TMI Blog2015 (9) TMI 1594X X X X Extracts X X X X X X X X Extracts X X X X ..... ubscriber of the petitioner company. Mr. Suresh Ramnani himself is also one of the subscribers. It is also pointed out that one Mr. Prem V. Ramnani was the Director of the erstwhile company as well as the subscriber of the present company. Another person Mr. Vishandas Ramnani who is also the subscriber of the petitioner company has shown the same address as Mr. Suresh Ramnani, Additional Director of the erstwhile company. Even though, therefore, being legal entities, we may not employ the principle of lifting of the veil and treat both the companies as a clock of each other their transaction must be seen with the degree of circumspection. There cannot be prospective dues of the outstanding taxes. It must refer to the period anterior to the date of execution of the sale deed. Even on this count, the petitioner cannot escape the liability to be answerable to the Customs Department for the past dues of the erstwhile owner. The contention of the petitioner, that the petitioner agreed to discharge only the liabilities arising after the date of the sale deed, is not in consonance with the language used in Clause 3 of Para 15 of the sale deed. Before Section 11E was added to the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said property. The erstwhile owner had outstanding dues of the State Bank of India. The case of the Customs Department is that, the said company also had sizeable unpaid customs dues. For recovery of its dues, the lending bank had filed Original Application No. 147 of 2005 against the erstwhile owner before the Debt Recovery Tribunal, Ahmedabad, and sought recovery of a sum of ₹ 20,01,73,316/- with interest. The bank, pending such original application before the Tribunal, executed consent terms with the erstwhile owner company on 20-12-2010 and requested the Tribunal to pass necessary order after recording such consent terms and to issue recovery certificate on the basis of the consent terms. In the meantime, the Customs Department had filed an application for being joined as a party in such original application on the premise that the property in question was under the attachment of the Customs Department and that since the owner company had not paid its customs dues, the Customs Department had claim over such property. 3. On 27-1-2011, the Debt Recovery Tribunal accepted the consent terms executed between the applicant bank and the erstwhile owner of the said prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled reply opposing the petition. In reply, it is contended that the sale deed itself contains a clause that the purchaser would discharge the outstanding liabilities. The erstwhile owners have unpaid customs dues of ₹ 413.87 crores. Due to non-payment of the dues, attachment order was passed on 12-6-2008 under Section 142 of the Customs Act by the Assistant Commissioner of Customs, Bhuj. Under such order, the said property was attached by drawing the panchnama on 12-6-2008. The Customs Department had filed application for being joined as a respondent in Original Application No. 147 of 2005 filed by the bank. It was pointed out that the claims were compromised by the bank upon which, the Tribunal had closed the proceedings and thereafter, the property was sold privately. It is also submitted that before the first receiver Mr. Paryani, the Customs Department had lodged its objections who, however, did not decide them and the Department was surprised when the sale was executed by Ms. Vaishali Acharya as a receiver. Mr. Paryani had informed the Department that he had no knowledge about the sale deed being executed. The Department has also produced the list of Directors of the er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority of the secured creditors therefore, would not arise. He drew our attention to Section 11E of the Central Excise Act which was introduced w.e.f. 8-4-2011 which provides that, the first charge of the dues of the Department is on the property of the defaulter. He submitted that, by virtue of Section 129E of the Customs Act, this provision is made applicable also to the customs dues. (II) Counsel submitted that there has been no delay on part of the department. In the year 2008, order of attachment was passed despite which, the erstwhile owner, in the guise of compromise with the lending bank through a private sale, sold off the property. In the meantime, the Department had already filed an application before the Tribunal for being joined as a party to permit raising of all objections. (III) Counsel further submitted that there is a close connection between the Directors of the erstwhile owner company and the subscribers of the present purchaser, private limited company. This is, therefore, a fit case where corporate veil should be lifted. Both are substantially the same entities and sale by one to other is a same transaction. In this context, counsel relied on the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw the proceedings from the Tribunal. 13. In view of such settlement, the parties executed a consent terms dated 16-12-2010 and presented them before the Tribunal and requested the Tribunal as under : 11. Therefore it is requested by the parties to this Hon ble Tribunal to pass necessary and proper order, after recording the aforesaid consent terms and be pleased to issue Recovery Certificate on the basis of consent terms. That the present consent terms have been executed by the parties at their free will and without any coercion and shall be binding to all and their successor and legal heirs and administrator or attorney. 14. The Tribunal, thereupon, passed its order dated 27-1-2011 which reads as under : 1. Shri Mohan Solanki Advocate appears on behalf of Shri P.G. Desai Advocate. Shri H.N. Dave, Advocate appears on behalf of the defendant No. 1. Shri Bhavesh Modi, Advocate appears on behalf of the third party. 2. Parties have filed consent terms Exh. A/28. I have gone through the said consent terms. The said consent terms is duly signed by the autohrized officer of the applicant as well as defendants Nos. 1 to 7 except defendant No. 2. Further the said consent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both sides to appoint a receiver, on being persuaded that all that the receiver has to do is to execute sale deed in terms of the consent terms, the Tribunal appointed one Shri G.V. Pariyani as a receiver. Significantly, with respect to the Department s application for being joined in the proceedings to enable the Department to recover its dues as a co-applicant, the Tribunal held and observed as under : 4. Exh. T/32 is an application filed by the Customs Department for recovery of dues/claim of excise duty. It is prayed that it be joined as co-applicant. Defendants have opposed the said application by the filing a reply. This original application was filed on 2-8-2005. Application Exh. T/32 is filed in the year 2010 almost after five years. However, since the matter has been compromised, now the said application is required to be closed. All other connected proceedings were also disposed of. 16. There is no order on record passed by the Tribunal changing the receiver. Nevertheless, it appears that the sale deed was executed by one Ms. Vaishali Acharya and not Mr. Pariyani on 15-11-2011. One of the important conditions of this sale deed contained in Para 13(III) read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ented the purchaser before the bank and the bank accepted the total sale consideration of ₹ 210 lacs from the purchasers towards the part satisfaction of its dues against the erstwhile owner company. The property was admittedly under attachment of the Customs Department imposed in the year 2008 and it was thus sold privately between the two entities which had, in any case, extremely close connection. Merely because therefore the sale was witnessed by the lending bank, the cloud over such a transaction would not automatically disappear. 19. In this context, we may see one of the important conditions of the sale deed itself, in which, in Para 15(3) of the sale deed, the purchaser agreed that the purchaser alone from the date of the sale deed, be liable to pay all the outstanding taxes dues and any other liabilities of any nature including Government, Semi-Government, etc., in respect to the said immovable properties and the said plant and machineries. One thing is, therefore, clear viz. the purchaser agreed to discharge the outstanding taxes, duties and other liabilities including dues of the Government or Semi-Government organizations. This reference in the sale deed must b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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