Auction purchasers are liable for outstanding property tax under statutory first charge, with obligations for pre-acquisition dues as part of 'as is where is' sale terms.

JUDGMENT :

GAURANG KANTH, J.

1. The Petitioner has preferred the present writ petition seeking an order, inter alia, for quashing and/or setting aside the demands raised by the Respondent No. 3 towards outstanding property tax together with interest and penalty, as communicated vide four separate letters, all dated 18.11.2014; and for issuance of an appropriate direction upon the

2. The facts leading to the present writ petition are as follows:

3. On 18.02.2018, the Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal, Kolkata Bench (hereinafter referred to as “NCLT, Kolkata”) against M/s Enfield Apparels Ltd. seeking initiation of the Corporate Insolvency Resolution Process (CIRP), as the said company had defaulted in repayment of its debts amounting to Rs.42,40,76,787.43/-. By order dated 06.08.2018, the NCLT, Kolkata appointed Mr. Kanchan Dutta as the Resolution Professional. Since no resolution plan was received for the revival of M/s Enfield Apparels Ltd., the NCLT, Kolkata, vide order dated 04.04.2019, directed the liquidation of the company and appointed Mr. Kanchan Dutta as the Liquidator.

4. In May 2019, the Liquidator issued e-auction sale notices in leading newspapers for the sale of certain assets of M/s Enfield Apparels Ltd., namely, the factory premises comprising four modules of 11,302 sq. ft. each (totaling 45,208 sq. ft.), six open car parking spaces, and the plant and machinery situated at Paridhan Garment Park.

5. Although the Petitioners intended to acquire the said property and participate in the e-auction process, certain irregularities prevented their participation. The e-auction was conducted on 11.06.2019, and the sale was confirmed in favour of the sole bidder, M/s Vedant Fashions Limited.

6. Petitioner No. 1 challenged the said auction before the NCLT, Kolkata. By orders dated 24.02.2020 and 12.03.2020, the NCLT, Kolkata set aside the earlier auction sale and confirmed the sale in favour of Petitioner No. 1 for a bid price of Rs. 15.50 Crores.

7. Subsequent litigation ensued between the Liquidator and the Petitioners regarding the liability to pay transfer fees to the Lessor, i.e, West Bengal Industrial Development Corporation Ltd (WBIDC) before the NCLT, Kolkata and the NCLAT, New Delhi.

8. Vide order dated 13.10.2020 in IA (IB) No.782/KB/2020 in CP(IB)No. 338/KB/2018, the NCLT permitted Petitioners No. 2 to 5 to complete the sale transaction jointly with Petitioner No. 1.

9. Upon payment of the sale consideration and the transfer fee, possession of the subject property was handed over to the Petitioners on 19.01.2022. Thereafter, by four separate Deeds of Assignment, all executed on 07.05.2022, the leasehold rights in the factory premises were transferred in favour of Petitioners No. 1 to 5 as follows:

a) By Deed of Assignment dated 07.05.2022, Factory Module A-202 along with car parking spaces Nos. 96 and 97 was transferred to Petitioner No. 1.

b) By Deed of Assignment dated 07.05.2022, Factory Module A-301 along with car parking space No. 98 was transferred to Petitioner No. 2.

c) By Deed of Assignment dated 07.05.2022, Factory Module A-201 along with car parking spaces Nos. 94 and 95 was transferred to Petitioner No. 3.

d) By Deed of Assignment dated 07.05.2022, Factory Module A-302 along with car parking space No. 99 was transferred jointly to Petitioners No. 4 and 5.

10. Following the execution of the aforesaid