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An auction purchaser’s payment under protest did not make it liable for the corporate debtor’s old UPSIDA dues in RDB Realty & Infrastructure Limited v. UPSIDA. On 2 September 2026, NCLT Allahabad ordered a ₹35,31,779 refund. The result depended on the identified pre-CIRP liability, its admission in liquidation and the protest-payment record; it was not a blanket cancellation of every purchaser obligation. Official order, paragraphs 15–25.
Order and transaction at a glance
| Item | Verified detail |
|---|---|
| Tribunal | NCLT Allahabad Bench, Prayagraj |
| Members | Praveen Gupta, Judicial; Ashish Verma, Technical |
| Applications | IA367/2024 and IA502/2024 in CP(IB)55/ALD/2017 |
| Corporate debtor | L.M.L. Limited, in liquidation |
| Applicant | RDB Realty & Infrastructure Limited, auction purchaser |
| Order date | |
| Operative relief | IA502 allowed; UPSIDA directed to refund ₹35,31,779; IA367 disposed of |
The purchaser acquired leasehold properties through the liquidator’s auction. The sale certificate was dated 7 July 2023 and possession documentation dated 18 July 2023. UPSIDA later required payment of outstanding amounts in connection with transfer formalities. The Tribunal examined whether those demands concerned an obligation independently assumed by the purchaser or old dues of the corporate debtor. Paragraphs 12–15.
Characterising the dues came before reading the sale disclaimer
The demand record related to outstanding rent for a period preceding CIRP and the sale. UPSIDA had already lodged a liquidation claim of ₹2,77,12,397, which the liquidator admitted in full. Those facts connected the disputed payment to the corporate debtor’s creditor-distribution process. They did not make ₹2.77 crore the refund ordered; the specific refund was ₹35,31,779. Paragraphs 14–17 and 25.
This distinction between the claim, the demand and the relief is essential. A sale-dispute article can mislead if it treats every figure in the record as the auction purchaser’s present liability or as money actually returned. The order directed repayment; it does not establish that the refund was subsequently completed.
Why “as is where is” did not decide this dispute
UPSIDA relied on the auction terms, the sale certificate and requirements for purchaser diligence, taxes and transfer-related expenses. The sale was described on as-is/no-recourse terms. The Tribunal did not ignore those clauses. It asked what liability they actually transferred in the setting of the liquidation. Paragraphs 18–19.
The Bench held that those general expressions could not, by themselves, create an independent obligation to discharge an admitted debt that had arisen before sale and had already been claimed in liquidation. Reading them in isolation would undermine the Code’s mechanism for adjudication and distribution of creditor claims. That reasoning addressed this established old liability; it did not hold that a purchaser is exempt from every post-sale charge, transfer fee or specifically assumed encumbrance.
For an auction review, the relevant comparison is between the precise demand and the purchaser’s actual undertaking. The existence of a broad disclaimer is the beginning of that examination, not necessarily its conclusion.
The transfer papers were read in the context of protest
The purchaser had paid while contesting the demand and while proceedings were pending. The Tribunal treated the affidavit and indemnity furnished for transfer as consequential to that payment. In this factual setting, it refused to read them as an independent voluntary undertaking to discharge the corporate debtor’s pre-CIRP dues. Paragraphs 16 and 24.
The timing of the objection therefore mattered. This decision should not be paraphrased as saying that writing under protest on any payment automatically defeats an otherwise valid contractual obligation. Here the proceeding, the identified old dues, the admitted liquidation claim and the transfer-document context worked together.
The Bench also distinguished the authority relied on by UPSIDA concerning a purchaser who had accepted transfer-memorandum terms and contractual obligations. Its point was a material factual difference, rather than a declaration that every authority on purchaser undertakings was wrong. Paragraph 20.
Section 53 was the route for the admitted corporate claim
The Tribunal held that UPSIDA remained entitled to payment of its admitted claim according to the applicable Code provisions and the Section 53 distribution mechanism. It did not erase the authority’s creditor status or declare that no sum could ever be distributed to it. It rejected recovering these old corporate dues separately from this purchaser. Paragraphs 21–25.
The order’s discussion of Bhatpara Municipality v. Nicco Eastern supported that treatment. This note reports the use of that precedent in the NCLT decision; it does not separately reconstruct the complete appellate judgment or turn its quoted propositions into an independent survey of all statutory-charge cases.
What was ordered, and what was not
UPSIDA was directed to refund ₹35,31,779 paid under protest. IA502/2024 was allowed. The earlier IA367/2024, in which interim protection against coercive action had been granted, was disposed of because no further order was considered necessary after granting the refund relief. Paragraphs 25–27.
The order does not supply a verified date of actual repayment, interest on the refund, or a present balance of the liquidation estate. Those matters should not be added to the outcome without a later primary record.
Questions for an auction purchaser’s evidence file
Veritect’s practical reading of the order is to preserve four separate trails: the sale terms and certificate; the source and period of the demand; the authority’s claim and its admission in liquidation; and the purchaser’s objection, payment and transfer papers. Counsel can then explain whether an undertaking genuinely creates a new obligation or merely accompanies payment of the old disputed demand.
Does an as-is clause always protect the purchaser from statutory dues?
No. This order addresses the particular admitted pre-CIRP dues and documents before it. Other obligations need their own statutory and contractual analysis.
Was UPSIDA’s admitted claim rejected?
No. The Bench preserved payment through the Code’s distribution mechanism while directing refund of the amount collected from the purchaser.
Did protest alone secure the refund?
The reasoning was broader: the liability’s old character, prior claim admission, pending challenge and consequential transfer documents all mattered.
Primary source and scope
Read the official 2 September 2026 order, especially paragraphs 11–27. The article was checked against the original on 1 November 2026 and describes the relief as directed. Targeted official-source checks did not establish later treatment or compliance; that is not a finding that no later appeal, stay or refund record exists.