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TMI Blog2021 (11) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... been brought to the notice of the Adjudicating Authority by the liquidator. The outstanding dues of the property tax relating to period prior to sale confirmation are thus dues that are akin to claim of an unsecured creditor (Bhatpara Municipality in the present case) and should be discharged in terms of the properties regarding distribution of assets given in section 53 of IBC. The auction-purchaser cannot be held liable to pay any such dues relating to period prior confirmation of sale - We are unable to accept the plea made by the Appellant that Respondent No. 1 should not be absolved from paying outstanding dues relating to the property stated in the demand notice dated 1.2.2021 amounting to 68,09,123.61. The demand notice is quashed. The auction-purchaser is held to be not liable to pay to the Appellant the amount as demanded by its notice dated 1.2.2021 - Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... .10.2017 Vide order of NCLT, Kolkata, Vinod Kumar Kothari was appointed as the Liquidator of Respondent No. 2 23.09.2020 Liquidator invited EOI for sale of Shyam Nagar Cable Manufacturing Unit by auction at reserve price of ₹ 20.63 crores. 05.10.2020 E-auction started. Ms. Vinita Bajoria emerged as highest H-1 bidder at ₹ 23.33 crores. Liquidator accepted the bid. 07.10.2020 Ms. Vinita Bajoria nominated Respondent No. 1 to complete the sale of Shyamnagar Unit in its favour. 09.10.2020 Possession of sold unit handed over to Respondent No. 1. 02.12.2020 Respondent No. 1 changed its name from Sourenee Enterprises Pvt. Ltd. to Nicco Eastern Pvt. Ltd. 04.01.2021 Respondent No. 1 sent letter to Appellant to accept payment of 3rd quarter of Municipal tax and allow rebate and also to issue instructions for issue of mutation form for effecting mutation, issue trade licence application and grant trade licence. 01.02.2021 Demand notice to liquidate outstanding dues of property tax from 1st quarter of 2015-16 to 4Th quarter of 2020-21 against holding nos. 70, 71, 73 74, E.G.P. Road, 27B NC Road, 1 and 2 Uttarpara Road of total amount ₹ 68,09,123.61 15.02.2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pass such order. 7. The Learned Counsel for Respondent No. 1 has stated that during the pendency of this appeal, the Bhatpara Municipality has granted trade licence to Respondent No.1 and also effected mutation in its name vide certificates attached at pp. 145-152 of the reply affidavit filed by Respondent No. 1 and therefore, the appeal has become infructuous. She has argued that the CIRP of the Corporate Debtor commenced on 18.1.2017 and the Bhatpara Municipality (Appellant) did not file any claim with the Resolution Professional (RP) in the CIRP. She has referred to the judgment of Hon'ble Supreme Court in the matter of AI Champdany Industries Ltd. vs. The Official Liquidator & Anr. (2009) 4 SCC 486, wherein it has been held that dues of municipal tax do not create any encumbrance. She has pointed to page 149 of the Appellant's appeal to show that the dues of property tax are prior dues, which have accrued before the properties were purchased by the Respondent No. 1 in auction sale. She has also referred to the judgment of Hon'ble Supreme Court in the matter of Ghanshyam Mishra & Sons vs. Edelweiss (2021 SCC Online SC 313), wherein the principle of clean slate has been prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these sold units was handed over to Respondent No. 1 on 9.10.2020. Thus, Respondent No. 1 became the owner of said properties on 9.10.2010. Thereafter a demand notice was issued to Respondent No. 1 of an amount of ₹ 68,09,123.61 on 1.2.2011, over 4 months after the auction sale was completed. This demand of outstanding property tax relates to the period before the sale confirmation. 11. The Learned Counsel for Respondent No. 1 has referred to the judgment of Hon'ble Supreme Court in the matter of AI Champdany Industries Ltd. vs. The Official Liquidator & Anr. (supra) to claim that dues of municipal tax do not create any encumbrance on the properties in question. They are simply a charge on the properties which is akin to claim of an unsecured creditor, and hence such a charge should stand in queue of claims to be paid out of sale assets, if such a claim has been filed in accordance with law and regulations. 12. Duty has been cast upon the liquidator to make a public announcement in Form B of Schedule II under with Regulation 12 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 to issue a public announcement calling upon the stakeholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to in sub-regulation(2) - (a) value of the asset; (b) intended manner and mode of realization, and reasons for the same; (c) expected amount of realization; and (d) any other information that may be relevant for the realization of the asset. (4) The liquidator shall file the asset memorandum along with the preliminary report to the Adjudicating Authority. (5) The asset memorandum shall not be accessible to any person during the course of liquidation, unless permitted by the Adjudicating Authority." 14. Thus the liquidator had a duty to prepare an asset memorandum containing the value of the assets. Clause (f) of sub regulation 2 of regulation 34 stipulates the inclusion of "any other information that may be relevant for the sale of the asset". Regulation 13 of the said Regulations (supra) enjoins upon the liquidator to submit a preliminary report to the Adjudicating Authority with the Asset Memorandum. Therefore, the liabilities with respect to the assets should have been brought to the notice of the Adjudicating Authority by the liquidator. 15. Clause (g) of sub section 1 of section 55 of the Transfer of Property Act, 1882 binds the seller as hereunder:- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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