2009 (2) TMI 911 - HC - Companies Law

Summary

Issues Involved:
1. Liability of the official liquidator to pay post-liquidation property and water taxes.
2. Interpretation of the sale terms "as is where is whatsoever there is basis".
3. Applicability of Section 530 of the Companies Act and Rule 154 of the Companies (Court) Rules.

Summary:

1. Liability of the official liquidator to pay post-liquidation property and water taxes:
The official liquidator admitted a sum of Rs. 2,79,955 as preferential claim for property tax and Rs. 2,162 for water tax up to the winding-up period, rejecting the balance claims as they pertained to the post-liquidation period. The Nigam challenged this, and the company court set aside the liquidator's adjudication, holding that the official liquidator is liable to pay post-liquidation taxes from the sale proceeds. The court emphasized that post-liquidation liabilities are part of the winding-up costs and get priority over other liabilities.

2. Interpretation of the sale terms "as is where is whatsoever there is basis":
The court held that the sale terms did not explicitly state that the purchaser would bear the liability for property and water taxes. The expression "as is where is whatsoever there is basis" was interpreted to mean that the purchaser is not responsible for statutory charges unless explicitly stated. The court noted that the terms protected the official liquidator regarding the quality, quantity, and specification of the assets but did not extend to tax liabilities.

3. Applicability of Section 530 of the Companies Act and Rule 154 of the Companies (Court) Rules:
The court found that Section 530, which deals with preferential payments, and Rule 154, which deals with the estimation of debts and claims, were not applicable to the present dispute. Section 530 pertains to taxes due up to the winding-up order, not post-liquidation taxes. The court concluded that the official liquidator's reliance on these provisions to reject the Nigam's claims was misplaced.

Conclusion:
The court dismissed the appeals, affirming that the official liquidator is liable to pay the post-liquidation property and water taxes from the sale proceeds. The court directed future sale notices to explicitly state any liabilities to avoid similar disputes. The decision of the learned judge was upheld, and the appeals were found to be without merit.