Whether the sale of the Corporate Debtor as a going concern under the IBC and the Regulations includes both assets and liabilities or assets alone without any liabilities? – Gaurav Agarwal Vs. CA Devang P Sampat, Liquidator – NCLT Mumbai Bench
July 4, 2022
The present Applicant being an auction purchaser who purchased the Corporate Debtor Company as a going concern is not bound by any of its liabilities. The issue whether the sale of the Corporate Debtor as a going concern includes assets and liabilities or assets alone is no longer res-integra. It referred judgment of the Hon’ble NCLAT in M/s Visisth Services Ltd. (2022) ibclaw.in 33 NCLAT, in the similar circumstances of the present case on hand. Similarly, the coordinate bench of NCLAT, Chennai Bench in M.S. Viswanathan (2022) ibclaw.in 33 NCLAT by relying on the above judgement of the Hon’ble NCLAT in M/s Visisth Services Limited clearly held that the Sale of Corporate Debtor as a Going Concern ‘as is where is’ basis under Regulation 32A and the Code means sale of assets as well as liabilities and not assets sans liabilities. However, the learned counsel appearing for the Petitioner relied on the judgment of the Hon’ble NCLAT in M/s Shiv Shakti Inter Globe Exports (2022) ibclaw.in 192 NCLAT which is later in point of time and argued that as per the judgment in M/s Shiv Shakti Inter Globe Exports, the sale does not include liabilities and the above decision being the later decision will prevail over the earlier decision. Therefore, the only issue is which judgement of the Hon’ble NCLAT is a ratio.
