2021 Supreme(Bom) 1006

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
K.K. Tated, R.I. Chagla, JJ.
Raman Roadways Private Limited - Appellant
Versus
State Of Maharashtra & Ors. - Respondents
Writ Petition (ST) No. 280 of 2021
Decided On : 06-04-2021

The provisions of the IBC have an overriding effect over other laws, including the MMVT Act, and that the claims against a corporate debtor in liquidation must be submitted to and decided by the Resolution Professional.

Headnote:

MOTOR VEHICLES ACT, 1988 - SECTION 50 - TRANSFER OF OWNERSHIP - INSOLVENCY AND BANKRUPTCY CODE, 2016 - SECTION 53 - DISTRIBUTION OF ASSETS - MAHARASHTRA MOTOR VEHICLES TAXATION ACT, 1997 - SECTION 8 - LIABILITY TO PAY TAX - LIQUIDATOR - POWER AND DUTIES - IBC - OVERRIDING EFFECT.

Fact of the Case:

Petitioner purchased 153 trucks ("Subject Vehicles") from the liquidator of a corporate debtor in an auction conducted under the Insolvency and Bankruptcy Code, 2016 ("IBC"). Respondent No. 3, the Regional Transport Officer, issued demand notices to the liquidator seeking payment of tax under the Maharashtra Motor Vehicles Taxation Act, 1997 ("MMVT Act") in respect of the Subject Vehicles. The Petitioner filed a petition under Article 226 of the Constitution of India seeking direction against the Respondents to transfer ownership of the Subject Vehicles in its favour and to quash and set aside the impugned tax demand notices.

Finding of the Court:

The Court held that the impugned demand notices issued by Respondent No. 3 claiming statutory dues against the Corporate Debtor in liquidation in respect of the Subject Vehicles prior to their date of their purchase cannot be claimed against the Petitioner as purchaser of the Subject Vehicles under the provisions of the MMVT Act. The Court further held that the statutory dues in respect of the Subject Vehicles which are claimed by the Respondent Nos.2 and 3 after the purchase of the Subject Vehicles in May, 2019, it would be appropriate to direct the Petitioner to make payment of the statutory dues from the date of purchase of the Subject Vehicles. This would be Subject to the outcome of the Application under Section 3 (3) of the MMVT Act.

Issues: 1. Whether the impugned demand notices issued by Respondent No. 3 claiming statutory dues against the Corporate Debtor in liquidation in respect of the Subject Vehicles prior to their date of their purchase can be claimed against the Petitioner as purchaser of the Subject Vehicles under the provisions of the MMVT Act? 2. Whether the statutory dues in respect of the Subject Vehicles which are claimed by the Respondent Nos.2 and 3 after the purchase of the Subject Vehicles in May, 2019, it would be appropriate to direct the Petitioner to make payment of the statutory dues from the date of purchase of the Subject Vehicles?

Ratio Decidendi: 1. The Court held that the impugned demand notices issued by Respondent No. 3 claiming statutory dues against the Corporate Debtor in liquidation in respect of the Subject Vehicles prior to their date of their purchase cannot be claimed against the Petitioner as purchaser of the Subject Vehicles under the provisions of the MMVT Act. The Court relied on the provisions of the IBC, which provide that the claims against a corporate debtor in liquidation must be submitted to and decided by the Resolution Professional, and that the provisions of the IBC have an overriding effect over other laws. 2. The Court further held that the statutory dues in respect of the Subject Vehicles which are claimed by the Respondent Nos.2 and 3 after the purchase of the Subject Vehicles in May, 2019, it would be appropriate to direct the Petitioner to make payment of the statutory dues from the date of purchase of the Subject Vehicles. This would be Subject to the outcome of the Application under Section 3 (3) of the MMVT Act.

Final Decision: The Court made the following order: a) Rule is made absolute in terms of prayer clauses (a) and (b), which read thus: (a) That by Writ of Mandamus and or by appropriate Writ, Direction and Order of similar nature, Your Lordships be pleased to direct the Respondents to transfer the ownership of the 153 Vehicles (List annexed at Exhibit "H") in favour or in name of Petitioner and further pleased to quash and set aside the impugned tax demand notices dated 16th June, 2020 & 19th June, 2020 issued by the Respondent No.3. (b) That by Writ of Mandamus and or by appropriate Writ, Direction and Order of similar nature, Your Lordships be pleased to direct the Respondents to allow Petitioner to approach local RTO office within whose jurisdiction the Vehicles are at a standstill for, physical verification, fitment of trolley wherever necessary and issuance of renewal of fitness certificate under Rule 62(1) of Central Motor Vehicles Rule and submit form No.38(A) in the office of Respondent No.3. b) The Petitioner shall pay the Respondent Nos.1 to 3 State, the 50% of statutory dues in respect of the Subject Vehicles purchased by the Petitioner from the date of their purchase. This will be Subject to the outcome of the Application made by the Petitioner for non-use of the Subject Vehicles under Section 3 (3) of the MMVT Act which is pending determination before Respondent Nos.2 and 3. i) Respondent Nos.1 to 3 State is directed to inform the Petitioner in writing the statutory dues in respect of the Subject Vehicles purchased by the Petitioner from the date of their purchase, on or before 17th April, 2021. d) If dues are informed in writing on or before 17th April, 2021, in that case Petitioner to make payment of 50% within two weeks from the date of communication. e) Respondent Nos.2 and 3 shall complete the hearing of the Application of the Petitioner under Section 3 (3) of the MMVT Act and communicate the order to the Petitioner within four weeks from the date of this order. f) Liberty granted to the Respondent Nos.1 to 3 State to move before Respondent No.4 for their dues by making appropriate Application as required by law. g) The Writ Petition is accordingly disposed of in the above terms with no order as to costs.