NCLT Mumbai Clears Auction Buyer of Past Municipal Dues in AJS Impex Liquidation

Background

The National Company Law Tribunal, Mumbai Bench-I, has ruled that Aurashine Essentials Pvt. Ltd., which purchased a commercial unit of AJS Impex Private Limited through a liquidation e-auction, cannot be held liable for past property tax dues owed by the corporate debtor to the Brihanmumbai Municipal Corporation (BMC). The Tribunal held that statutory dues relating to periods before the sale form part of the liquidation estate and must be settled under the waterfall mechanism of Section 53 of the Insolvency and Bankruptcy Code, not recovered from the auction purchaser. Since BMC had not filed any claim in the liquidation process, it was directed to approach the liquidator instead of enforcing recovery against the buyer.

However, the NCLT declined to intervene on the administrative issue of allotting a separate property tax number, leaving it to BMC’s internal procedures.

The order reinforces the “clean slate” principle for purchasers of assets in insolvency liquidation.