Authority: National Company Law Tribunal, Mumbai Bench, Court-V

Order Date: 07.07.2026

Case Overview

The application was filed by Indojewel Jewellery Private Limited against Multistoried IT & Gems Commercial Premises Cooperative Society Limited (Respondent No. 1) and Ajit Gyanchand Jain, the erstwhile Liquidator of Panache Exports Private Limited (Respondent No. 2). The matter arose from CP(IB)/2607(MB)/2019 filed by Oriental Bank of Commerce against Panache Exports Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Panache Exports was admitted into Corporate Insolvency Resolution Process (CIRP) on 25.11.2019 and subsequently ordered into liquidation on 23.09.2022. The liquidator conducted an e-auction on 05.07.2023 where Indojewel emerged as the successful auction purchaser for Unit No. 3, Ground Floor, Multi-storied Building SEEPZ, Mumbai, at a price of ₹5.31 crore. The property was sold on "as is where is basis", "as is what is basis", "whatever there is basis" and "no recourse basis" as per the auction notice dated 05.06.2023 and certificate of sale dated 16.08.2023.

Respondent No. 1 society had lodged a claim of ₹70,60,252 with the liquidator on 16.06.2023 for maintenance dues from October 2018 to September 2022. This claim was admitted and the society held 1.17% share in the total admitted claims. Subsequently, the society issued a demand letter dated 16.01.2024 for ₹96,77,048 (including interest) to Indojewel, claiming statutory first charge under Section 47 of the Maharashtra Co-operative Societies Act, 1960.

The tribunal analyzed the interplay between IBC provisions and statutory charges under state laws. It relied on the Calcutta High Court judgment in Cotton Casuals India Pvt. Ltd. & Ors. Vs. State of West Bengal & Ors. which held that where a statute creates a first charge on the property itself, the authority may either submit its claim in liquidation process or independently enforce the statutory charge. The tribunal also referenced the Supreme Court judgment in K.C. Ninan Vs. Kerala State Electricity Board & Ors. which emphasized that auction purchasers are put on notice of liabilities when "as is where is" clause is incorporated and must conduct due diligence.

The tribunal found that Section 47 of MCS Act creates a statutory first charge in favor of the society for outstanding dues, and this charge constitutes an encumbrance running with the property distinct from personal claims against the corporate debtor. The property sale documents clearly indicated the "as is where is" basis of sale, and the list of stakeholders dated 26.07.2023 reflected the society's claim, putting Indojewel on notice.

Final Outcome

The NCLT dismissed IA/3782/2025, ruling that Indojewel as successful auction purchaser is liable to pay the outstanding dues of ₹96,77,048 claimed by the society pertaining to the period prior to the liquidation date (23.09.2022). The tribunal held that the statutory first charge under Section 47 of MCS Act survives the liquidation process and binds the auction purchaser, especially when the property was sold on "as is where is" basis. The corporate debtor Panache Exports was dissolved vide order dated 04.03.2025 after completion of liquidation process.

Topics: Insolvency Law, Property Charges, Auction Purchaser Liability