Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 1956 – s.185 Companies (Court) Rules 1959 – r.338 – Madhya Pradesh Municipal Corporation Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Companies Act, 1956 (1 of 1956) Madhya Pradesh Municipal Corporation Act, 1956 (1 of 1956) |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Companies (Court) Rules, 1959 – r.338 – Madhya PradeshMunicipal Corporation Act, 1956 – s.185 – Post-liquidation liability,if Official Liquidator (OL) was obliged to discharge – Whether theclaims made by the respondent No.1-Nigam towards arrears ofproperty tax and water tax of the company in liquidation, pertainingto the post-liquidation period (from the date of order of winding upand until the date of confirmation of sale of assets to the auctionpurchaser), if admissible against the appellant-OL – Held: Yes – Inthe present case, as per the terms and conditions of the sale notice,the sale was on “as is where is whatever there is” basis – A furtherdisclaimer was also stated that the appellant-OL was not providingany guarantee as to the quality, quantity or specification of theassets sold – Such stipulations and disclaimers had definitely putthe purchasers to notice to get themselves acquainted with what theproperty is (the nature and extent); where it is (the locationalattributes); and whatever there is (its quantity and condition) –Bidders/purchasers were further warned to satisfy themselves inregard to the aspects of nature, extent, location etc. after physicalinspection of the assets and were also informed that they would bedeemed to offer with full knowledge as to defects, if any – However,the significant omission in those terms and conditions was to makeit obligatory on the bidder/purchaser to make himself aware aboutencumbrances, liens and claims attached to the assets in question –This omission strikes at the very root of the case of the appellant –Further, in the face of undeniable operation of s.185, M.P. Act,1956 over the property in question, the bidder/purchaser was entitledto proceed on the assumption that even if there were any arrears ofsuch taxes under the M.P. Act, 1956, the same would not berecoverable from him – Company Court and the High Court rightlyheld that the liability on account of the property tax and water taxclaimed by the respondent No. 1 to the extent rejected by the appellant-OL was a post-liquidation liability, which the OL wasobliged to discharge, in view of the omission in the sale notice andthen, in view of the operation of r.338, 1959 Rules – In absence ofany statutory provision, the auction purchaser without notice ofany charge could not be made liable for the arrears of tax in questionduring the post-liquidation period – Arrears of property tax andwater tax until the date of confirmation of sale would qualify as theexpenses for “preserving, realising or getting in” the assets of thecompany and thus, shall have to be paid in priority by the appellant-OL – View taken by the High Court calls for no interference –Companies Act, 1956 – ss. 529A, 530. |
Judge | Hon'ble Mr. Justice Dinesh Maheshwari |
Neutral Citation | 2023 INSC 489 |
Petitioner | Official Liquidator |
Respondent | Ujjain Nagar Palika Nigam & Ors |
SCR | [2023] 7 S.C.R. 1082 |
Judgement Date | 2023-05-04 |
Case Number | 8015 |
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