Sale of Corporate Debtor, as a Going Concern’, covers both assets & liabilities

Harsh Vinimay Pvt Ltd Vs Maa Mahamaya Steels Pvt Ltd (NCLT Mumbai)

Sale of Corporate Debtor as a ‘Going Concern ‘as is where is’ basis under Regulation 32 A of the IBBI (Liquidation Process) Regulations, 2016 and the Code means sale of assets as well as liabilities and not assets sans liabilities.

Facts-

E-auction, of the assets of the Corporate Debtor, was scheduled on 03.03.2021. The Applicant submitted an EDM of Rs. 50,00,000/-. The Applicant was declared as the Successful Bidder of the Corporate Debtor as a going concern with a bid amount of Rs. 4,65,00,000/- and was accordingly issued a letter of intent dated 19.05.2021 by the Liquidator. On 31.05.2021, the Applicant paid the entire remaining consideration of Rs. 4,15,00,000/- along with an interest of Rs. 10,09,000/-. The same was acknowledged by the Liquidator on 01.06.2021.

Thereafter, the Applicant filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) against the Liquidator before the Adjudicating Authority, seeking that the Applicant shall not be responsible for any other claims/ liabilities/ obligations etc. payable by the Corporate Debtor as on this date to the Creditors or any other stakeholders including Government dues. All the liabilities of the Corporate Debtor as on the date stand extinguished, as far as the Applicant is concerned.

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