2021 (9) TMI 1312 - AT - Companies Law

Auction - right to challenge the auction process - Appellant submitted that the process was conducted in such a haste manner that no one can participate in this process except Welspun Steel Resources Pvt. Ltd. - HELD THAT - It is not appropriate to express any opinion at this stage. This is a fit case for admission as well as for stay of the impugned order. Thus, we hereby stay the impugned order and the auction process till next date of hearing. Let the matter be fixed 'For Admission (After Notice)' on 27th September, 2021.

Summary

Issues Involved:
1. Challenge to auction process and impugned order.
2. Allegations of haste in conducting the auction process.
3. Transparency and fairness in the auction process.
4. Vested rights of the appellant to challenge the auction process.
5. Direction to complete the sale process within a specified timeline.
6. Stay of the auction process pending the appeal.

Analysis:
1. The appellant challenged the auction process and impugned order, highlighting the liquidation order, electronic auction process, and challenges to the Swiss challenge process. The Adjudicating Authority's non-speaking and cryptic order disposing of various applications was impugned in the appeal.

2. Allegations of haste in conducting the auction process were raised by the appellant, pointing out the sudden initiation of a new auction and lack of transparency. The appellant argued that the process was conducted in a manner that favored a specific bidder, raising concerns about fairness and participation in the auction process.

3. The appellant emphasized the lack of transparency and fairness in the auction process, questioning the sudden changes and the limited opportunity for participation. The appellant sought a stay on the auction process pending the appeal, citing concerns regarding the conduct and outcome of the auction.

4. The issue of vested rights of the appellant to challenge the auction process was raised, with the respondent arguing that the appellant had no vested right to challenge the process. The respondent supported the impugned order, while the appellant sought a stay on the auction process.

5. The Adjudicating Authority directed the completion of the entire sale process within three weeks from the date of the order, prompting concerns about the timeline and fairness of the process. The appellant's bid and the sudden changes in the auction process were key points of contention in the appeal.

6. Considering the submissions, the Appellate Tribunal stayed the impugned order and the auction process until the next date of hearing. The Tribunal acknowledged the complexity of the case and the need for further consideration, setting a future date for admission after notice and allowing for the filing of reply affidavits and rejoinders.

This detailed analysis covers the various issues involved in the legal judgment, addressing the arguments presented by the parties and the Tribunal's decision to stay the auction process pending further proceedings.