LexOFFICIAL LIQUIDATOR versus UJJAIN NAGAR PALIKA NIGAM & ORS
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A B C D E F G H 1082 SUPREME COURT REPORTS [2023] 7 S.C.R. OFFICIAL LIQUIDATOR v. UJJAIN NAGAR PALIKA NIGAM & ORS. (Civil Appeal No. 8015 of 2010) MAY 04, 2023 [DINESH MAHESHWARI AND ANIRUDDHA BOSE, JJ.] Companies (Court) Rules, 1959 – r.338 – Madhya Pradesh Municipal Corporation Act, 1956 – s.185 – Post-liquidation liability, if Official Liquidator (OL) was obliged to discharge – Whether the claims made by the respondent No.1-Nigam towards arrears of property tax and water tax of the company in liquidation, pertaining to the post-liquidation period (from the date of order of winding up and until the date of confirmation of sale of assets to the auction purchaser), if admissible against the appellant-OL – Held: Yes – In the 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 further disclaimer was also stated that the appellant-OL was not providing any guarantee as to the quality, quantity or specification of the assets sold – Such stipulations and disclaimers had definitely put the purchasers to notice to get themselves acquainted with what the property is (the nature and extent); where it is (the locational attributes); and whatever there is (its quantity and condition) – Bidders/purchasers were further warned to satisfy themselves in regard to the aspects of nature, extent, location etc. after physical inspection of the assets and were also informed that they would be deemed to offer with full knowledge as to defects, if any – However, the significant omission in those terms and conditions was to make it obligatory on the bidder/purchaser to make himself aware about encumbrances, 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 entitled to proceed on the assumption that even if there were any arrears of such taxes under the M.P. Act, 1956, the same would not be recoverable from him – Company Court and the High Court rightly held that the liability on account of the property tax and water tax claimed by the respondent No. 1 to the extent rejected by the [2023] 7 S.C.R. 1082 1082 A B C D E F G H 1083 appellant-OL was a post-liquidation liability, which the OL was obliged to discharge, in view of the omission in the sale notice and then, in view of the operation of r.338, 1959 Rules – In absence of any statutory provision, the auction purchaser without notice of any charge could not be made liable for the arrears of tax in question during the post-liquidation period – Arrears of property tax and water tax until the date of confirmation of sale would qualify as the expenses for “preserving, realising or getting in” the assets of the company 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. United Bank of India v. Official Liquidator and Ors. (1994) 1 SCC 575 : [1993] 3 Suppl. SCR 1; Haryana Financial Corporation v. Rajesh Gupta (2010) 1 SCC 655 : [2009] 16 SCR 456 – distinguished. UT Chandigarh Administration and Anr. v. Amerjeet Singh and Ors. (2009) 4 SCC 660 : [2009] 4 SCR 541; Punjab Urban Planning and Development Authority v. Raghu Nath Gupta (2012) 8 SCC 197 : [2012] 8 SCR 118 – held inapplicable. Ahmedabad Municipal Corporation v. Haji Abdul Gafur Haji Hussenbhai (1971) 1 SCC 757; AI Champdany Ltd. v. Official Liquidator and Anr. (2009) 4 SCC 486 : [2009] 2 SCR 705 – relied on. Municipal Board, Cawnpore v. Roop Chand Jain and Anr. AIR 1940 All 456 – referred to. Delhi Development Authority v. Kenneth Builders and Developers Pvt. Ltd. and Ors. (2016) 13 SCC 561: [2016] 3 SCR 1126 – referred to. In re Toshoku Finance UK plc : [2002] 1 WLR 671; In re Toshoku Finance UK plc – referred to. Case Law Reference [1993] 3 Suppl. SCR 1 distinguished para 8.3 [2009] 16 SCR 456 distinguished para 9 [2009] 4 SCR 541 held inapplicable para 9 OFFICIAL LIQUIDATOR v. UJJAIN NAGAR PALIKA NIGAM & ORS. A B C D E F G H 1084 SUPREME COURT REPORTS [2023] 7 S.C.R. [2012] 8 SCR 118 held inapplicable para 9 (1971) 1 SCC 757 relied on para 10 [2009] 2 SCR 705 relied on para 12.3 [2016] 3 SCR 1126 referred to para 12.5 CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8015 of 2010. From the Judgment and Order dated 05.02.2009 of the High Court of Calcutta in ACO
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