Salil Shashank Kulkarni Vs. Rubique Technologies India Private Limited - it emerges that the primary object of the IB Code, 2016 is value maximization as well as revival/resolution of the financially stressed corporate debtors. . . . . . .Even otherwise, as it has been held in Essar Steel India Ltd v/s Satish Kumar Gupta’s case (supra), the time frames are directory and not mandatory in nature.

 NCLT Mumbai-2 (2024.01.24) in Salil Shashank Kulkarni Vs. Rubique Technologies India Private Limited [IA No. 4372 of 2023 in CP (IB) No. 4304 (MB) of 2019] held that;

• What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern.

• However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation

• Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind.

• it emerges that the primary object of the IB Code, 2016 is value maximization as well as revival/resolution of the financially stressed corporate debtors.  . . . . . .Even otherwise, as it has been held in Essar Steel India Ltd v/s Satish Kumar Gupta’s case (supra), the time frames are directory and not mandatory in nature.

Excerpts of the order;

# 1. This is an application filed by the Applicant, who is a Resolution Professional (‘RP’) of the Corporate Debtor, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (‘IB Code’) inter-alia seeking extension of the Corporate Insolvency Resolution Process (‘CIRP’) period and withdrawal of liquidation application for the purpose of considering a resolution plan proposed by an individual named Mr. Pravin Kumar Jain. 

# 2. The averments made by the Applicant in his application and as argued by the Learned Counsel for the Applicant are briefly stated as under: 

i. The Corporate Debtor was admitted into CIRP by this Hon’ble Tribunal vide Order dated October 07, 2020 u/s 9 of the IB Code and Mr. Ajay Gupta was appointed as Interim Resolution Professional (‘IRP’) of the Corporate Debtor. 

ii. A Committee of Creditors (‘CoC’) of the Corporate Debtor was duly constituted comprising of Blacksoil Capital Private Limited (‘BCPL’), the sole Financial Creditor of the Corporate Debtor. In the subsequently held CoC Meetings, the erstwhile IRP and CoC held discussions on the matter of inviting expressions of interest (‘EoI’) in Form G of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 from prospective resolution applications. 

iii. However, in the 06th CoC meeting held on April 5, 2021 (being the day on which the CIRP period ended), it was decided by the CoC to commence liquidation proceedings against the Corporate Debtor. In light of the aforesaid, the Applicant filed I.A. No. 1059/2021 on May 14, 2021 before this Tribunal u/s 33 & 34 of the IB Code praying for liquidation of the Corporate Debtor. 

iv. During the pendency of Liquidation Application before this Hon’ble Tribunal, the erstwhile IRP received a letter dated June 02, 2022 from an individual resolution applicant named Mr. Pravin Kumar Jain, who had expressed his interest in acquiring the Corporate Debtor as a going concern. Pursuant to the receipt of aforesaid letter, the erstwhile IRP informed BCPL of the resolution applicant’s expression of interest. In turn, BCPL advised the Applicant herein to invite a proposed resolution plan from the resolution applicant. 

v. Therefore, a meeting was held between the erstwhile IRP and Resolution Applicant, wherein the Resolution Applicant was provided with information/documents to enable it to prepare a proposed resolution plan with respect to the Corporate Debtor. Vide Letter dated 08th June, 2022 addressed by the Resolution Applicant to the erstwhile IRP, the former submitted its proposed resolution plan. BCPL informed the erstwhile IRP that it was willing to consider, negotiate and deliberate upon the proposed resolution plan. 

vi. However, despite addressing several emails, the erstwhile IRP neither convened the meeting nor responded to the email. In the foregoing circumstances, BCPL filed an Interim Application No. 2470/2023 on June 09, 2023, inter-alia, praying for extension of CIRP period and appointment of the Applicant herein as the IRP of the Corporate Debtor. Vide Order dated 31.07.2023, the Hon’ble Tribunal was pleased to partially allow the said application by appointment of the Applicant as IRP and dismissed all other prayers as not pressed. vii. Thereafter, upon the appointment of the Applicant as IRP, the Applicant received an email dated August 11, 2023 from the BCPL, the only CoC member, requesting to convene a meeting in furtherance of BCPL’s request for withdrawing the liquidation application and extending CIRP period with a view to consider the proposed resolution plan by an individual resolution applicant. The Applicant submits that there is a possibility of revival of the Corporate Debtor in view of the proposed resolution plan and the willingness of CoC to deliberate upon it. However, the 180-day period from the insolvency commencement date ended on April 05, 2021 subsequent to which a liquidation application was filed. Despite BCPL’s repeated requests as the sole member of CoC, the erstwhile IRP did not file an application for withdrawal of liquidation application and for extension of CIRP period. viii. In view of the aforesaid developments, the Applicant herein has filed this application before the Hon’ble Tribunal seeking appropriate directions for (a) dismissal of the Liquidation Application; (ii) revival/extension of the CIRP period by 90 days u/s 12 of the IB Code; and (iii) exclusion of the period commencing from April 05, 2021 to the date on which the Hon’ble Tribunal passes an order for revival of CIRP period. Hence this Application. 

FINDINGS 

# 3. We have heard the learned Counsel for the Applicant and perused the records. 

# 4. This is an application filed by the Applicant, who is a Resolution Professional (‘RP’) of the Corporate Debtor, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (‘IB Code’) inter-alia seeking extension of the Corporate Insolvency Resolution Process (‘CIRP’) period and withdrawal of liquidation application for the purpose of considering a resolution plan proposed by an individual named Mr. Pravin Kumar Jain. 

# 5. On perusal of records, we find that the statutory CIRP period of 180 days in respect of the Corporate Debtor came to an end on 05.04.2021. Therefore, the CoC in its 06th Meeting held as on that date had resolved to liquidate the Corporate Debtor. Accordingly, the erstwhile IRP Mr. Ajay Gupta filed an Interlocutory Application No. 1059/2021 u/s 33 of the IB Code for liquidation of Corporate Debtor. On 02nd June 2022, during the pendency of liquidation application, an individual resolution applicant named Mr. Pravin Kumar Jain has expressed his interest to the erstwhile IRP in acquiring the Corporate Debtor as a going concern. The CoC comprising of sole financial creditor Blacksoil Capital Private Limited (‘BCPL’) called upon the erstwhile IRP to convene a meeting for consideration of the proposed resolution plan, but the erstwhile IRP failed to convene a meeting. BCPL finally addressed an email dated May 30, 2023 to the erstwhile IRP, in exercise of its right under Regulation 18(2) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and requisitioning a CoC meeting within 48 hours to consider replacement of IRP/RP u/s 27 of the IB Code and extension of the CIRP period for the purpose of considering the proposed resolution plan for revival and rehabilitation of the Corporate Debtor. 

# 6. However, the erstwhile IRP neither convened a meeting nor responded to the email dated 30.05.2023. Therefore, BCPL had an I.A. No. 2470/2023 on June 09, 2023, inter-alia, for replacement of the erstwhile IRP with the Applicant herein. The I.A came to be partly-allowed by this Tribunal vide Order dated 31.07.2023 with the directions to replace the erstwhile IRP with the Applicant herein and all other prayers were rejected as not pressed. After the appointment of the Applicant as IRP of the Corporate Debtor, the Applicant had received an email dated August 11, 2023 from the Advocates of BCPL requesting to convene a meeting for the purpose of the withdrawing the liquidation application and extension of CIRP period for the sake of considering the proposed resolution plan for revival and rehabilitation of the Corporate Debtor. It is in the backdrop of these facts, that the present application has been filed by the Applicant on 19.09.2023 for extension of CIRP period. Thus, there seems to be no delay on the part of the Applicant in approaching this Tribunal for extension of CIRP. 

# 7. We observe that the object of IBC, 2016 is to maximize the value of assets for the benefit of stakeholders. The Hon’ble Supreme Court in the matter of Swiss Ribbons Pvt Ltd & Anr. v/s Union of India (2019 INSC 95) has observed at Para 11 as follows: 

• “11. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganization and insolvency resolution of corporate debtors. Unless such reorganization is effected in a time-bound manner, the value of the assets of such persons will deplete. Therefore, maximization of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor is brought back into the economic mainstream, it is able to repay its debts, which, in turn, enhances the viability of credit in the hands of banks and financial institutions. Above all, ultimately, the interests of all stakeholders are looked after as the corporate debtor itself becomes a beneficiary of the resolution scheme – workers are paid, the creditors in the long run will be repaid in full, and shareholders/investors are able to maximize their investment. Timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets. Since more investment can be made with funds that have come back into the economy, business then eases up, which leads, overall, to higher economic growth and development of the Indian economy. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern.” 

# 8. The Hon’ble Supreme Court in Essar Steel India Ltd. through Authorised Signatory v. Satish Kumar Gupta & Ors. (Civil Appeal No. 8766-67/2019) dated 15.11.2019” had observed at Para 79 of the Judgment as under: 

• “The effect of this declaration is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings. However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days. Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind. It is only in such exceptional cases that time can be extended, the general rule being that 330 days is the outer limit within which resolution of 9 the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation.” (Emphasis Supplied) 

# 9. Keeping in view the law laid down in the above cited cases, it emerges that the primary object of the IB Code, 2016 is value maximization as well as revival/resolution of the financially stressed corporate debtors. Keeping that in mind, we are of the considered view that since one resolution plan has been received by the CoC during the pendency of liquidation application which the CoC intends to consider to save the Corporate Debtor from liquidation, it would be just and proper to give another chance which may help revive/resolve the Corporate Debtor. No doubt considerable time has already elapsed. However, in our considered view, despite that, a last-ditch effort can be afforded to the CoC keeping in view the overall interests of all the stakeholders involved. Even otherwise, as it has been held in Essar Steel India Ltd v/s Satish Kumar Gupta’s case (supra), the time frames are directory and not mandatory in nature. As a result of the following, we allow the present application in following terms: 

ORDER 

• i. The Liquidation Application vide I.A. No. 1059/2021 is hereby dismissed as withdrawn with liberty to the CoC to consider the resolution plan submitted by Mr. Pravin Kumar Jain; 

• ii. The period from April 05, 2021 to the date of this Order shall stand excluded from the CIRP period and the CIRP period of the Corporate Debtor shall stand extended by 60 days from the date of the Order; 

• iii. Accordingly, the I.A No. 4372 of 2023 stands allowed and disposed of in aforesaid terms. 

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Assistant Commissioner, CGST & CX, Joka Division Vs M/s. Environ Energy Corporation India Private Limited, - We find no merit in the application made by the GST department on both counts (i.e.) extraordinary delay in submitting the claim before the liquidator which is 664 days from the date the claim ought to have been filed and delay in filing this appeal before the Adjudicating Authority which is nearly four months beyond the statutory time limit, prescribed under Section 42 of IBC.

  NCLT Kolkata (31.05.2005) in Assistant Commissioner, CGST & CX, Joka Division, Kolkata South Commissionerate Vs M/s. Environ Energy Corporation India Private Limited, [I.A. (IB) No. 1472/KB/ 2023 In CP (IB) No. 1106/KB/2019] held that;

• We find no merit in the application made by the GST department on both counts (i.e.) extraordinary delay in submitting the claim before the liquidator which is 664 days from the date the claim ought to have been filed and delay in filing this appeal before the Adjudicating Authority which is nearly four months beyond the statutory time limit, prescribed under Section 42 of IBC.

Excerpts of the order;

# 3. This application has been preferred under Section 42 of the Insolvency and Bankruptcy Code, 2016 (IBC) by the Assistant Commissioner, CGST on Central Excise, Joka Division, Kolkata South Commissionerate, (hereinafter referred to as ‘Applicant / GST Department’) against M/s. Envaron Energy Corporation India Private Limited (in Liquidation) represented by its Official Liquidator Mr. Rakesh Kumar Agarwal (hereinafterreferred to as Corporate Debtor/Respondent).

# 4. Under Section 42 of the IBC, the Applicant has sought the following relief:

a) To direct the Official Liquidator to accept and consider the claim of the applicant;

b) Delay in preferring the instant applicant (if any), be condoned by this Tribunal for the interest of justice;

c) Delay of 664 days to prefer the claim before the Official Liquidator be condoned by this Tribunal for the interest of justice;

d) Accept the claim of the Applicant as mentioned in the Order-in-Originals stated in paragraph no. 2 hereinabove;

e) Such other and further order may be deemed fit and proper.

# 5. Factual Matrix:

5.1. The GST department had issued show cause notice and consequent orders in original Demanding Service Tax on the Corporate Debtor through 3 separate orders annexed as Annexures A1, A2 and A3 to the application.

5.2. The order in original dated 10.03.2017, annexed as Annexure A1 demanded a sum of Rs.5,11,56,977/- along with interest and penalty of Rs.5,11,56,977/-.

5.3. The Order in original dated 31.05.2018 issued by the GST Department, annexed as Annexure A2, demanded a sum of Rs.94,66,590/- along with interest and penalty of Rs.9,46,659/-.

5.4. The Order in original dated 03.05.2019 which is annexed as Annexure A3 has demanded a sum of Rs.1,42,49,024/- along with interest and penalty of Rs.14,24,902/-, apart from late fee of Rs.59,100/-. All these orders were served on the Corporate Debtor , claims the Applicant.

5.5. Subsequently, a show cause notice was served on the Corporate Debtor dated 28.06.2019 which is annexed as Annexure A4 demanding Rs.12,22,36,041/- along with interest, apart from proposing to levy a penalty of Rs. 22,22,36,041/-

5.6. In response to the said show cause notice, the Corporate Debtor through its Liquidator had replied by submitting the order of NCLT, Kolkata Bench 19th May of 2021 informing about the liquidation order passed and the same was attached as the response to the show cause notice dated 28.06.2019. 

5.7. The GST department claims that this response to the show cause notice was received only on 16.03.2023 and consequently, they lodged their claim in the prescribed Form B of IBBI (Liquidation Process Regulations, 2016) on 13.04.2023.

5.8. On 24.04.2023, the Applicant GST Department , received an e-mail from the liquidator of the Corporate Debtor informing that the Liquidation Process of the respondent company commenced on 19.05.2021 and the last date for filing the claim as per the public announcement made is 18th June 2021. The Official Liquidator, therefore, declined to admit the claim made by the Applicant on 13th April 2023, which is after a delay of 664 days. Consequent, to this e-mail received from the Liquidator on 24.04.2023 this application has been filed by the GST, Department on 30.08.2023 seeking the reliefs mentioned above.

# 6. Applicant’s Submission: -

6.1. The Learned Counsel for the appellant submits that they became aware of the liquidation of the company only on 16.03.2023 and immediately on becoming aware they filed the claim with the liquidator on 13.04.2023 in Form B as prescribed under the (IBBI), Liquidation Process Regulations, which is well within 30 days from the date of coming to the

know of the Liquidation. 

6.2. It is submitted that they were never informed about the commencement of Liquidation by the Corporate Debtor; therefore, this has resulted in a delay of 664 days to prefer the claim before the Liquidator

6.3. Considering that the revenue of more than 60 crores of rupees due to the National Exchequer is involved in this case, the delay in preferring this claim may be condoned under the above facts and circumstances and the Liquidator may be directed to admit the claim in the interest of revenue/nation.

# 7. Respondent’s Submission per contra: -

7.1. Learned Counsel for the Liquidator claims that the advertisement for inviting claim as per IBBI Liquidation Process Regulation, 2016 was made in Form B of Schedule II within 5 days from the date of order of liquidation by NCLT on 19.05.2021. The public announcement was made in two large English papers as well as in the vernacular newspapers. The public announcement called upon all the stakeholders to submit their claims within 30 days from the date of advertisement.

7.2. As per Regulation 17 of the IBBI (Liquidation process) Regulation an Operational Creditor like GST Department will have to submit proof of the claim to the liquidator in the prescribed form with relevant documents to prove their claim.

7.3. The Regulation also provides that in case the OperationalCreditor has submitted its claim during the CIR process the same shall be deemed to submitted under Section 38 of IBC which is the section that governs the submission of claims before the liquidator. Having not done so the Operational Creditor/GST department has lost the opportunity to submit their claim at this stage when liquidation is at the far end of the process.

# 8. Analysis and Findings:

8.1. As per the pleading and records placed in the application, we find that the Orders passed by the GST department are with reference to the demands made under the erstwhile service tax regime.

8.2. As per Section 87 of the Finance Act, 1994 (which govern the Levy and Collection of Service Tax) for Recovery of any amount due to the Central Government there is a recovery mechanism which includes attachment of the Bank Accounts/ moveable and immoveable properties etc. and the same can be done and such attached properties can be sold and dues to the Government could be recovered.

8.3. In the given case nothing has been placed on record by the GST department that such recovery proceedings have been initiated for the recovery of such huge sums to the exchequer. In the absence of any such action placed on record, we will have to infer that no such action has been taken by the GST department. Having failed to do so they should have at least submitted their claim before the Resolution Professional during CIRP of the Corporate Debtor. Nothing has been placed on record to suggest that the GST department has submitted their claims during the CIR process with the Resolution Professional.

8.4. Thus, they failed to take any action even during the CIR process. GST Department cannot claim ignorance of the commencement of CIRP of its own assessee, from whom large sums are due when such proceedings are made public at large by way of public announcement in newspapers apart from the announcement in the Insolvency Bankruptcy Board of India, website.

8.5. The regulations made under IBBI do not provide for individual communication to creditors about the CIRP process or Liquidation Process as the same would delay the entire time-bound CIRP/Liquidation process. That is why we are of the view that the law has prescribed for public announcements in large newspapers.

8.6. Therefore, the claim of the department that they were not aware of the CIRP proceedings/liquidation proceedings cannot be accepted particularly when the department interacts with the assessee on a monthly basis through several Returns.

8.7. In this case, they claim that they became aware when they received the response of the Corporate Debtor against the show cause notice dated 28.06.2019. The show cause notice dated 28.06.2019 would have been served within 10 days from the date of notice. Assuming that this was served during 1st week of July 2019, the response from the Corporate Debtor would have been received within 30 days from the receipt of show cause notice, as show cause notice mandates reply from the Corporate Debtor within 30 days from the receipt of show cause notice. If no such reply was received, GST Department can pass an ex-parte order after granting a hearing. Nothing of that sort has been done as per the records placed.

8.8. It is not the claim of the department that the Applicant received the notice dated 28.06.2019 only in 2023, and consequently they received the response from the Applicant only 16.03.2023. We see only delays and latches writ large on the part of the GST department.

8.9. The rejection letter from the liquidator through email was received on 24.04.2023, whereas this appeal has been preferred before NCLT on 30.08.2023. As per Section 42 of the IBC, the stakeholders will have to file an appeal to the Adjudicating Authority against the decision of the Liquidator within 14 days of the receipt of such decision. In this case, they claim to have received the rejection on 24.04.2023. In that case statutory time limit for preferring appeal before this Adjudicating Authority ends on 8th May 2023.

8.10. Even in preferring an appeal they have taken nearly another four months beyond the statutory limit prescribed in IBC and filed it only on 30.08.2023. This clearly demonstrates the lackadaisical approach of the GST department in pursuing such large demands from the Corporate Debtor.

8.11. In view of the above, we find no merit in the application made by the GST department on both counts (i.e.) extraordinary delay in submitting the claim before the liquidator which is 664 days from the date the claim ought to have been filed and delay in filing this appeal before the Adjudicating Authority which is nearly four months beyond the statutory time limit, prescribed under Section 42 of IBC.

8.12. The Legal Positions:

a. In The Deputy Commissioner Commercial Taxes (Audit), Raichur -Vs-Surana Industries Ltd. (In Liquidation) & Anr. in Company Appeal (AT) (Insolvency) No. 1525 of 2019 dated 07.02.2020, wherein the Hon'ble NCLAT has dismissed the application filed by the Applicant in relation to the Appeal against the order of the Liquidator and also held that liquidation process is a time bound process, and the Liquidator has to conclude his proceedings within one year. (Emphasis supplied)

b. Further, we are fortified by the decision of a Coordinate Bench. NCLT, Chennai Bench in the matter of Employees State Insurance Corporation vs. Chinnam Poorna Chandra Rao reported in [2020] ibclaw.in 180 NCLAT where it was held that the extraordinary delay […] in submission of claim by applicant, is devoid of merits. Further in interest of Justice also we could not condone the delay as sought for. If such extraordinary delay is condoned, it shall defeat the very purpose of the IBC, 2016. (Emphasis supplied)

# 9. In the view foregoing, we dismiss this application being I.A. (IB) No.1472/KB/2023 in Company Petition (IB) No. 1106/KB/2019 accordingly.

# 10. No cost upon the applicant herein.

\

# 11. Certified copies of the order, if applied for with the Registry of this Adjudicating Authority, be supplied to the parties upon compliance with all requisite formalities.

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P.G. Sales Corporation v Shri Kiran Shah, Liquidator - When the vacant possession was given to the applicant, the liquidator is no more responsible in the matter. So also, this Tribunal is not having jurisdiction to entertain the applications which fall outside the ambit of liquidation process.

NCLT Ahd-2 (17.01.2024) in P.G. Sales Corporation v Shri Kiran Shah, Liquidator [IA No. 752 of 2023 IN C.P. (IB) No. 77 of 2018 ] held that;

• When the vacant possession was given to the applicant, the liquidator is no more responsible in the matter. So also, this Tribunal is not having jurisdiction to entertain the applications which fall outside the ambit of liquidation process.

Excerpts of the order;

# 1. An application has been filed under Section 60(5)(c) and other applicable provisions of the IBC 2016, by the successful auction purchaser (P G Sales Corporation) of certain assets from the liquidator of the Corporate Debtor which is presently under liquidation vide orders of this Tribunal dated 23.09.2019. The Respondent No.1 is Mr Laxmanbhai Mohanbhai Vegad, the security guard who is stated to be staying at the premises of the corporate debtor. The Respondent No. 2 & 3 are the Police Inspector of Bortalav Police Station, Bhavnagar and Shri Kiran Shah, the liquidator of the corporate debtor respectively.

# 2. It is submitted by applicant that the Respondent No.3 had sold the assets of the corporate debtor from time to time and pursuant to an e-auction dated 12.03.2023, showed willingness to buy the assets of the property of certain land and building on Lease Rights of Land (2526.88 sq metres with Industrial Shed admeasuring 839.38 sq meters) situated at Plot No.36, C.S No.6095, Kumbharwada, Madhia Road, Bhavnagar. The Reserve Price was Rs.166.93/- lakhs with EMD of Rs.16.69/- lakhs. Applicant was the successful bidder under e-auction held on 13.04.2023 for sale of the assets on “as is where is basis” and “no recourse basis” as per the terms and conditions of the e-auction process document. The assets were purchased at a cost of Rs.1,73,93,000/- plus GST and a sale confirmation letter dated 17.05.2023 was given by the respondent to the applicant. Vide letter dated 21.06.2023 the Respondent No.3 also handed over the vacant and peaceful possession of land and industrial sheds (property) to the successful purchaser (applicant) who has received it on same date and also stated to have received to “complete satisfaction and without any qualification/observation”.

# 3. It is submitted that a security guard (respondent No.1) appointed originally by the suspended management and continued by the security agency appointed by the respondent No.3 (on humanitarian grounds) has refused to leave the premises claiming an unfettered right to live on the premises since he has been staying there for many years. The Respondent No.1 is stated to have approached the local court with a view to enforce tenancy rights on industrial premises. The applicant enclosed a copy of the Civil Suit No.782/2020 wherein the Respondent No. 1(versus Pankajbhai Haribhai Varia and another 2

defendants) had sought a permanent injunction against eviction from rented premises. Later on he has withdrawn the petition with right to file fresh suit. The applicant also filed a letter with the Police Inspector (Respondent No.2) stating that the property bought by them on handing over of possession on 21.06.2023 from liquidator and when it was taken up for demolition of dilapidated shed, Respondent No.1, who was watchman, and his sons harassed them to stop the work.

# 4. Respondent No.1 has refuted all allegations made against him and stated that he has been staying in the premises in a small room where he has been staying with his family (and has been working as security guard) for last 39 years and the corporate debtor/suspended management used to deduct the rent amount of the room situated at disputed premises. As he has been in peaceful, continuous, uninterrupted and unobstructed possession of room, he is entitled to own the premises on the basis of “The Doctrine of Adverse Possession” and the principles laid down by Hon'ble Supreme Court in various matters. He has also stated that the property that has been sold by the liquidator has been a disputed premises of title and ownership since long and a civil suit before the Civil Judge Bhavnagar in Civil Suit No.73 of 2009 wherein status quo was granted against the transfer of disputed land/property of the said application was allowed by learned Civil Judge, Bhavnagar vide order dated 11.01.2011. Accordingly, there was a concealment of material facts and the Tribunal has been misguided on the sale of property done by liquidator as per the respondent. Further, he has clarified that it was in another civil suit  No.782 of 2020 preferred against the SBI and Mr Kiran Shah (liquidator and R-3) who were threatening to take over his premises, was withdrawn with the condition if in the future any sort of threat would be given or the premises of Respondent No.1 would be vacated without following due process of the law, then the Respondent no.1 would have liberty to approach the Civil Judge Bhagvnagar.

# 5. The liquidator has stated that the SBI as financial creditor of the corporate debtor had while taking action under SARFESI Act 2002, had appointed a security agency for protecting the assets in question and the agency has continued the engagement/employment of Respondent No.1 as security guard for the purpose. He had on sensing something wrong with the arrangement changed the security agency, but the Respondent No.1 was not inclined to leave the factory premises of the corporate debtor on the contrary claimed tenancy rights on the assets. Further in the year 2020 when the civil suit was filed before the

Hon'ble Civil Court at Bhavnagar claiming tenancy rights, he had contested the application and filed objection under Order VII Rule 11 in the matter and further had preferred  Special Civil Application before the Hon'ble Civil Court directing the court commission which was stayed by the Hon'ble High Court of Gujarat with a direction to the Addl. Civil Judge, Bhavnagar, to hear the application filed by the liquidator as expeditiously as possible in the interest of justice. Accordingly orders were reserved and on filing withdrawal pursis by the R-1, the same was dismissed as withdrawn. The liquidator has further on 21.06.2023 addressed a letter to the Police Inspector, Bortadev Police Station, Bhavnagar in the matter for assistance for vacation of Respondent No.1 from the premises.

# 6. Heard both the learned Counsels.

Conclusion:

# 7. There is no dispute regarding sale of assets of Corporate Debtor and purchased of it by the applicant. This application is not filed by the liquidator but it is filed by the purchaser, who has purchased the property. In paragraph no. F of the application, the applicant has clearly mentioned that the vacant and peaceful possession of the assets of Corporate Debtor was handed over to him by Respondent No.3 – Liquidator. This statement is also supported by the letter dated 21.06.2023 at Annexure D wherein also it is clearly mentioned that liquidator is handing over vacant and peaceful possession of the land and industrial shares of Corporate Debtor situated at Plot No. 36 CS No. 6095 Kubarwala, Madya Road, Bhavnagar, Gujarat. The applicant further verified the property and confirmed that he has obtained the vacant and peaceful possession of the land. Thus, it is crystal clear that at that time of confirming sale, the vacant possession of the premises were handed over to the applicant. As the vacant possession is handed over, it means that it was not occupied by any person at that time. After taking vacant possession from the liquidator it was duty of the purchaser to protect his properties. Therefore, now this cause will not fall within the ambit of liquidation process. Moreover, Respondent No. 1 also tried to initiate Civil Proceedings with respect to same property. When the vacant possession was given to the applicant, the liquidator is no more responsible in the matter. So also, this Tribunal is not having jurisdiction to entertain the applications which fall outside the ambit of liquidation process. In view of these  observations, the application itself is not maintainable. 

# 8. Hence, we are passing the following order:

ORDER

The application IA No. 752 of 2023 in C.P.(IB) No. 77 of 2018 is rejected.

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