Liquidator granted vacant possession after respondent fails to settle dues despite extensions under Section 33

The NCLAT Principal Bench disposed of a liquidator's application seeking directions for vacant possession of immovable property from the respondent. The Tribunal had previously allowed the respondent time to settle statutory creditor dues with a positive approach, granting two extensions. However, the respondent failed to submit responsive settlement proposals and instead filed an appeal before CESTAT, attempting to dispute rather than clear claims. The Tribunal held this defeated IBC objectives of timely completion, noting liquidation processes are time-bound within one year and already delayed in this case, finding no cogent reasons for further extensions.

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Issues Involved:
1. Compliance with Tribunal's Order and Undertaking.
2. Settlement Proposal Submission and Acceptance.
3. Liquidation Process and Delay.
4. Validity of GST Department's Claim.

Summary:

1. Compliance with Tribunal's Order and Undertaking:
The application was filed under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016, by the Liquidator seeking directions for the Respondent to hand over the vacant possession of the immovable property (subject property) due to willful disobedience of the Tribunal's order dated 21.04.2023 and breach of undertaking dated 20.05.2023.

2. Settlement Proposal Submission and Acceptance:
The Tribunal had allowed the Respondent to submit a full and final settlement proposal within a stringent timeframe, initially set for two weeks. The Respondent failed to meet this deadline and requested extensions, which were granted with clear stipulations that no further extensions would be entertained. Despite submitting a settlement proposal, the GST Department did not accept it, leading to the Liquidator's request for the Respondent to vacate the subject property.

3. Liquidation Process and Delay:
The Liquidator contended that the Respondent was willfully disobeying orders and delaying the liquidation process, which is detrimental to the interests of the Corporate Debtor and statutory creditors. The Tribunal emphasized that proceedings under IBC are strictly time-bound, and the Respondent's conduct was seen as an attempt to derail the liquidation process by filing an appeal instead of settling the claims.

4. Validity of GST Department's Claim:
The Respondent argued that the GST Department's claim should be considered invalid due to a pending appeal before the CESTAT and the mandatory pre-deposit of 7.5% of the principal amount. The Tribunal found this contention mis-conceived, stating that pre-deposit for filing an appeal is not payment of duty, and the claim of the GST Department cannot be viewed as extinguished.

Conclusion:
The Tribunal reiterated that the Liquidator should proceed with the liquidation process as the GST Department did not accept the settlement proposal. The Respondent was directed to vacate the subject property within seven days from the date of the order. The Liquidator was also instructed to claim fees and expenses and make provisions for the pre-deposit amount in respect of the CESTAT appeal. The I.A. was disposed of with these observations.

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