06/09/2022

Whether the Successful Bidder in an Auction conducted on as is where is basis is liable to pay prior dues attached to such Auction property, when the Company is in Liquidation and the dues were claimed under Operational Debt before the Liquidator? – Haryana State Industrial and Infrastructure Development Corporation Ltd. Vs. M/s. AAR AAR Technoplast Pvt. Ltd. – NCLAT New Delhi

NCLAT concluded that 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 Auction Purchaser cannot be made liable for any dues arising on the property before the purchase of the said property in this case.

Whether the Successful Bidder in an Auction conducted on as is where is basis is liable to pay prior dues attached to such Auction property, when the Company is in Liquidation and the dues were claimed under Operational Debt before the Liquidator? – Haryana State Industrial and Infrastructure Development Corporation Ltd. Vs. M/s. AAR AAR Technoplast Pvt. Ltd. – NCLAT New Delhi Read Post »

Under Section 53(1)(b)(ii) of IBC, the debts owed to a secured creditor, which would include the State under the Gujarat Value Added Tax, 2003, are to rank equally with other specified debts including debts on account of workman’s dues for a period of 24 months preceding the liquidation commencement date – State Tax Officer (1) Vs. Rainbow Papers Ltd. – Supreme Court

Summary of the decision of Hon’ble Supreme Court in the following points:
A. Time lines stipulated in the IBC even for completion of proceedings are directory and not mandatory
B. Amendment in Regulation 12 of CIRP Regulations, 2016
C. Claim time period under CIRP Regulation 12 is not mandatory but only directory?
D. Approval of a Resolution Plan by the Adjudicating Authority
E. Section 31(2) uses the expression “may” and Resolution Plan Rejection
F. Statutory charge in terms of the GVAT Act squarely falls within the definition of “Security Interest”
G. Priority of statutory dues to the Government and/or other authorities under IBC
H. Decision

Under Section 53(1)(b)(ii) of IBC, the debts owed to a secured creditor, which would include the State under the Gujarat Value Added Tax, 2003, are to rank equally with other specified debts including debts on account of workman’s dues for a period of 24 months preceding the liquidation commencement date – State Tax Officer (1) Vs. Rainbow Papers Ltd. – Supreme Court Read Post »

Financial Creditor can proceed against the Guarantor without first suing the Principal Borrower – K. Paramasivam Vs. The Karur Vysya Bank Ltd. & Anr. – Supreme Court

The Hon’ble Supreme Court held that the issues raised in this appeal are settled by this Court in Laxmi Pat Surana (2021) ibclaw.in 53 SC. As held by this Court in Laxmi Pat Surana (supra), the liability of the guarantor is co-extensive with that of the Principal Borrower. The judgment in Laxmi Pat Surana (supra), rendered by a three-Judge Bench of this Court is binding on this Bench. It was open to the Financial Creditor to proceed against the guarantor without first suing the Principal Borrower. We find no ground to interfere with the concurrent findings of the Adjudicating Authority (NCLT) and the Appellate Authority (NCLAT).

Financial Creditor can proceed against the Guarantor without first suing the Principal Borrower – K. Paramasivam Vs. The Karur Vysya Bank Ltd. & Anr. – Supreme Court Read Post »

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