Liquidation sale transfers title free of past dues, and society cannot withhold NOC for pre-liquidation claims.

Pre-liquidation dues against the corporate debtor had to be pursued through the liquidation process, and could not be used to block transfer after a completed liquidation sale. The Tribunal held that disputes connected with the corporate debtor and liquidation fell within its jurisdiction, and that inconsistent claims under other laws yield to the insolvency regime. Accordingly, the society could not withhold NOC, assert a lien, or impose an encumbrance on the bona fide auction purchaser for unpaid past dues; the transfer of shares and issuance of NOC were directed, with the society left to file its claim in liquidation.

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Issues: (i) Whether the Tribunal had jurisdiction to direct transfer of the corporate debtor's shares and to require issuance of NOC in favour of the auction purchaser, notwithstanding the society's claim for past dues. (ii) Whether the society could refuse NOC and assert a lien or encumbrance against the auction purchaser for pre-liquidation dues not filed in the liquidation process.

Issue (i): Whether the Tribunal had jurisdiction to direct transfer of the corporate debtor's shares and to require issuance of NOC in favour of the auction purchaser, notwithstanding the society's claim for past dues.

Analysis: The property had been sold through liquidation proceedings after relinquishment of security interest and execution of a registered sale deed in favour of the successful bidder. The Tribunal held that disputes relating to the corporate debtor and the liquidation process fall within its jurisdiction, and that the provisions of the insolvency regime override inconsistent claims under other laws. The society's insistence on retaining leverage over the transfer on account of past dues could not defeat the completed transfer made through the insolvency process.

Conclusion: The issue was answered in favour of the liquidator and the auction purchaser; the Tribunal could direct transfer and grant of NOC.

Issue (ii): Whether the society could refuse NOC and assert a lien or encumbrance against the auction purchaser for pre-liquidation dues not filed in the liquidation process.

Analysis: The dues claimed by the society were pre-CIRP or pre-liquidation claims and were required to be submitted in the liquidation process. Once the property was sold to a bona fide auction purchaser, the society could not impose a lien, encumbrance, or condition upon issuance of NOC for its unpaid dues. Such dues had to be pursued through the insolvency waterfall and not from the third-party purchaser.

Conclusion: The issue was answered against the society and in favour of the liquidator and auction purchaser; the society could not withhold NOC or link it to past dues.

Final Conclusion: The application succeeded, and the society was directed to transfer the shares and issue the NOC while submitting its dues in the liquidation proceedings.

Ratio Decidendi: Pre-liquidation claims against the corporate debtor must be pursued through the insolvency liquidation mechanism, and a completed sale in liquidation confers title on the auction purchaser free from coercive linkage to such dues; inconsistent claims are overridden by the insolvency code.

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