2021 (9) TMI 1520 - Tri - Insolvency and Bankruptcy

Approval of the Resolution Plan - HELD THAT - This Bench, after having seen the figures mentioned by the Resolution Professional, is not convinced that the fair value of the assets have been projected in the proper manner. It is also surprising that the Resolution Plan Applicant is bidding with the amounts very close to that of fair value as projected in the Resolution Plan. In view of the same, with the powers vested in this Bench, it is ordered that the revaluation of the assets of the company by the experts under the supervision of the Official Liquidator, Ministry of Corporate Affairs, in-charge of this particular area, under whose jurisdiction the company is situated. This application for the approval of the Resolution Plan is kept in abeyance and the Official Liquidator is directed to provide the exact figures/value of the assets and exact valuation details within three weeks from the date of the receipt of this order - List the matter for further consideration on 05.10.2021.

Summary

Issues Involved:
- Approval of Resolution Plan
- Valuation of Assets

Approval of Resolution Plan:
The judgment pertains to an application for the approval of a Resolution Plan. The Resolution Professional stated that the total haircut would be approximately 94.25%. The total debt was disclosed to be around Rs. 1761.70 crores, with the fair value of assets at about Rs. 130.50 crores and the liquidation value at Rs. 101.7 crores. However, the Bench expressed doubts regarding the proper projection of the fair value of assets. It noted that the Resolution Plan Applicant's bids were very close to the fair value projected in the plan. Consequently, the Bench ordered the revaluation of the company's assets by experts under the supervision of the Official Liquidator. The Official Liquidator was directed to provide the exact figures and valuation details within three weeks, while the Resolution Professional was instructed to submit the two valuation reports obtained by him before the next hearing scheduled for 05.10.2021.

Valuation of Assets:
The primary issue in the judgment was the valuation of assets in the context of approving a Resolution Plan. The Bench raised concerns about the accuracy of the fair value of assets as projected in the Resolution Plan. It found it surprising that the Resolution Plan Applicant's bids closely matched the fair value figures. Consequently, the Bench exercised its authority to order the revaluation of the company's assets by experts supervised by the Official Liquidator. This decision was made to ensure a more accurate and reliable valuation process, given the significant financial implications involved in approving the Resolution Plan. The Official Liquidator was tasked with providing precise asset figures and valuation details within a specified timeframe, emphasizing the importance of obtaining accurate valuation information for making informed decisions regarding the approval of the Resolution Plan.