corporate debtor are sold to the applicant.

4.11 We are of the considered view that relying on the decision of Hon’ble NCLAT decision on Paschimanchal Vidyut Vitran Nigam Ltd vs HAS Traders and others is applicable to this case is answered by Hon’ble NCLAT and the on perusal of record that the claim was,submitted by the authority belatedly and was not admitted as it was not submitted in due time the contention of the respondent to cast the liability on the purchaser of the corporate debtor doesn’t hold any water as the said claim was already filed before the Liquidator which

is not admitted and the purchaser brought the CD as ”As is what is, whatever there is basis”. It is not implied that the belated claim which is not admitted falls under the said ambit hence we are of the considered opinion that pre CIRP dues should not be cast upon the successful auction purchaser.

4.12 Where the past dues of the corporate debtor cannot cause hindrance to the applicant to successfully take over the business and utilize the resources only to run the affairs of the CD or take forward the utilization of assets brought under auction. The Successful Auction Purchaser cannot be saddled with the past electric dues of the CD as the same has to be dealt in accordance with the process clearly laid down in IBC. It is made clear that the applicant shall not be liable to pay the past dues and shall be liable to pay the taxes and charges to get the new connection subsequent to the purchase date as per the sale deed.

4.13 We are of the considered view that once the Liquidation sale has been completed and the Certificate of Sale has been executed followed by handing over of the possession of purchased properties to the Auction Purchaser, any claim relating to such property for dues prior to the Auction cannot be raised against the Auction Purchaser, specifically when the Company is in Liquidation and the dues were already claimed by the said party as an Operational Creditor, during the CIRP process, as the Company was in Liquidation and the respondent had already approached the Liquidator by filing a Form-B and the Liquidator has intimated to the respondent that the claim cannot be considered as it is filed belatedly. Hence, we are of the considered view that the Auction Purchaser cannot be made liable for any dues arising on the property before the purchase of the said property.

4.14 For the above mentioned reasons and considerations the IA(IBC)/1395(CHE)/2024 is allowed and Respondent no 1 and 2 is directed to restore the connection and 4th respondent is directed to issue no due certificate in respect of past due of the CD, it is hereby clarified that any due/fees/taxes payable for getting the new connection or for the restoration of the said connection, after the sale deed has to be borne by the Applicant.

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Jasamrit Designers Pvt. Ltd. Vs. Mr. Gian Chand Narang, Liquidator of Apex Buildsys Ltd - A successful bidder who is declared as successful bidder of sale as going concern can seek access of the Adjudicating Authority and may pray for necessary directions in accord with and in consonance with the process document in the liquidation proceedings.

NCLAT (04.07.2023) In Jasamrit Designers Pvt. Ltd. Vs. Mr. Gian Chand Narang, Liquidator of Apex Buildsys Ltd. [Company Appeal (AT) (Insolvency) No. 258 of 2023] held that;

• When the process document clearly contemplated such consequences the said consequences shall ensue on sale as going concern and if any roadblocks come into ways of successful resolution applicant, necessary directions, clarifications can very well be issued by the Adjudicating Authority on an Application filed under Section 60(5)(c) of the Code.

• That ends of justice will be served in granting liberty to file an Application before the Adjudicating Authority claiming reliefs/concessions/directions which may be necessary for operationalisation of the Corporate Debtor as per terms and conditions of the process document.

• Successful Bidder on e-Auction of the Corporate Debtor as a going concern can make only such prayers for reliefs/concessions which are commensurate and in accordance with the terms and conditions of the process document.

• A successful bidder who is declared as successful bidder of sale as going concern can seek access of the Adjudicating Authority and may pray for necessary directions in accord with and in consonance with the process document in the liquidation proceedings.

Excerpts of the Order;

# 1. This Appeal has been filed by Successful Bidder challenging the Order dated 02.12.2022 passed by National Company Law Tribunal, New Delhi, Principal Bench (hereinafter referred to as “The Adjudicating Authority”) disposing of I.A. No. 3207 of 2022 filed by the Appellant.

# 2. Brief facts of the case necessary to be noted for deciding this Appeal are:-

a. The Adjudicating Authority passed an order dated 09.01.2020 for liquidation of Apex Buildsys Limited-Corporate Debtor.

b. E-Auction Notice was issued by the Liquidator for sale of the Corporate Debtor as a going concern. After issuance of several E-Auction Notices by the Liquidator, e-Auction Notice was issued on 04th May, 2022 fixing 23rd May, 2022 as date for e-auction. E-auction process information document was also issued inviting bids for auction/sale of M/s. Apex Buildsys Limited as a going concern in its totality along with its employees/workers.

c. E-auction document contained various annexures and formats. E-Auction Notice also contained terms and conditions of the e-auction. Prospective bidders were required to make their own independent inquiries regarding the encumbrances, title of assets/properties of the company put on auction as going concern. It is useful to extract clause 2 of Terms and Conditions of the E-Auction which is to the following effect:

“The prospective bidders should make their own independent inquiries regarding the encumbrances, title of assets/properties of the company put on auction as going concern and claims/rights/dues/affecting the assets and should conduct their own due diligence prior to submitting their bid. The e-auction advertisement does not constitute and will not be deemed to constitute any commitment or any representation of the Liquidator. The company is being sold with all the existing and future encumbrances/claims/dues/demands whether known or unknown to the liquidator. Liquidator shall not be responsible in any of way for any third party claims/rights/dues.”

d. Terms and Conditions of e-Auction under Heading P(II) Other Terms and Conditions of E-auction contains certain additional terms and conditions. Under clause 2, following has been stated:

“2. The Liquidator has proposed to conduct sale of the Corporate Debtor as a going concern in its totality as contemplated under Regulation 32(e) of the Liquidation Regulations through E-auction Process, as under: –

a. Upon payment of 25% of the bid amount, A Term Sheet shall be executed between the Liquidator representing the Corporate Debtor and the successful bidder to give effect for sale of the Corporate Debtor as a going concern in its totality alongwith its employees/workers. The broad terms are stated herein below: –

• The cut-off date for the purposes of determination of all assets and liabilities of the Corporate Debtor shall be the liquidation commencement date, i.e., January 9th 2020.

• The sale of the Corporate Debtor as a going concern shall result in the transfer of the entire available assets of the Corporate Debtor in favour of the successful bidder on the date of transfer after payment of full sale consideration amount, i.e., on the date of handover of the reins of the company.

• All known or unknown, claimed or unclaimed, disclosed or undisclosed liabilities/ obligations, risks as on the cut-off date including prior claims of all creditors whether secured, unsecured, workers, employees, statutory authorities on account of Income Tax, Sales Tax, GST, Service Tax, DGFT, Excise, Customs etc., shareholders on account of transactions prior to the cut-off date shall be dealt with as per Section 53 of the Insolvency and Bankruptcy Code, 2016 as full and final settlement of their dues. The Liquidator shall in no event be responsible for any liabilities /obligations/ risks pertaining to the period prior to the Cut-off date, and the same shall be dealt with as per the provisions of law and directions of Hon ‘ble NCL Tor any higher authority thereof.

• The transfer of ownership of the Corporate Debtor shall take place by way of writing off the entire existing shareholding of Corporate Debtor and issuance of fresh equity shares to the successful bidder. The shares shall be issued only in the name of the successful bidder and will not be issued in any other name.

• The closing date of the transaction shall be 90 days from the payment of the full consideration amount, wherein in these 90 days, all the ancillary processes as mentioned in the Term Sheet shall be executed and implemented by the Liquidator and the bidder. The said executions include but are not restricted to distribution of the purchase consideration to various stakeholders, extinguishment of shares of the Corporate Debtor, issuance of fresh equity shares to the bidder, etc.

b. Confirmation of sale: On payment of the 100% of the bid amount, and any applicable GST/Taxes, registration fees, transfer fee etc. the successful bidder shall be issued the letter for confirmation of sale. The confirmation of sale is subject to the necessary approvals and processes, if any, towards various statutory and non-statutory authorities which include but is not restricted to Securities and Exchange Board of India, Bombay Stock Exchange, National Stock Exchange, The Directorate General of Foreign Trade, Income Tax, GST Department, Factory Inspector, PCB, SIDCUL, MIDC.”

e. The Appellant was selected as a highest bidder in the e-Auction held on 23rd May, 2022. Appellant has submitted a bid of INR 91 Crores against the reserve price of INR 73 Crores. There was certain challenge by another bidder which challenge was unsuccessful. The Appellant made the payment of sale consideration. Liquidator issued a Sale Certificate dated 22nd June, 2022 to the Appellant. Appellant thereafter filed an I.A. No. 3207/2022 in Company Petition seeking certain directions/reliefs/concessions and the provisions which according to the Appellant were necessary for fulfilling and actualizing the sale of the corporate debtor as a going concern.

f. The Application was listed before the Adjudicating Authority, the Adjudicating Authority by Order dated 02.12.2022 disposed of the Application. In the order, the Adjudicating Authority noticed large number of prayers which were made by Appellant in the Application and after extracting prayers made in the Application, the Adjudicating Authority disposed of the Application by following order:

“The Applicant in this case is a successful auction purchaser of the Respondent/Corporate Debtor i.e. namely M/s. Apex Buildsys Limited.

Though the application is filed with a number of reliefs. In this application, we are not constrained to go to every aspect of the relief and concessions sought, except observing that the applicant successful auction purchaser will be entitled to seek appropriate relief from the respective department concerned in accordance with the law.

IA-3207 /2022 stands disposed of in the above terms.

In so far as the direction to ROC is concerned, we are inclined to accept the plea and direct the ROC to change the status of the corporate debtor from under liquidation to action on the application made by the applicant.”

g. The above order indicates that except one direction directing ROC to change the status of the corporate debtor from under Liquidation to action on the application made by the applicant, for other reliefs and concessions, the Adjudicating Authority observed that applicant – successful auction purchaser will be entitled to seek appropriate relief from the respective department concerned in accordance with law.

# 3. We have heard Ms. Pooja Mahajan, Learned Counsel for the Appellant and Mr. Abhishek Anand, Learned Counsel for the Liquidator.

# 4. Learned Counsel for the Appellant submits that Application filed by the Appellant seeking certain reliefs/concessions/directions were necessary to affect the takeover of the Corporate Debtor on clean slate basis. The Adjudicating Authority erred in not granting the said reliefs. The question of settlement of liabilities of the creditors under Section 53 of the Code in case of sale of a corporate debtor in liquidation is a question that ought to be decided by the Adjudicating Authority in the Application filed under Section 60(5)(c ) of the Code. It is submitted that without judicial order, the statutory authorities are not accepting settlement of their claims in terms of Section 53 of the Code. In the present case after passing of the impugned order applicant did approach various authorities for waiver of their liabilities which stood settled in terms of Section 53 of the Code however the Tax Authority informed the Applicant that since the impugned order does not grant any relief, the Appellant should contest the pending tax cases on merits. Notices have been issued by SIDCUL for payment of past dues, despite the fact that the E-Auction Process Notice specifically provided that SIDCUL’s claim will be settled under Section 53 of the Code. When the Liquidator after receipt of the sale consideration has settled all claims of the creditors, no creditors can insist for any claim which stood settled under the liquidation. It is submitted that Adjudicating Authority have passed several orders in relation to sale as a going concern allowing various reliefs, concessions and directions whereas several reliefs and concessions have been granted. Learned Counsel for the Appellant submits that due to non-consideration of various reliefs, concessions and directions which are necessary for operationalisation of Corporate Debtor as a going concern, the objective of the Code shall not be fulfilled.

# 5. Learned Counsel for the Liquidator during his submissions supported the claims for reliefs, concessions and directions as was made by the Applicant. However, in the written-submissions, the Liquidator has submitted that there are certain reliefs claimed by the Appellant in I.A. No. 3207 of 2022 which is neither permissible under the Code nor in terms of settled position of law. Liquidator further submits that sale of the Corporate Debtor as a going concern would entail transfer of both assets as well as liabilities of the Corporate Debtor in favour of the Successful Bidder. Learned Counsel for the Liquidator further raised question as to whether principle of clean slate theory will be applicable in case which is applicable in case of approval of Resolution Plan hence whether shall also be applicable with regard to sale of the corporate debtor as a going concern under Regulation 32A of the Liquidation Regulations, 2016.

# 6. We have considered the submissions of Learned Counsel for the parties and have perused the record.

# 7. From the facts brought on record, it is clear that sale of Corporate Debtor was sale as a going concern. E-Auction Process Document on the basis of sale as a going concern plays an important role and clarificatory role. Other terms and conditions of the e-auction as extracted above states that all known or unknown, claimed or unclaimed, disclosed or undisclosed liabilities/ obligations, risks as on the cut-off date including prior claims of all creditors whether secured, unsecured, workers, employees, statutory authorities on account of Income Tax, Sales Tax, GST, Service Tax, DGFT, Excise, Customs etc. are required to be dealt with as per Section 53 of the Code as full and final settlement of their claims. When the process document clearly contemplated such consequences the said consequences shall ensue on sale as going concern and if any roadblocks come into ways of successful resolution applicant, necessary directions, clarifications can very well be issued by the Adjudicating Authority on an Application filed under Section 60(5)(c) of the Code.

# 8. Further the process document clearly contemplated that transfer of ownership of the corporate debtor shall take place by way of writing off entire existing shareholding of the corporate debtor and issuance of fresh equity shares to the successful bidder. The share shall be included in the name of Successful Bidder and will not be issued in any other name.

# 9. Learned Counsel for the Appellant has brought on record the letter dated 3rd March, 2023 issued by the State Infrastructure and Industrial Development Corporation of Uttrakhand Limited informing the liquidator that necessary application for transfer of the land should be undertaken. By an affidavit dated 01st April, 2023, the Appellant has brought on record various communications received from several authorities including notices issued by various departments. Notices issued by Income Tax Department claims reference to various outstanding payments.

# 10. In view of the subsequent facts and notices brought on record by the Appellant and other terms and conditions of the process document as extracted, we are of the view that ends of justice will be served in granting liberty to file an Application before the Adjudicating Authority claiming reliefs/concessions/directions which may be necessary for operationalisation of the Corporate Debtor as per terms and conditions of the process document.

# 11. We may also observe that prayers which were included in I.A. No. 3207 of 2022 were too elaborate and general prayers which cannot be made by a Successful Bidder who have been declared as Successful Bidder. Successful Bidder on e-Auction of the Corporate Debtor as a going concern can make only such prayers for reliefs/concessions which are commensurate and in accordance with the terms and conditions of the process document. Prayers in general in a very wide term as contained in I.A. No. 3207 of 2022 may not require any consideration by the Adjudicating Authority.

# 12. We while granting such liberty to the Appellant observe that law is well settled, a successful bidder who is declared as successful bidder of sale as going concern can seek access of the Adjudicating Authority and may pray for necessary directions in accord with and in consonance with the process document in the liquidation proceedings. In result, we partly allow this Appeal and hold that applicant’s prayers i.e. relief/concessions/directions needs consideration by the Adjudicating Authority for which we grant liberty to the Applicant to make a fresh Application containing prayers which may be commensurate and in accord with terms and conditions of the process document of e-auction process document. The Appellant may submit a fresh application praying for reliefs, concessions and directions which may be considered and decided by the Adjudicating Authority in accordance with law. The Appeal is disposed of, accordingly.

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RMY Industries LLP Vs. Apple Industries Pvt. Ltd. Through its Official Liquidator - We are of the view that the Adjudicating Authority is empowered to consider any application filed by the Liquidator or Successful Auction Purchaser, which may arise with regard to terms and conditions of auction sale or sale as going concern as per the Liquidation Regulation.

 NCLAT (12.10.2022) in RMY Industries LLP Vs. Apple Industries Pvt. Ltd. Through its Official Liquidator [Company Appeal (AT) (Insolvency) No. 1114 of 2022] held that; 

• We are of the view that the Adjudicating Authority is empowered to consider any application filed by the Liquidator or Successful Auction Purchaser, which may arise with regard to terms and conditions of auction sale or sale as going concern as per the Liquidation Regulation.

Excerpts of the Order;

12.10.2022: Heard learned counsel for the appellant. This Appeal has been filed against the order dated 01.08.2022 by which order I.A. No. 880/2022 filed by the Appellant for certain reliefs and concessions has been rejected.

 

# 2. Appellant was the Successful Auction Purchaser in the liquidation proceeding where assets were sold as going concern on ‘as is where is’ basis. In the application I.A. No. 880 of 2022, the Appellant in Para 28 has claimed about 30 reliefs and concessions. The Adjudicating Authority has rejected application observing that no relief and concession can be granted.

 

# 3. Learned counsel for the Appellant has relied on judgment of this Tribunal in “Company Appeal (AT) (Ins.) No. 650 of 2020, M/s Shiv Shakti Inter Globe Exports Pvt. Ltd. vs. M/s KTC Foods Private Limited”. In the aforesaid case with regard to liquidation sale as going concern Liquidator has filed application for certain relief which was related to the past dues and prayer for extinguishment of past/ remaining unpaid outstanding liabilities, which was permitted.

 

# 4. We are of the view that the Adjudicating Authority is empowered to consider any application filed by the Liquidator or Successful Auction Purchaser, which may arise with regard to terms and conditions of auction sale or sale as going concern as per the Liquidation Regulation. We, thus, are of the view that end of justice be served in giving liberty to the Appellant to file an appropriate application before the Adjudicating Authority, which may arise from the terms and conditions of the auction sale or sale as going concern, which may be considered by the Adjudicating Authority. The Appeal is disposed of with liberty aforesaid.

 

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