Case Note & Summary
The writ petition arose from a dispute over revenue entries recorded by the Tahsildar against immovable properties purchased by the petitioner in a liquidation auction. The petitioner, Goenka Proteins Private Limited, a company registered under the Companies Act, participated in the auction of assets of Rasoya Proteins Ltd., a corporate debtor undergoing liquidation under the Insolvency and Bankruptcy Code, 2016. The National Company Law Tribunal, Mumbai Bench, by order dated 27.06.2017, commenced the Corporate Insolvency Resolution Process, and subsequently the liquidator, Respondent No.2, took control of the corporate debtor's assets. On 09.11.2020, the liquidator issued a sale notice to auction the assets on an as is where is, as is what is and whatever there is basis. The petitioner emerged as the highest bidder, paid the entire sale consideration, and was issued a Letter of Intent, Letter of Possession, and ultimately a Certificate of Sale dated 23.03.2021, which confirmed that the sale was free from all encumbrances. The petitioner executed a sale deed with the corporate debtor, which also confirmed that the property was sold free of all encumbrances, cesses, and dues up to the date of registration. Despite this, the petitioner later discovered that a charge had been created on the revenue records in the 7/12 extract for immovable properties at Gat Nos. 348, 349, 350, 351/1, 351/2, and 316, shown in the property card's remarks column. The challenged entries were Revenue Entry No. 2081 dated 12.02.2018 and Revenue Entry No. 1986 dated 02.11.2016. The petitioner contended that these entries were made at the instance of Respondent Nos. 3 and 4, based on a pending civil suit and alleged GST dues, and were unlawful because the property was purchased free from encumbrances and the mutation was made without notice and contrary to Section 150 of the Maharashtra Land Revenue Code. The Income Tax Department had earlier attached the property but subsequently directed its release. The Maharashtra State Sales Tax Department attached the property for outstanding dues reflected in the 7/12 extract. Respondent No.2, the liquidator, stated that all claims should have been submitted to him as per the IBC, and he had admitted the GST Department's claim of Rs.34.05 crore under Section 53(1)(e) of the IBC. Respondents 1 and 5 argued that the petitioner had an alternate remedy of appeal under Section 247 of the Maharashtra Land Revenue Code, which had not been availed, and that the entry was based on a registered notice of lis pendens under Section 52 of the Transfer of Property Act in connection with Special Civil Suit No. 32/2015 filed by Respondent No.3. Respondent No.4, the GST Department, contended that proceedings had been initiated before execution of the sale deed and that Respondent No.2 had failed to disclose encumbrances. The High Court heard learned counsel for the parties, perused the documents, and considered the cited precedents. The available judgment text does not include the final operative decision or directions of the court.
Headnote
A) Insolvency Law - Liquidation Sale - Free from Encumbrances - Insolvency and Bankruptcy Code, 2016, Section 53 - Petitioner purchased corporate debtor's property in liquidation auction on as is where is basis and paid full consideration; liquidator claimed sale was free from encumbrances and all claims should be submitted to liquidator for distribution under Section 53 priority; dispute concerned revenue entries recorded by Tahsildar despite such sale (Paras 3-6, 13-15). B) Revenue Law - Mutation Entry - Notice and Procedure - Maharashtra Land Revenue Code, 1966, Section 150 - Petitioner alleged mutation entry made without notice and contrary to Section 150 procedure; respondent claimed entry based on pending civil suit and lis pendens; court was required to examine validity of revenue entries (Paras 7, 12). C) Civil Procedure - Alternate Remedy - Writ Maintainability - Maharashtra Land Revenue Code, 1966, Section 247 - Respondents contended petitioner had alternate efficacious remedy of appeal under Section 247 before Sub-Divisional Officer which remained unavailed; court had to consider whether to entertain writ despite such remedy (Paras 11, 17). D) Property Law - Lis Pendens - Transfer of Property Act, 1882, Section 52 - Respondent No.3 filed Special Civil Suit No.32/2015 and registered notice of lis pendens under Section 52; Mutation Entry No.1986 made pursuant to such registration; issue whether lis pendens survives liquidation sale and affects auction purchaser (Para 12). E) Taxation - GST Dues - Recovery from Auction Purchaser - Insolvency and Bankruptcy Code, 2016, Section 53(1)(e) - GST Department attached property for outstanding dues; liquidator admitted claim of Rs.34.05 crore under Section 53(1)(e) and contended charge on sold property meaningless; dispute whether statutory dues payable from sale proceeds or property remains encumbered (Paras 15-16).
Issue of Consideration
Whether revenue entries recorded against auction-purchased property during liquidation are valid; whether writ petition maintainable despite alternate remedy under Section 247; whether statutory dues can be recovered from property after liquidation sale free from encumbrances
Law Points
- Liquidation sale under IBC free from encumbrances
- claims to be submitted to liquidator and distributed under Section 53 IBC
- mutation entry under Section 150 Maharashtra Land Revenue Code requires notice
- lis pendens under Section 52 Transfer of Property Act
- alternate remedy under Section 247 Maharashtra Land Revenue Code
