TaxTMI 
TaxTMI 
2021 (12) TMI 740
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....eferred to as the 'IBC') has been filed against judgment order dated 2nd February, 2021 passed in IA(IB) 1079/KB/2020 in Company Petition (IB) No.338/KB/2018. Brief facts necessary to be noted for deciding this Appeal are : (i) Liquidation proceedings against Corporate Debtor, Enfield Apparels Limited was initiated under the IBC. (ii) Invitation for Expression of Interest for acquisition of Corporate Debtor was published by the Corporate Debtor on 24th May, 2019. (iii) E-Auction was held on 11th June, 2019 in which the appellant could not participate. (iv) A letter dated 26th June, 2019 was written by the Appellant to the Liquidator, requesting for purchase of one of the four modules at prevailing bid value. (v) An application was filed by the Appellant before the Adjudicating Authority for cancelling the E-Auction held on 11th June, 2019 (vi) Appellate made an offer to pay Rs. 15.50 crores as compared to the auction price of Rs. 14.37 crores. (vii) The Adjudicating Authority passed an order dated 24th February, 2020 directing the Appellant to deposit 25% of the proposed bid amount. (viii) By subsequent order d....
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....bmits that Adjudicating Authority has wrongly assumed that Appellant is claiming for any waiver of transfer fee, whereas this was not the case for any claim of waiver. Shri Banerji submits that transfer of fee could have been charged only when it was voluntary transfer, but since the transfer in the present case is by operation of law, there is no liability to pay transfer fee by the Appellant. He further submits that in the Invitation for Expression of Interest issued by Liquidator on 24th May, 2019 under Clause 7.1.12, although stamp duties, registration fees and all fees and expenses payable for registration are mentioned therein, but there is no mention of transfer fee and hence, there is no liability on the Appellant to pay the transfer fee. 4. Shri Jayant Mehta, learned Senior Counsel appearing for Respondent No.2 submits that the Appellant is liable to pay transfer fee. Shri Mehta refers to letter dated 26th June, 2019 written by the Appellant to the Liquidator, where he prayed that he may be permitted to bid and he has undertaken to pay transfer fee. Shri Mehta further submits that under Clause 12.28 of sub-lease Deed there is a clear mention of payment of 10% of transfe....
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....iso to Section 13 of West Bengal Rent Control Act, 1950. The question which arose in the above case was as to whether the tenant i.e. the Company has transferred the Company within the meaning of proviso (a). In the above case in liquidation proceeding the defendant has purchased the tenancy through public auction. The Calcutta High Court in the above case held that in winding up, the Company is put into liquidation and sale is made by the Liquidator acting under the control of the Court and sale, therefore, is really by the Court acting through Liquidator. In paragraph 38 and 39 following was laid down: "38. In a compulsory winding up, the company is put into liquidation against its will by force of law and the order of the court and the sale is made by the liquidator, acting under the control of the court and with its sanction. That is the dictate of law. The sale, therefore is really by the court, acting through the liquidator End the company has no hand in the matter. It is thus a sale against the company's will or a sale in invitum. This is particularly so under the Indian law where the Companies Act differs in an important particular in this respect from its Engl....
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.... 3 SCC 565, M/s Parasram Harnand Rao vs. M/s Shanti Parsad Narinder Kumar Jain and Anr., in which the Hon'ble Supreme Court has referred to Calcutta High Court judgment in Krishna Das Nandy (supra). The Supreme Court held that on account of transfer made by the Official Liquidator the purchaser stepped into the shoes of the Corporate Debtor i.e. the original tenant and the sale on behalf of the Liquidator was held to be voluntary sale. In paragraph 6 of the judgment following was laid down: "6. In the instant case it was appellant who brought the previous suit which resulted in a decree for eviction of the tenant on July 31, 1961 - a date when Respondent 1 had already taken possession of the premises by virtue of transfer made by the Official Liquidator. Thus the identity of the subject-matter being substantially the same, this case clearly falls within the ambit of the ratio in the case supra. On this ground alone therefore the appellant is entitled to succeed because the High Court with due respect does not appear to have properly construed the scope of Order 9, Rule 9 CPC. There is however nothing to show that Respondent 1 was a tenant within the meaning of Rent Control....
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....ny against her wishes. Her written consent is a precondition, as envisaged under sub-section (1)(b) of Section 14 which was not obtained. Therefore, it is a clear case of sub-letting. Even otherwise, it would be an assignment, as admittedly agreed in the agreement referred to hereinbefore between the Foreign Company and the Indian Company. In Parasram Harnand Rao v. Shanti Parsad Narinder Kumar Jain [(1980) 3 SCC 565 : (1980) 3 SCR 444] , the landlord had executed a lease in respect of the demised premises in favour of Laxmi Bank on 1-4-1942; the Bank went into liquidation. The liquidator sold leasehold right to the respondent and the court confirmed the same. An application for eviction came to be filed and it was contended that it being an involuntary transfer it was not a case of sub-letting under Section 14(1)(b) of the Act. This Court had negatived the contention holding thus: "As regards point No. 3, the High Court relying on a decision of the Calcutta High Court in Krishna Das Nandy v. Bidhan Chandra Roy [AIR 1959 Cal 181 : 63 CWN 29] has found that as the transfer in favour of Respondent 1 by the official liquidator was confirmed by the Court, the status of the ten....
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....perty and actionable claims of the corporate debtor in liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in parcels in such manner as may be specified: 1 [Provided that the liquidator shall not sell the immovable and movable property or actionable claims of the corporate debtor in liquidation to any person who is not eligible to be a resolution applicant.] (g) to draw, accept, make and endorse any negotiable instruments including bill of exchange, hundi or promissory note in the name and on behalf of the corporate debtor, with the same effect with respect to the liability as if such instruments were drawn, accepted, made or endorsed by or on behalf of the corporate debtor in the ordinary course of its business;" 15. The scheme in the IBC, thus also reinforce the principle that sale by a Liquidator under the IBC is a sale on behalf of the Corporate Debtor. Such sale cannot be termed to be involuntary sale. The Appellant submission that transfer fee cannot be levied when sale is made by a Liquidator under the IBC, cannot be accepted. 16. Now we come to the second submiss....
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....by the Appellant. Paragraph 13(iii) is as follows: "13(iii). It is made clear that the applicant/ purchaser shall bear and pay the applicable stamp duties, registration fees and all fees and expenses payable for registration of documents, Taxes, GST, etc. and all other duties payable inclusive of transfer fee in connection with purchase of Sale Assets, in addition to the balance bid amount." 20. An Application was filed by the Appellant to modify the aforesaid order dated 23rd June, 2020 praying that direction for payment of transfer fee by the Appellant should be modified. The said Application was specifically rejected by the Adjudicating Authority vide order dated 29th July, 2020. There being specific direction by the Adjudicating Authority for payment of transfer fee by the Appellant and the Appellant having not challenged those orders, cannot be heard in contending that he is not liable to pay transfer fee. 21. Lastly, we may notice the letter dated 26th June, 2019, on the basis of which letter the Appellant was permitted to participate in the bid of the assets. The letter having filed at page 183 of the paper book, is reproduced below: "Date: 26th June,....