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Positron Biogenics Wins Refund: NCLT Says Cannot Claim From Auction Purchaser
The has delivered a significant ruling in favour of auction purchasers in insolvency cases, holding that of a cannot be recovered from the buyer merely because the property was sold on an "" basis. The tribunal ordered ) to refund over ₹82.53 lakh by , the successful bidder for leasehold assets of .
Case Background
was admitted into liquidation on
. The liquidator conducted an
on
, for the sale of three parcels of land at Panki Industrial Area, Kanpur. Positron Biogenics emerged as the highest bidder, paying the full sale consideration of ₹26.73 crore. A
was issued on
, on an
"
,
,
,"
and possession was handed over on
. However, when Positron applied for transfer of the leasehold title,
demanded ₹82,53,013.37 towards maintenance charges and interest for the period from 2000 to 2009, when L.M.L. was the lessee. Positron paid the amount under protest to avoid further delays to its pharmaceutical project and filed an application before the NCLT seeking refund.
Arguments Presented
Positron contended that the dues were of L.M.L. and should be dealt with through the liquidation process under . It argued that as a , it could not be saddled with the 's past debts. , on the other hand, relied on the "" clause and an executed by Positron to argue that the purchaser had accepted the liability. The liquidator submitted that 's claim of ₹2.77 crore had already been admitted and would be distributed according to the .
Legal Analysis
The NCLT examined the terms of the process document and the certificate of sale. It noted that while the documents required due diligence regarding "claims/rights/dues affecting the asset," they did not expressly make the purchaser liable for pre-CIRP debts. The tribunal observed that the was transferred, not the 's liabilities. Crucially, it found that had already lodged its claim in the , which had been admitted in full. The tribunal distinguished between the transfer of the asset and the assumption of past liabilities, holding that the "" condition could not convert a pre-CIRP liability into the purchaser's personal obligation. Relying on the 's decision in , the tribunal stated that outstanding dues relating to the period before confirmation of a must be dealt with under and cannot be recovered from the auction purchaser.
Key Observations
The tribunal observed:
"In view of the above, the mere '
' condition or the subsequent transfer of the
cannot convert the pre-CIRP liability of the
into an independent personal liability of the Applicant."
It further noted that the interest and other charges were consequential upon the 's failure to pay maintenance charges between 2000 and 2009, and thus remained . The court also highlighted that the affidavit and furnished by Positron were given in the context of the and could not be treated as an independent undertaking to pay those liabilities.
Court's Decision
The NCLT allowed the application and directed to refund ₹82,53,013.53 to Positron Biogenics within a reasonable period. The tribunal clarified that remained entitled to receive its from the in accordance with Section 53, as the liquidator had already recorded that distribution was ongoing. The ruling reinforces the principle that auction purchasers in liquidation sales are not liable for of the , and such claims must be pursued through the .
