TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether non-disposal of the intervention application before recording completion of the sale and liquidation process caused prejudice to the appellant; (ii) Whether the liquidator could sell the corporate debtor's leasehold and project rights, and the corporate debtor's legal entity, in liquidation despite the appellant's ownership and contractual rights under the BOT, lease and shareholders' arrangements.
Issue (i): Whether non-disposal of the intervention application before recording completion of the sale and liquidation process caused prejudice to the appellant.
Analysis: The intervention application sought participation, a copy of the sale application and a condition that transfer of leased land be subject to a board resolution; it did not seek cancellation of the completed sales, sale certificates or sale agreement. The sale-completion order was subject to pending litigation, and the intervention application was later withdrawn. In the absence of a contemporaneous challenge to the sale process or an effective substantive relief, recording completion of sale and liquidation was ministerial and caused no prejudice, though both applications ought preferably to have been disposed of together.
Conclusion: Non-disposal of the intervention application simultaneously with the sale-completion application did not prejudice the appellant; the finding is against the appellant.
Issue (ii): Whether the liquidator could sell the corporate debtor's leasehold and project rights, and the corporate debtor's legal entity, in liquidation despite the appellant's ownership and contractual rights under the BOT, lease and shareholders' arrangements.
Analysis: The concession, lease and shareholders' arrangements created a bundle of leasehold, operational and project rights in favour of the corporate debtor for the concession term. Although ownership of the land remained with the appellant, the corporate debtor's leasehold rights and rights to operate the project were assets capable of inclusion in the liquidation estate and sale by auction. The appellant had not terminated the contractual arrangements, and its creditor claims had already been rejected conclusively. Its equity contribution ranked last in the statutory distribution waterfall; the equity could not pass to the purchaser. The liquidation sale extinguished pre-existing liabilities consistently with the clean slate principle, while the purchaser acquired no superior rights and remained bound by the surviving BOT obligations, including remittance of the facility at the end of the stipulated term. No material irregularity, fraud or substantial undervaluation in the sale was established to warrant interference with the liquidator's commercial decision.
Conclusion: The sale of the corporate debtor's leasehold and project rights and its legal entity was valid, subject to preservation of the appellant's BOT rights; the finding is against the appellant.
Final Conclusion: The auction purchaser may exercise only the rights formerly vested in the corporate debtor, and remains bound to transfer the facility in accordance with the corporate debtor's BOT obligations at the end of the concession term.
Ratio Decidendi: Leasehold and contractual development or operational rights vested in a corporate debtor constitute liquidation assets capable of sale by the liquidator; a sale purchaser takes no better rights than the corporate debtor and remains bound by subsisting contractual obligations.
TaxTMI 
