Tribunal Upholds Transfer Fee Payment Obligation, Rejects Appellant's Arguments

The Tribunal dismissed the Appeal, affirming the Appellant's liability to pay the transfer fee demanded by WBIDC. The Tribunal rejected arguments on the involuntary sale nature, EOI interpretation, and upheld prior orders directing payment. The Appellant's commitment to pay transfer charges further solidified the obligation. The Contempt Case (AT) No.17 of 2021 was closed without costs.

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Issues Involved:
1. Liability of transfer fee in liquidation proceedings.
2. Interpretation of the Invitation for Expression of Interest regarding transfer fee.
3. Applicability of prior orders directing payment of transfer fee.
4. Appellant's commitment to pay transfer charges.

Detailed Analysis:

1. Liability of Transfer Fee in Liquidation Proceedings:

The primary issue addressed was whether the Appellant was liable to pay the transfer fee as demanded by the West Bengal Industrial Development Corporation Limited (WBIDC). The Appellant argued that the sale by the Liquidator was involuntary, and thus, no transfer fee was payable. The Appellant cited various judgments, including the Calcutta High Court's decision in Krishna Das Nandy v. Bidhan Chandra Roy, which held that sales by Liquidators in compulsory winding-up proceedings were involuntary and akin to sales by the court. However, the Tribunal found that the sale by the Liquidator under the Insolvency and Bankruptcy Code (IBC) is considered a sale on behalf of the Corporate Debtor and not an involuntary sale. This conclusion was supported by the Supreme Court's judgments in M/s Parasram Harnand Rao vs. M/s Shanti Parsad Narinder Kumar Jain and Anr., and Cox & Kings Ltd. vs. Chander Malhotra, which held that such sales are voluntary and fall within the scope of applicable transfer fee provisions.

2. Interpretation of the Invitation for Expression of Interest Regarding Transfer Fee:

The Appellant contended that the Invitation for Expression of Interest (EOI) issued by the Liquidator did not explicitly mention the transfer fee under Clause 7.1.12. This clause stated that the purchaser shall bear and pay applicable stamp duties, registration fees, and all other duties payable in connection with the purchase of Sale Assets. The Tribunal interpreted this clause in a business-efficient manner, concluding that "all other duties payable" included the transfer fee. Additionally, the sub-lease deed executed in favor of the Corporate Debtor by WBIDC contained Clause 12.28, which explicitly required the payment of a 10% transfer fee of the prevailing market value.

3. Applicability of Prior Orders Directing Payment of Transfer Fee:

The Tribunal examined prior orders dated 23rd June 2020 and 29th July 2020, where the Adjudicating Authority had directed the Appellant to pay the transfer fee. The Appellant had sought to modify these orders but was unsuccessful. As the Appellant did not challenge these orders, the Tribunal held that the Appellant was bound by the principles of res judicata and could not contest the transfer fee liability again.

4. Appellant's Commitment to Pay Transfer Charges:

The Tribunal noted a letter dated 26th June 2019, wherein the Appellant expressly promised to follow all auction conditions and agreed to pay the transfer charges to WBIDC. This commitment further reinforced the Appellant's obligation to pay the transfer fee, as stated in the letter.

Conclusion:

The Tribunal dismissed the Appeal, affirming that the Appellant was liable to pay the transfer fee as demanded by WBIDC. The Appellant's arguments regarding the involuntary nature of the sale and the interpretation of the EOI were rejected. The prior orders of the Adjudicating Authority and the Appellant's own commitment to pay the transfer charges were decisive in the Tribunal's judgment. The Contempt Case (AT) No.17 of 2021 was also closed with no order as to costs.

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