Canara Bank vs Eagle Fashion Pvt. Ltd. & Ors
- CitationCompany Appeal (AT) (Insolvency) No. 2199 of 2024
Ratio decidendi
The rule this decision rests on
Where the sale notice and expression of interest for a corporate debtor's assets as a going concern include an income tax refund as an asset, and the balance sheet as of the relevant date shows that refund as part of the corporate debtor's assets, the successful auction purchaser is entitled to that refund, and the bank holding the amount may be directed to pay it over to the applicant.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Canara Bank ...Appellant
Versus
Eagle Fashion Pvt. Ltd. & Ors. ...Respondents
Present: For Appellant : Mr. Urvesh K Gor, Advocate
For Respondent : None
ORDER
(Hybrid Mode)
02.01.2025 I.A. No. 8171 of 2024 This is an application praying for
condonation of 33 days delay in re-filing the Appeal. Appellant claims to have
filed the Appeal on 01.10.20214 and defects were marked an 05.10.2024.
Sufficient cause has been shown in paragraph 5 for condonation of re-filing
delay. Refiling delay is condoned.
Heard Learned Counsel for the Appellant.
This Appeal has been filed against the order passed by Adjudicating
Authority dated 20.09.2024 in No. IA/341(AHM)/2024 which was filed by
Successful bidder of the auction sale. The direction has been issued to the
Appellant to refund the amount of Rs.1,40,54,870/- aggrieved by the said
order the Appellant has filed this Appeal.
Learned Counsel for the Appellant submits that there is no dispute that
the said amount was income tax refund but the said amount was received
much prior to the sale notice issued on 09.12.2021, but by mistake it was not brought into the notice of the member of Committee of Creditors as well as
the Liquidator.
The Adjudicating Authority in paragraph 7(VI) has made following
observations:
"......
VI. It is noted that in the sale notice cum invitation for expression of interest for sale of assets of Corporate Debtor as a going concern under liquidation dated 09.12.2021, the "Income Tax Refund" is shown under the head of "Short Term Loans & Advances" as balances with government authorities."
And further the balance sheets as on 31.03.2021 has been noticed in
paragraph 11 of the order, which is as follows:
"......
11. In light of the above this Tribunal directs that as per the Balance sheet 31.03.2021 the amount of Rs.1,40,54,870/- being income tax refund shall form part of the assets of the Corporate Debtor and such amount of Rs.1,40,54,870/- shall be paid by the Respondent No.2 i.e., Canara Bank, to the applicant no. 2 within 7 days of this order."
When the Expression of Interest for sale of assets clearly included that
income tax refund which was to go to the successful auction purchaser as
reflected in the balance sheet of 31.03.2021, we do not find any error in the
order of Adjudicating Authority directing the Appellant to give the amount of
Rs.1,40,54,870/- which was income tax refund. Sufficient reasons have been
given by Adjudicating Authority for issuing directions impugned in the appeal.
Company Appeal (AT) (Insolvency) No. 2199 of 2024 2 of 3 We thus, do not find any good ground to entertain the appeal. Appeal is
dismissed.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical)
[Arun Baroka] Member (Technical) pks/nn
Company Appeal (AT) (Insolvency) No. 2199 of 2024 3 of 3
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