The Nagpur Bench of the Bombay High Court has provided significant relief to Goenka Proteins Private Limited by striking down revenue entries that had cast a cloud over properties purchased through auction from Rasoya Proteins Ltd., a company that had undergone insolvency proceedings.
The Division Bench of Justice Smt. M.S. Jawalkar and Justice Pravin S. Patil delivered the verdict on 22 August 2025, allowing the writ petition filed by Goenka Proteins. The petitioner had challenged mutation entries made by the Tahsildar, which indicated charges on land parcels in Yavatmal district despite the sale being conducted under the Insolvency and Bankruptcy Code (IBC).
Background of the Dispute
Rasoya Proteins Ltd., facing financial crisis, entered liquidation after the National Company Law Tribunal (NCLT), Mumbai Bench, initiated corporate insolvency proceedings in June 2017. The liquidator, Mr. Anil Goel, later conducted several e-auctions, eventually selling immovable assets to Goenka Proteins in 2020.
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The company paid the full consideration, received a Sale Certificate in March 2021, and was assured that the property would be transferred free from encumbrances. However, the petitioner later discovered entries in the revenue records reflecting statutory dues and a pending civil suit, which created hurdles for clear ownership.
Contentions of the Parties
Goenka Proteins argued that once the assets were auctioned under IBC and the liquidator issued the sale certificate, no statutory authority could enforce old dues against the auction purchaser. Their counsel stressed that all claims by creditors, including the Sales Tax Department, had to be filed before the liquidator and settled through the waterfall mechanism under Section 53 of the IBC.
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On the other hand, the State contended that outstanding dues of over ₹51 crore under the Maharashtra VAT Act and other statutory charges had created a valid encumbrance prior to the auction sale. It was argued that the “as is where is” clause in the auction notice placed responsibility on the buyer to verify the title.
Court’s Observations
The High Court examined multiple precedents, including judgments of the Supreme Court and High Courts of Himachal Pradesh and Gujarat. The Bench relied on the “clean slate” principle under the IBC, which ensures that once a company undergoes liquidation, its assets are transferred to the purchaser free of prior claims.
The Court noted: “Once the NCLT passes an order of liquidation and appoints a liquidator, all assets vest in the liquidator as custodian. Any charge created thereafter is void in law.”
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It further observed that the liquidator had already admitted the Sales Tax Department’s claim of ₹34.05 crore and assured payment through liquidation proceeds. Hence, attaching the auctioned property afresh was impermissible.
Allowing the writ petition, the Court quashed mutation Entry No. 2081 (dated 12.02.2018) and Entry No. 1986 (dated 02.11.2016) recorded by the Tahsildar at the behest of private parties and tax authorities. The Bench directed that all charges reflected in the 7/12 extract for the auctioned lands in Mouza Wanjari, Yavatmal, be removed.
Case Title: Goenka Proteins Private Limited vs. The Tahsildar, Yavatmal & Ors.
Case Number: Writ Petition No. 5661 of 2024
