Liquidation

Whether Successful Bidder, who has purchased the property pursuant to Liquidation auction is liable to pay the electricity dues of the property? | Whether NOC regarding charge on assets of Corporate Debtor would result in relinquishment of the secured interest in terms of section 52(1)(a) of the IBC? – Harsh Kumar Vs. The Assistant Engineer, Electrical Sub Division, Himachal Pradesh State Electricity Board Ltd. and Ors. – NCLT Chandigarh Bench

Hon’ble NCLT Chandigarh Bench held that:

(i) In the e-auction documents, it was clearly mentioned that the properties i.e. Land and Building, and Plant and Machinery being sold by the Liquidator are on “AS IS WHERE IS BASIS”, “AS IS WHAT IS BASIS”, “WHATEVER THERE IS BASIS” and “NO RECOURSE BASIS”, the Successful Bidder would be liable to pay the arrears of the electricity dues.
(ii) Once the claim of electricity dues has been admitted by the Liquidator, no subsequent impediments can be imposed by the liquidator. However, Electricity Company has given NoC to the Liquidator, this would result in relinquishment of the secured interest of Electricity Company in the liquidation estate in terms of section 52(1)(a) of the IBC.

Whether Successful Bidder, who has purchased the property pursuant to Liquidation auction is liable to pay the electricity dues of the property? | Whether NOC regarding charge on assets of Corporate Debtor would result in relinquishment of the secured interest in terms of section 52(1)(a) of the IBC? – Harsh Kumar Vs. The Assistant Engineer, Electrical Sub Division, Himachal Pradesh State Electricity Board Ltd. and Ors. – NCLT Chandigarh Bench Read Post »

When Lessor was not in receipt of rent on CIRP commencement date and Arbitral Award was still under execution, the lease rental subsequent to the commencement of the CIRP cannot be treated as CIRP cost under CIRP Regulation 31(b) | This case does not fall under Section 14(1)(d) of the IBC, rather it is covered by Section 14(1)(a) – Mr. A. Guhan and Anr. Vs. Ms. Sunita Umesh Liquidator, Deltronix India Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) On the date when CIRP commenced, Appellant was not receiving any rent from the Corporate Debtor and claim of rent/damages and possession of the assets was under consideration in the Execution Proceedings.
(ii) After enforcement of Moratorium under Section 14 by virtue of Section 14(1)(a) the Appellant could not have prosecuted the Execution Proceeding against the Corporate Debtor. When the Appellant could not have proceeded with the execution of Arbitral Award, there was no occasion to recover the rent and assets from the Corporate Debtor.
(iii) The claim of Appellant as per Arbitral Award to receive damages and occupation from Corporate Debtor cannot be treated as Insolvency Resolution Process cost under Section 31(b).
(iv) The fact that plant and machineries are attached/available at the site cannot be read to mean that the premises were being used as a going concern by Corporate Debtor
(v) In the present case, when the Appellant was not in receipt of rent from December 2014, and Arbitral Award obtained by the Appellant was still under execution, the lease rental subsequent to the commencement of the CIRP cannot be treated as CIRP cost.

When Lessor was not in receipt of rent on CIRP commencement date and Arbitral Award was still under execution, the lease rental subsequent to the commencement of the CIRP cannot be treated as CIRP cost under CIRP Regulation 31(b) | This case does not fall under Section 14(1)(d) of the IBC, rather it is covered by Section 14(1)(a) – Mr. A. Guhan and Anr. Vs. Ms. Sunita Umesh Liquidator, Deltronix India Ltd. – NCLAT New Delhi Read Post »

A purchaser backing out from the transaction the consequences as available in law have to followed and take recourse – Kuldeep Verma Vs. Government of Kerala and Ors. – NCLAT New Delhi

The liquidator proposed sale of the shares of subsidiary company to Govt. of Keral which was approved by NCLT. However, Govt. of Kerala backed out from the purchase of the shares.

Hon’ble NCLAT held that a purchaser backing out from the transaction the consequences as available in law have to followed and take recourse, but no direction could be issued to compel the State to purchase the share.

A purchaser backing out from the transaction the consequences as available in law have to followed and take recourse – Kuldeep Verma Vs. Government of Kerala and Ors. – NCLAT New Delhi Read Post »

Any claims filed on the basis of EPFO Assessment subsequent to the date of Liquidation could not have been entertained in the Liquidation Proceeding of the Corporate Debtor – Employees Provident Fund Organisation Vs. Chandra Prakash Jain Liquidator of Mekastar Engineering Ltd. – NCLAT New Delhi

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Any claims filed on the basis of EPFO Assessment subsequent to the date of Liquidation could not have been entertained in the Liquidation Proceeding of the Corporate Debtor – Employees Provident Fund Organisation Vs. Chandra Prakash Jain Liquidator of Mekastar Engineering Ltd. – NCLAT New Delhi Read Post »

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