Liability to pay Pre-CIRP dues cannot be fastened on Successful Bidder simply because the assets was purchased in auction on “as is where is” and “as is what is basis” – Square Port Shipyard Pvt. Ltd. Vs. Mr. Vijaykumar Iyer and Others – NCLT Mumbai Bench
January 9, 2024
Hon’ble NCLT Mumbai Bench held that: (i) The dispute is arising from non-payment of Pre-CIRP dues, this arises from the insolvency of the Corporate Debtor, hence vests the power in this Tribunal to decide on this issue and provide protection to the successful buyer from he obstruction caused due to non-payment of Pre-CIRP dues. (ii) It is trite law that the auction purchaser gets the assets on “as is where is” and “as is what is” basis and such assets have to be free from all obligations or encumbrances, unless otherwise made part of the bidding document. Accordingly, the liability to pay Pre-CIRP dues can not be fastened on the Applicant simply because the Dabhol Shipyard was purchased in auction on “as is where is” and “as is what is basis”.