TMI Blog2011 (9) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... without any guarantee and IFCI Ltd. shall not entertain any claim/complaint from the buyer for any deficiency in quantity/size/number etc. for recovery of whole or any part of the bid, purchase money, loss of profit/interest, damages etc. 2.7 The unit may have certain outstanding liabilities which are to be met by the purchaser and which will be over and above the purchase consideration. The prospective purchaser may carry out due diligence in respect of likely liabilities pertaining to the unit before submitting the tender. It may be noted that the purchaser will be responsible for meeting these liabilities, if arise, and IFCI Ltd. will not be liable to meet any such liabilities whatsoever. 3. The petitioner was found highest bidder, but the sale of assets became subject matter of challenge before the Debt Recovery Tribunal, Delhi on behalf of the Company, in which the petitioner was impleaded as Respondent No. 2. The Debt Recovery Tribunal considered the various issues raised by the Company including the issue; Whether the IFCI has failed to give the details of statutory dues in the sale notice, which is mandatory as per Rule 8(6) of the Security Interest (Enforcement) Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der accordingly. This issue is also decided in favour of the respondent FI and against the applicant Company. 4. The petitioner filed an appeal before the Debts Recovery Appellate Tribunal, Delhi, which was dismissed as not pressed. The order passed by the Appellate Tribunal on 23-11-2010 reads as under : Counsel for the appellant and counsel for the respondent - IFCI Ltd. present. Counsel for respondent No. 3 also present. Arguments heard. At this stage, counsel for the appellant wants to make a statement who is present along with Mr. G.S. Shekhawat. He submits that the appellant is willing to pay the dues on the unit if and when arise and crystallized by the authorized government agency in point 2.7 of tendered document. Counsel for the respondent - IFCI has no objection. He gives his consent to this factual situation. In view of this, the bank will issue the sale certificate and handover the peaceful possession to the appellant within seven or thirty days as per the agreement after the deposit of the said amount. Subject to these terms and conditions, the appellant does not press his appeal. The appeal is, therefore, disposed of as stated above. 5. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries Private Limited v. Superintendent of Central Excise, Amravati - 2009 (247) E.L.T. 3 to contend that proviso to Section 11 of the Central Excise Act is applicable to bind the successor with the liability of the predecessor, when there is transfer of the business and not when the assets of the Company are sold to realize the dues of a creditor. Learned counsel for the petitioner also relies upon State of Mysore v. D. Cawasji Company - AIR 1971 SC 152 and Orissa State Financial Corporation v. Transport Commissioner-cum-Chairman, Sta Others - 2005 (11) SCC 440 to contend that the agreement binding the purchaser with the dues cannot be invoked in the absence of any statutory creation of first charge on the date of sale. 8. On the other hand, Mr. Ghuman, learned counsel for the respondent-Union of India, pointed out that the principle laid down in the judgments relied upon by the petitioner that crown debt has a priority only amongst unsecured creditors after satisfying the claim of secured creditors is not an issue. The question is that in terms of conditions of Tender inviting bids, the purchaser i.e. the petitioner, is bound to satisfy the outstanding liabilities ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has first charge, but the said argument was negated. It may be pointed out that the claim of the respondents is not based upon the fact that the liability of the Company in respect of non-payment of Central Excise or Sales Tax is the first charge on the assets of the Company. But it is argued that in terms of the conditions of Tender, the petitioner is liable to satisfy such liabilities. Therefore, it is a part of contract, the conditions of which was accepted by the petitioner while offering its bid for purchase of the assets of the Company. 13. Though Clause 2.6 is a general condition that sale is on AS IS WHERE IS AND WHATEVER THERE IS BASIS . But in respect of the outstanding liabilities, Clause 2.7 is relevant. The said Clause points out that the unit has certain outstanding liabilities, which are to be met by the purchaser and which will be over and above the purchase consideration. The prospective purchaser was to carry out due diligence in respect of likely liabilities pertaining to the unit before submitting the tender. Therefore, when the petitioner submitted its offer, it is presumed to have examined the documents such as balance-sheets and profit loss account of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement, it has been intimated by the Financial Corporation that the purchaser will not be liable for prior due does not discharge the statutory liability of the respondent. The said judgment does not deal with the issue arisen in the present case, as in the present case even though there is no statutory liability, the parties can still agree for payment of dues. There is no statute which bars for such a tender condition as is contained in Clause 2.7 reproduced above. 16. Still further, in our opinion, Clause 2.7 cannot be restricted in respect of the liabilities of the Unit having first charge. Such condition does not expressly or impliedly leads to such conclusion. Therefore, it is immaterial if the Central Excise dues or the Sales Tax dues are not the first charge, as the petitioner is liable to pay outstanding liabilities in terms of Clause 2.7 of the Tender conditions. 17. Somewhat similar question in respect of the dues of the municipal corporation, an unsecured creditor, when public notice stated that the sale [is on as is] where is basis, came up for consideration before the Hon ble Supreme Court in AI Champdany Industries Limited v. Official Liquidator, (2009) 4 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
