LiquSale-Auction Sale-Duties of a Purchaser in Auction Sale

Whether Successful Auction Purchaser is entitled interest on sale consideration, in case delay in issuance of Sale Certificate by Liquidator – Gokul Agro Resources Ltd. Vs. Mr. Supriyo Kumar Chaudhuri Liquidator of JVL Agro Industries Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that the present is a case where assets have been handed over to the Appellant. Present is not a case where due to any reason, the Appellant is entitled for refund of sale consideration. In event the Appellant may be entitled for refund of sale consideration the prayer for refund of the sale consideration along with interest could have been considered. But, here the sale consideration, which was deposited and which has earned interest is in lieu of the assets, which have been ultimately sold to the Appellant and handed over to him. There is no merit in the submission of the Appellant that Liquidator should be directed to make payment of interest on the sale consideration, which was deposited by the Appellant due to delay in handing over of assets to the Appellant, which assets could not be handed over earlier due to restraint order of the Adjudicating Authority dated 04.04.2022, which could be vacated only on 01.06.2023.

Whether Successful Auction Purchaser is entitled interest on sale consideration, in case delay in issuance of Sale Certificate by Liquidator – Gokul Agro Resources Ltd. Vs. Mr. Supriyo Kumar Chaudhuri Liquidator of JVL Agro Industries Ltd. – NCLAT New Delhi Read Post »

It is for intending purchaser to satisfy himself in all respects as to the title and encumbrances and so forth of the immovable property that he proposes to purchase – Mr. Paramjit Gandhi Vs. Mr. Ashwini Mehra, Chairman, Monitoring Committee, Educomp Infrastructure & School Management Ltd. – NCLT Chandigarh Bench

The Adjudicating Authority held that in the case at hand, when informed about the encroachment on the properties by the Successful Resolution Applicant, the Monitoring Committee consciously refused to write letters to the Revenue Authorities to prevent such encroachment there by abetting an act which will greatly diminish the value of the assets of the corporate debtor. In the course of the present proceedings, nothing has been brought on record to suggest that the RP and subsequently the Monitoring Committee took any step to protect the property of the Corporate Debtor from encroachment. It is observed that the official liquidator cannot and does not hold any guarantee or warranty in respect of the property sold. That is because the official liquidator proceeds on the basis of what the records of the company in liquidation show. Thus, it is for the intending purchaser to satisfy himself in all respects as to the title and encumbrances and so forth of the immovable property that he proposes to purchase.

It is for intending purchaser to satisfy himself in all respects as to the title and encumbrances and so forth of the immovable property that he proposes to purchase – Mr. Paramjit Gandhi Vs. Mr. Ashwini Mehra, Chairman, Monitoring Committee, Educomp Infrastructure & School Management Ltd. – NCLT Chandigarh Bench Read Post »

Merely because the petitioner is a bonafide auction purchaser who had purchased assets of Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon – Palika Towns LLP Vs. State of UP and 2 others – Allahabad High Court

Hon’ble High Court of Allahabad held that (i) Merely because the petitioner is a bonafide auction purchaser who had purchased assets Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon. (ii) The Insolvency Bankruptcy Code, 2016 grants limited protection to the petitioner (auction purchaser) while allowing it to step into the shoes of the Corporate Debtor but in order to the lessee of the principle lessor (GNIDA) the petitioner has to honor the commitments and discharge its contractual obligation as embodied in the lease deeds, Transfer Memorandum and Sale Certificate. (iii) The words so employed in the Certificate of Sale Deed being “AS IS WHERE IS”, ”AS IS WHAT IS”, “WHATEVER THERE IS” AND “NO RECOURSE” itself creates contractual obligation upon the petitioner to honor the commitments and to discharge the obligations so embodied in the lease and the subsequent lease deeds for the payment of past lease rentals and interest thereon. (iv) The principal lessor has paramount interest over the demised land put to auction and it has legal as well as contractual right to raise demand of out standing arrears of lease rentals and interest thereon. (v) High Court under Article 226 of the Constitution of India cannot by a judicial fiat creates a podium to facilitate avoidance of agreements while wriggling out from contractual obligations so embodied therein. A writ petition containing solitary relief of refund of the amount deposited for fulfilling contractual obligation, is not maintainable.

Merely because the petitioner is a bonafide auction purchaser who had purchased assets of Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon – Palika Towns LLP Vs. State of UP and 2 others – Allahabad High Court Read Post »

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