Bombay High Court
Rvs Global Solutions Pvt Ltd vs The Municipal Commissioner Navi Mumbai ... on 17 October, 2023
Author: G.S. Patel
Bench: G.S. Patel
912-ASWPST-26744-2023+.DOC
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION (ST) NO. 26744 OF 2023
RVS Global Solutions Pvt Ltd ...Petitioner
Versus
The Municipal Commissioner Navi Mumbai ...Respondent
Municipal Corporation
WITH
WRIT PETITION (ST) NO. 26750 OF 2023
RVS Global Solutions Pvt Ltd ...Petitioner
Versus
SHEPHALI
The Municipal Commissioner Navi Mumbai ...Respondent
SANJAY
MORMARE Municipal Corporation
Digitally signed by
SHEPHALI
SANJAY
MORMARE
Date: 2023.10.18
09:44:00 +0530
Mr Subhash Jha, with Linisha Seth, i/b Law Global Advocates, for the
Petitioner in both matters.
Mr Tejesh Dande, for the Respondent-NMMC.
Mr Vilas Maluste, Administrative Officer & Mr Prashant Gawde,
Administrative Officer, NMMC present.
CORAM G.S. Patel &
Kamal Khata, JJ.
DATED: 17th October 2023
PC:-
1. In both Petitions, Rule. Mr Dande waives service for the sole Respondent, the Navi Mumbai Municipal Corporation ("NMMC") Page 1 of 6 17th October 2023 ::: Uploaded on - 18/10/2023 ::: Downloaded on - 19/10/2023 02:29:02 ::: 912-ASWPST-26744-2023+.DOC
2. Prayer (a) of Writ Petition (St) No. 26744 of 2023 reads thus:
"(a) that this Hon'ble Court may be pleased to direct the Respondent to issue property tax invoice/bill afresh in the name of the Petitioner after the Official Liquidator appointed by NCLT, Mumbai Bench, Mumbai under the provisions of Insolvency and Bankruptcy Cody issued Sale Certificate in favour of the Petitioner on 30th June 2021 concerning Plot No. EL-80, Electronic Zone, TTC Industrial Area, MIDC, Mahape, Navi Mumbai 400 701 from July 2021 onwards dehors the liability of the erstwhile lessee Maestros Mediline Systems Limited."
3. The corresponding Prayer (a) in Writ Petition (St) No. 26750 of 2023 reads thus:
"(a) that this Hon'ble Court may be pleased to direct the Respondent to issue property tax invoice/bill afresh in the name of the Petitioner after Bank of Baroda issued Sale Certificate in favour of Petition on 3rd March 2022 concerning Plot No. EL-79, TTC Industrial Area, MIDC, Mahape, Navi Mumbai - 400 701 from March 2022 onwards dehors the liability of the erstwhile lessee Seto Teknolog Private Limited/Sameera Electronics Private Limited."
4. The question of law that arises in these two matters is as follows. There are two plots of land within the jurisdiction of the NMMC..
5. In Writ Petition (St) No. 26744 of 2023, the land in question is Plot No. EL-80 of the Electric Zone, TTC Industrial Area, MIDC Mahape, Navi Mumbai 400 701. In this case there is a corporate Page 2 of 6 17th October 2023 ::: Uploaded on - 18/10/2023 ::: Downloaded on - 19/10/2023 02:29:02 ::: 912-ASWPST-26744-2023+.DOC lessee that went into CIRP under the Insolvency and Bankruptcy Code. In Writ Petition (St) No. 26750 of 2023, we are concerned with Plot No. EL-79, in the same industrial area where there are SARFAESI proceedings.
6. These two plots were admittedly first given on lease to other entities. In Writ Petition (St) No. 26744 of 2023, the original lessee of EL-80 was one Maestros Mediline Systems Limited. That corporate entity was then taken into a Corporate Insolvency Resolution Process ("CIRP"). There was no resolution plan. Liquidation was ordered.
7. In Writ Petition (St) No. 26750 of 2023, the original lessees of Plot EL-79 were Seto Techonolog Pvt Ltd and Sameera Electronics Pvt Ltd. Against these, there were proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
8. Both plots were put to auction sales.
9. This is where the Petitioner now enters the picture. The Petitioner was the successful bidder at the auction sales. According to Mr Jha for the Petitioners, if there is a liquidation and an auction sale of the assets by the liquidator under the IBC, or there is an auction under SARFAESI, then an auction purchaser is only liable to pay that which is the subject matter of the auction notice, i.e., amounts as stated in the auction notice while presenting the bid. He submits that in an IBC proceeding, had there been a resolution plan Page 3 of 6 17th October 2023 ::: Uploaded on - 18/10/2023 ::: Downloaded on - 19/10/2023 02:29:02 ::: 912-ASWPST-26744-2023+.DOC that was finally approved, claims even from statutory authorities or local authorities that were not part of the approved resolution plan, would stand extinguished allowing the resolution applicant to, in the words of the Supreme Court itself, to start on a 'clean slate'. Viewed from either perspective, the Petitioner cannot be expected to pay any accumulated arrears of property tax or municipal dues that were the liability of the previous corporate lessee after the auction sale.
10. This is the question of law that is to be decided.
11. However, in the meantime, we see no reason why the NMMC should be deprived of receipt of property tax amounts from and after the date of the respective sale certificates. After all, here is the Petitioner who seeks the issuance of a property tax bills and expresses willingness (in Mr Jha's case, downright enthusiasm) to make this payment because he says that the payment will be made the very next day.
12. We do not want a slip up but equally we need to preserve the contentions by Mr Dande that arrears of property tax attach to the property in question. He submits that there can be no extinguishment of property tax dues merely because there is an auction sale. Under municipal corporation law, the municipal corporation is always entitled to move against the property itself if its demand on the holder of the property fails to recover any unpaid arrears of property tax.
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13. While we will consider the rival submissions on law after there is an Affidavit in Reply, and, if necessary, a Rejoinder, and will do so on the earliest available date, we will believe an interim order is necessary in view of the prayers in the Petition.
14. We direct the municipal corporation to issue the property tax bills for both plots in two parts or showing two different periods, i.e., property tax dues prior to the sale certificate of 30th June 2021 in Writ Petition (St) No. 26744 of 2023 and property tax dues after 1st July 2021 for that Petition and that plot. Similarly, in Writ Petition (St) No. 26750 of 2023, the property tax bills will be shown for two periods, i.e., amounts due after the sale certificate of 3rd March 2022, i.e., from 4th March 2022 onwards and all dues accumulated until 3rd March 2022.
15. These bills are to be given to the Petitioner by 31st October 2023. While Mr Jha states that these will be paid the next day, we give the Petitioner time until 10th November 2023 to make payment of the amounts of these bills after the dates of the sale certificates, i.e., after the present Petitioner acquired title to the premises in question. We are given to understand that bills are issued with a periodicity from the first of each month. Therefore, in issuing these bills, the period will be from the first day of the nearest month in question.
16. Of course, the acceptance by the NMMC of the payment by Mr Jha's clients, the Petitioners, will be strictly on a without prejudice and no equities basis.
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17. As to amount claimed for the balance period, i.e., the period prior to the two sale certificates, that will necessarily be subject to a decision on law after we have heard both sides.
18. We permit Mr Dande to put an Affidavit in Reply by 30th November 2023. At this stage, no Rejoinder.
19. We will take up the Petitions for hearing and final disposal at 2.30 pm on 13th December 2023.
20. Mr Dande says that there are other procedural requirements such as an MIDC transfer order and payment of a transfer fee. These will be communicated to the Petitioners by 28th October 2023. Mr Jha says that these requirements will be met and any such amounts will be paid by 27th October 2023.
21. All concerned will act on production of an authenticated copy of this order.
(Kamal Khata, J) (G. S. Patel, J) Page 6 of 6 17th October 2023 ::: Uploaded on - 18/10/2023 ::: Downloaded on - 19/10/2023 02:29:02 :::