TMI Blog2021 (11) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - Company Appeal (AT) (Ins) No. 714 of 2021 - - - Dated:- 22-11-2021 - (Justice M. Venugopal) Member (Judicial) , (V.P. Singh) Member (Technical) And (Dr. Alok Srivastava) Member (Technical) For the Appellant : Mr. Shiv Shankar Banerjee and Madhurima Ghosh, Advocates For the Respondents : Mr. Ratnanko Banerjee,, Sr. Advocate with Mr. Ashish Mukherjee, Ms. Shruti Gupta, Advocates for Respondent No. 1 Mr. Sanjay Bajoria, Respondent No. 1 (Authorized Representative) JUDGME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thari 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 liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in liquidation once the property is out of the liquidation process. The Learned Counsel for Appellant has thus argued that the Adjudicating Authority has quashed the demand notice and also directed that the trade licence be given, when the said properties were not in the purview of IBC and the NCLT did not have jurisdiction 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. The Appellant has contended that once the liquidation sale has been completed and the certificate of sale executed followed by giving possession to the auction purchaser, any action relating to such property ceases to be under the purview of IBC. It is undisputed that the auction sale was completed on 5.10.2020 and the possession of 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with regulation 32, and reasons for the same; (d) the intended mode of sale and reasons for the same in accordance with regulation 33; (e) expected amount of realization from sale; and (f) any other information that may be relevant for the sale of the asset. (3) The asset memorandum shall provide the following details in respect of each of the assets other than those referred 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 . R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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