Shantech International Pvt. Ltd. Vs Devendra Singh (NCLAT Delhi)
Summary: NCLAT Principal Bench, New Delhi dismissed the appeal of Shantech International Pvt. Ltd., the successful auction purchaser of Venus Rolling Mills Pvt. Ltd., and upheld the NCLT Mumbai order refusing to extend the purchaser’s requested reliefs and concessions up to the date of the e-auction sale. The Corporate Debtor entered CIRP on 22.04.2019 and liquidation commenced on 09.06.2022. After seven e-auctions, the Corporate Debtor was sold as a “going concern” in the seventh e-auction held on 30.03.2023 and the Sale Certificate was issued to the Appellant on 14.09.2023. The purchaser contended that the “clean slate” principle required all liabilities to be extinguished up to the date of actual sale rather than merely up to an earlier cut-off date.
The NCLAT examined the e-auction terms and found them decisive. Clause 5 provided that the Corporate Debtor was offered as a going concern strictly on an “as is where is & as is what is” basis. More importantly, the Note to Schedule-1 specifically provided that all known or unknown, claimed or unclaimed, disclosed or undisclosed liabilities and obligations as on the cut-off date, defined as the liquidation commencement date, including claims of secured and unsecured creditors, workers, employees and statutory authorities for Income Tax, Sales Tax, GST, Service Tax, DGFT, Excise and Customs, were to be dealt with under Section 53 of the Insolvency and Bankruptcy Code, 2016 as full and final settlement.
