2021 (7) TMI 1010

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....on the respondent No. 2 and 3 to immediately grant a Trade License/Enlistment certificate in respect of Shyamnagar able Manufacturing Unit in favour of the applicant; d. An order, thereby, declaring that the applicant is not liable to make any payment to the respondent Municipality for past alleged dues accrued prior to the date of sale, i.e. October 8, 2020; e. Appropriate directions on the respondent No. 2 and 3 to issue necessary Mutation Form to enable the applicant to submit applications for its holding numbers and to grant mutation for the said holdings; f. An order, thereby, staying the purported demand notice; g. Ad-interim orders in terms of aforesaid orders; h. Costs" 2. The Applicant's case in brief is that:- 2.1. An order of liquidation was passed by this Adjudicating Authority on 17.10.2017 against Nicco Corporation Limited (NCL or Corporate Debtor) and Mr. Vinod Kumar Kothari, PCS was appointed as the liquidator. 2.2. The liquidator made public announcement on 23.10.2017 calling upon the stakeholders of the Corporate Debtor to submit their claims with the Liquidator. 2.3. On 23.09.2020, the liquidat....

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....plicant's request for grant of license as aforesaid, sent a notice demanding from the Applicant to immediately liquidate purported outstanding Municipal property tax against Holding Nos. 70, 71, 73, 74, E.G.P. Road, 27B, N.C. Road, 1 and 2 Uttarpara Road, amounting to Rs. 68,09,123.61. The claim of the Respondent Nos. 2 and 3 with respect to alleged outstanding Municipal property tax for the period from first quarter of 2015-16 to fourth quarter of 2020-21 under various purported Office Memo vide No. C-12/DR-1/4599 dated 11.12.2017 and C-12/DR-1/5060 dated 01.03.2018. A copy of the purported demand notice dated 01.02.2021 is annexed with application and marked with letter "L". 2.9. The claim of Respondent Nos. 2 and 3 is towards Municipal property tax for a period prior to the sale of the said Unit to the Applicant. The Applicant has no liability to pay such dues to the Municipality. The Municipality can only claim the purported amount from the Liquidator by submitting its proof of claim. 2.10. Further, the Municipality is not a secured creditor. The Municipal Tax does not create any charge as it is considered to be a personal liability. Therefore, Municipal t....

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....tion for mutation of a holding within the Municipality requires the entire payment of the arrear tax in respect of the said holding. 3.7. Before purchasing any property in a municipal area, there is a duty cast upon the person buying them to search the municipal record regarding arrear tax to be paid. 3.8. The Applicant purchased the said property knowing fully well that huge tax to the tune of Rs. 68,09,123.61 (Rupees sixty-eight lakhs nine thousand one hundred twenty-three and sixty one paise), is payable to Bhatpara Municipality in respect of the holdings purchased. The liquidator, Respondent No. 1, ought to have ascertained the debts of the Corporate Debtor before selling the said property. In any event as per mandate of section 55 of the Transfer of Property Act, the Applicant cannot deny the payment of the arrear municipal tax in respect of the holdings purchased by them. 3.9. The Applicant is liable for payment of outstanding tax receivable by the Municipality in respect of the holdings situated within the Bhatpara Municipality. The Municipality all along gave service to the holdings by giving wholesome water, cleaning of sewerage and removal of ga....

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....ed by the Corporate Debtor situated at 71, East Ghoshpara Road, Athpur, District-North 24 Pargana at the price of Rs. 23,33,00,000/- out of the liquidation estate of the Corporate Debtor. The liquidator has also handed over the possession of the said unit to the Applicant on 09.10.2020. 7. In order to make the unit functional, the Applicant applied to Respondent No. 2 for Trade Licence. However, instead of considering the application, Respondent No. 3 sent a notice demanding the outstanding Municipal property tax against Holding Nos. 70, 71, 73, 74, situated at E.G.P. Road, 27B, N.C. Road, 1 and 2 Uttarpara Road, amounting to Rs. 68,09,123.61. 8. The ground taken by the Respondents 2 and 3 is that the Applicant and the liquidator should have exercised their duties under section 55 of the Transfer of Property Act, 1882. And that the Respondents 2 and 3 are bound by the municipality by section 118 of the West Bengal Municipal Act and Audit and Accounts Rules, 1999 under which they cannot issue enlistment certificate unless all the tax dues are paid. 9. The Insolvency and Bankruptcy Code, 2016 is a self contained legislation. In cases of liquidation, through chapter III read ....