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TMI Blog2022 (5) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... addition to this, the liquidator in this case clearly put the Applicant on notice that sale of the Corporate Debtor as going concern as is where is' basis and the Applicant is duty bound to make due diligence with regard to the local taxes/maintenance fees/electricity expenses/water charges etc., outstanding as on date or yet to fall due in respect of the relevant asset should be ascertained by the E-Auction process applicant and would be borne by the successful bidder. The Applicant is not entitled for the relief sought for - application disposed off. - I.A. 1253/2021 in C.P. No. (IB) 2521/MB/2018 - - - Dated:- 6-5-2022 - Hari Venkata Subba Rao, Member (J) and Chandra Bhan Singh, Member (T) For the Appellant: Nausher Kohli, Amey Hadwale and Geeta Lundwani, Advs. For the Respondent: Rohaan Cama, Kunal Mehta and Gauri Joshi, Advs. ORDER Hari Venkata Subba Rao, Member (J) 1. The above I.A. 1253/2021 is filed by one Mr. Gaurav Agarwal who is the successful auction purchaser in respect of auction dated 03.03.2021 conducted by the Liquidator claiming several among the following relief claimed in terms of prayer clause 'ii' of the Application: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor in accordance with Regulation 32A of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, to which the Applicant state that it can't be legally assigned the liability of the Corporate Debtor as the e-auction process documents does not mention anything about the liabilities of the Corporate Debtor. Therefore, it is totally inappropriate on the part of the Liquidator to force the successful bidder to take over the liabilities of the Corporate Debtor. Even the Regulation 32A of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 requires the Liquidator to specifically identify and group the assets and liabilities. The Liquidator has however preferred only to group the assets of the Corporate Debtor to which under such circumstances the successful bidder cannot be forced to take the liabilities of the Corporate Debtor. vi. Further, the Applicant again sent a letter to the Liquidator clarifying the position as to requirement of Regulation 32A of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 read with E-auction bid process to show that the successful bidder is not required to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant on 02.04.2021 forwarded the digitally signed e-auction document and draft letter informing that the applicant would by the assets of the Corporate Debtor without liability. vi. The Applicant by an email dated 20.05.2021 forwarded Draft of Agreement viz., (1) Deed of Assignment in respect of leasehold Land and Building which is attached to the land and (2) Deed of Transfer in respect of entire assets of the Corporate Debtor, as per para 2.7 of Deed of Transfer drafted by the Applicant contemplated that as entire sale has slump sale and further the Draft Agreement contemplates that the Applicant is purchasing the assets of the Corporate Debtor and not as on going concern sale of the Corporate Debtor. vii. The Applicant via an email dated 25.05.2021 raised frivolous queries after the applicant request was rejected for the Draft Agreement and only sale certificate is enough for completing the say and threaten that the applicant wants reply in definite words and the Applicant do not want anything remain unclear so that unwanted litigation does not take place, else the applicant will have to approach NCLT/IBBI for the purpose of seeking needful clarification in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations includes both assets and liabilities or assets alone without any liabilities? 5. Before deciding the above issue, it is appropriate to mention here that the learned counsel appearing for the Petitioner during the course of the final arguments fairly conceded that the Petitioner is not pressing the other reliefs except the above relief claimed in terms of prayer clause ('ii') in relation to the liabilities 6. The main grievance of the Applicant through the above application is that the present Applicant being an auction purchaser who purchased the Corporate Debtor Company as a going concern is not bound by any of its liabilities. The above issue whether the sale of the Corporate Debtor as a going concern includes assets and liabilities or assets alone is no longer res-integra. The Hon'ble NCLAT vide its order dated 11.01.2022 in M/s. Visisth Services Limited Vs. S.V. Ramani in Company Appeal (At) (Insolvency) No. 896 of 2020 in the similar circumstances of the present case on hand at para 9 held as follows: ...9. It can be seen from the afore-noted discussion as well as Regulation 32 A of the IBBI (Liquidation Process) Regulations, 2016 that Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was pleased to partially allow CA No. 1189/2019 filed by the Liquidator. The Ld. Adjudicating Authority, while partially allowing the said CA 1189/2019 had inter alia directed closure of liquidation process of the Corporate Debtor K.T.C. Foods Private Limited without dissolution of K.T.C. Foods Private Limited. The Appellant is aggrieved by the impugned order as much as the Ld. Adjudicating Authority has denied the sale of the Corporate Debtor as a going concern to the Appellant without any liabilities including contingent liabilities and with immunity from existing litigations, if any, against the Corporate Debtor. The Ld. Adjudicating Authority has also denied the extinguishment of the remaining unpaid liabilities of the Corporate Debtor after distribution of the proceeds of the sale of Corporate debtor as a going concern as per the order of priority provided in Section 53 of the Insolvency and Bankruptcy Code, 2016 (for short IBC) as well as waiver from all the past non-compliances of the Corporate Debtor under applicable laws for the period prior to the e-auction.... 10. It is important to mention here that various prayers sought by the liquidator in the impugned applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor extinguished and all consequences of past non-compliance of the Corporate Debtor under applicable laws in the period prior to e-auction shall be waived. 12. Thus, it is very clear that the Hon'ble NCLAT in the above appeal has made its observations in the Application filed by the liquidator which is not the circumstance of the present case. It is also worthwhile to note that the sale proceeds have already been distributed as per the order of priority provided in Section 53 of the Code in the above case which is not the same in the present case. In the present case on hand, the application is filed by auction purchaser himself seeking the declaration without distribution of the liquidation proceeds to the creditors and before issuing sale certificate and possession of the Corporate Debtor. In addition to this, the liquidator in this case clearly put the Applicant on notice that sale of the Corporate Debtor as going concern as is where is' basis and the Applicant is duty bound to make due diligence with regard to the local taxes/maintenance fees/electricity expenses/water charges etc., outstanding as on date or yet to fall due in respect of the relevant asset should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidation Process Regulations, 2016 which is extracted hereinbelow: 3. Where the committee of creditors has not identified the assets and liabilities under sub-regulation (2) of regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the liquidator shall identify and group the assets and liabilities to be sold as a going concern, in consultation with the consultation committee. It is very clear from the above Clause that in fact a duty is cast upon the stakeholders committee as well as the liquidator is find out the liabilities of the Corporate Debtor. 18. In view of the above observations and the law laid down by the Hon'ble NCLAT in M/s. Visisth Services Limited Vs. S.V. Ramani, this Bench has no hesitation in holding that the Applicant is not entitled for the relief sought in prayer clause ('ii') in the above Application and the above Application deserves to be dismissed. Accordingly, the above Application is dismissed. It is once again hereby clarified at the cost of repetition that since the Applicant has given up the other reliefs other than the relief in prayer clause (& ..... X X X X Extracts X X X X X X X X Extracts X X X X
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