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2023 (4) TMI 926 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHILiquidation proceedings - settlement dues of Corporate Debtor - locus standi - whether the liquidation proceedings should be allowed to proceed or whether an opportunity with a strict time-frame can be given to the Appellant to settle the dues of the Corporate Debtor in the interest of justice, fairness and equity? HELD THAT:- There is no quarrel over the fact that the Corporate Debtor had taken a loan of Rs.36,59,250/- from ICICI on 30.04.2004 for acquiring the subject property and that the said asset is registered in the name of present Appellant though he was only a co-applicant of the loan. It is also a factual statement that the forensic audit report while estimating the value of subject property at Rs. 4 crore had also observed that the subject property should be transferred to the Corporate Debtor so that Service Tax due could be recovered from sale of the subject property to safeguard the interests of stakeholders particularly the Service Tax Department, Government of India. All the four creditors of the Corporate Debtor in the present case are statutory creditors being government departments. In respect of two statutory creditors, namely, EPFO and Income Tax Department, the amounts due and payable by the Corporate Debtor have been settled by the Appellant and the payments made. A copy of the settlement dated 21.01.2023 submitted to the EPFO office on 27.09.2023 is at Annexure A-2 in Appeal Paper Book No.275 of 2023. As regards, the third statutory creditor namely ESIC, the settlement proposal was placed before the Hon’ble High Court of Delhi for taking on record. Thus, prima-facie, the claim of three statutory creditors appears to have been settled and therefore can be considered to have been more or less extinguished. The sole surviving statutory creditor is the Department of GST which undisputedly happens to be the creditor with majority share. Keeping in view that the reserve price for auction of the subject property has been kept at Rs.1.75 crore by the liquidator, while the claim of the GST department is Rs.8.04 crore, prima- facie, it appears that even after liquidation, there is a likely possibility that the dues of this statutory creditor may remain unmet. We are also inclined to accept the contention of the Appellant that there is no material on record to show that visible steps have been taken by the liquidator with the GST department to reduce the interest component on Service Tax/penalty liability of the Corporate Debtor - the Appellant having successfully met the dues of three statutory creditors, there is no reason to deny an opportunity to the Appellant to settle the dues of the fourth statutory creditor. It has also weighed that if the dues of GST Department are also cleared by the Appellant, no useful purpose will be served by pressing ahead with liquidation. Locus standi - HELD THAT:- It has been the contention of the Respondent that the Appellant lacks the authority to offer settlement proposals to the statutory creditors. In support of their contention, they have relied on a judgment in delivered by this Tribunal. In so far as facts of that case is concerned it related to CIRP proceedings and not to liquidation proceedings and thus clearly distinguishable. Thus the ratio are not of help the Respondent in taking the stand that the Appellant has no role to play in settling the dues of the statutory creditors and in discharging the liabilities of the Corporate Debtor - Furthermore, when the present creditors are Govt. Departments which have well laid down mechanism to recover their dues and for this purpose and they have been following up with the Appellant for clearing of liabilities due from the Corporate Debtor, it does not stand to reason for the liquidator to question the locus of the Appellant. For the same reasons, we hold that the Adjudicating Authority has committed an error in rejecting the request of the Appellant to take on record the settlement proposal with EPFO on grounds of locus standi. The liquidator should assume a more positive approach in resolving the distressed position of the Corporate Debtor and not shun the bona-fide efforts being made by the Appellant in this direction to clear the debt of the Corporate Debtor - The e-auction notice published by the liquidator in the newspapers and warrant of attachment of subject property is stayed. In the interim, the Appellant is allowed to settle all dues of the statutory creditors by complying with the directions imposed.
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