TMI Blog2022 (9) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... h Section 53 of the Code in a waterfall mechanism. Once the Liquidation sale has been completed and the Certificate of Sale has been executed followed by handing over possession to the Auction Purchaser, any claim relating to such property for dues prior to the Auction cannot be raised against the Auction Purchaser specifically when the Company is in Liquidation and the dues were already claimed by the said party as an Operational Creditor , during the CIRP process as the Company was in Liquidation and the Appellant had already approached the Liquidator by filing a Form-B and the Liquidator has intimated to the Appellant that there is no amount left for the payment to any Operational Creditor , the Auction Purchaser cannot be made liable for any dues arising on the property before the purchase of the said property in this case. There are no illegality or infirmity in the Order of the Adjudicating Authority - appeal dismissed. - COMPANY APPEAL (AT) (INSOLVENCY) No. 606 of 2021 - - - Dated:- 6-9-2022 - [ Justice Anant Bijay Singh ] Member ( Judicial ) And [ Ms. Shreesha Merla ] Member ( Technical ) For the Appellant : Mr. Parvinder Chauhan , Advocate For the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and additional interest. Hence, the Auction Purchaser preferred IA 3169/2020 before the Adjudicating Authority which has allowed the Application. 3. Learned Counsel for the Appellant submitted that the subject plot was allotted to M/s. Media Video Private Limited, whose name was later changed to M/s. Neosis Industrial Ltd./(the Corporate Debtor ); permission to mortgage was granted vide Letter dated 24.06.2011, wherein the Appellant was having first charge on the plot against any outstanding recoverable dues; subsequent to the Liquidation Order dated 28.11.2019, the Liquidator published a notice for sale of the subject plot on an as is where is basis ; and nonrecourse basis ; the asset was being sold with all existing and future encumbrances and therefore the Successful Bidder was required to discharge all the liabilities of the Corporate Debtor ; a Sale Deed dated 09.06.2020 was registered in favour of the Auction Purchaser who approached the Appellant seeking mutation in its favour; as per Section 55(4)(b) of the Transfer of Property Act, the Appellant asked the Auction Purchaser for Liquidating the unpaid sale consideration in respect of the subject plot; it is open fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout any further condition . Appeal against the said order is pending and is listed on 27.08.2021. Mr. Nagesh, Learned Senior Counsel further states that the appeal is barred by limitation, hence no notice is still issued. On perusal of advance Copy Mr. Nagesh states that there is gross delay and the appeal is required to be dismissed at threshold. In view of the same the letter as undertaken by the Learned Counsel along with the HOD legal is required to be issued and this order be complied. 6. It is submitted that the Appellant had intentionally delayed in filing the present Appeal and is only seeking to delay the proceedings further. 7. It is submitted that the first Respondent is a bona fide purchaser and now cannot be fastened with the liabilities relating to pre-sale confirmation; that the Order dated 12.11.2020 passed by the Adjudicating Authority conforms with the Principles of Doctrine of clean slate; that it is a settled law that post Admission of the Liquidation, the Auction Purchaser is not liable to discharge the dues relating to the property. Once the sale is confirmed, prior dues of the Municipal Authorities are to be discharged by the Liquidator out of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant portion of the said email is reproduced as hereunder: The sale proceeds were insufficient even to meet the claims of the secured creditors. Since your claim has been raised as an operational creditor, so even after an assuming such claim to be in Order there is no amount left for the payment to any operational creditor and hence your claim has not been paid . 13. Having regard to the fact that the Appellant herein has already submitted his Claim in Form-B as an Operational Creditor when the Corporate Debtor Company was in Liquidation and the Liquidator has already distributed the proceeds as per Section 53 of the Code, the contention of the Learned Counsel for the Appellant that the dues raised prior to the Auction are liable to be paid by the Auction Purchaser, has to be examined on the touchstone of the ratio of the Hon ble Apex Court in the Judgement of Committee of Creditors Essar Steels Standard Chartered Bank Vs. Satish Kumar Gupta , 2019 SCC OnLine 388, in which it was held as follows: 107. For the same reason, the impugned NCLAT judgement [Standard Chartered Bank Vs. Satish Kumar Gupta, 2019 SCC OnLine 388] in holding that claims that may exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditor , though his claim was rejected. The principle of clean slate laid down in the Judgement of the Hon ble Apex Court in Committee of Creditors Essar Steels Standard Chartered Bank is applicable to the facts of this case, though it pertains to a successful Resolution Applicant. The scope and purpose of this Code and the ratio of the Judgement is to be interpreted in its truest sense, i.e., not to saddle the purchaser with any hydra head popping up. 16. We are of the considered view that once the Liquidation sale has been completed and the Certificate of Sale has been executed followed by handing over possession to the Auction Purchaser, any claim relating to such property for dues prior to the Auction cannot be raised against the Auction Purchaser specifically when the Company is in Liquidation and the dues were already claimed by the said party as an Operational Creditor , during the CIRP process as the Company was in Liquidation and the Appellant had already approached the Liquidator by filing a Form-B and the Liquidator has intimated to the Appellant that there is no amount left for the payment to any Operational Creditor , we are of the earnest view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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