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2023 (3) TMI 1476 - AT - Insolvency and BankruptcyAuction of the Corporate Debtor as a going concern - lease deed continues in the name of Corporate Debtor - sale of shares of corporate debtor - HELD THAT - There is no dispute between the parties that there was a lease by the Chandigarh Administration and the auction of the Corporate Debtor was proposed as going concern. The letter dated 06th May, 2019 referred to by the Learned Counsel for the Appellant was issued by the Chandigarh Administration where mention was made regarding the amount chargeable on account of transfer fees. Respondent submits that present is a case where lease deed continues in the name of Corporate Debtor hence what is sold is the shares of the corporate debtor - There are no error in the carrying out auction of the corporate debtor as going concern. Further submission is that under Regulation 32A sub-clause 4, auction did not take place within 90 days. It is not denied that auction sale notice was issued initially prior to the insertion of provision of Regulation 32A, hence the auction, regulation 32A sub-clause (4) cannot be pressed in service. Thus, no ground has been made to interfere with the Impugned Order - appeal dismissed.
Issues:
1. Challenge against the Order dated 04.11.2022 passed by the National Company Law Tribunal, Chandigarh Bench. 2. Appeal by the Suspended Director of the Corporate Debtor against the Order. 3. Challenge to the Auction Notice and subsequent rejection of applications CA No. 15 of 2020 and I.A. No. 553 of 2020. 4. Dispute regarding the lease of the property from the Chandigarh Administration. 5. Interpretation of Regulation 32-A (4) in relation to the sale of the corporate debtor within 90 days from the liquidation commencement date. 6. Validity of the auction of the Corporate Debtor as a going concern. 7. Application of Regulation 32A sub-clause 4 in the auction process. Analysis: The Appellate Tribunal heard the appeal against the Order of the National Company Law Tribunal, Chandigarh Bench, related to the auction of the Corporate Debtor. The Suspended Director challenged the Order that decided on CA No. 15 of 2020 and I.A. No. 553 of 2020. The appeal raised concerns about the Auction Notice and subsequent rejection of the applications. The Appellant's Counsel argued that the property was leased from the Chandigarh Administration, emphasizing the lack of permission for property transfer and referring to Regulation 32-A (4) regarding the sale timeline. The Tribunal acknowledged the lease and the auction proposal for the Corporate Debtor as a going concern, noting a letter from the Chandigarh Administration on transfer fees. Regarding the lease deed status, the Respondent's Counsel contended that the lease continued in the name of the Corporate Debtor, suggesting the sale of the shares of the corporate debtor. The Tribunal found no error in conducting the auction of the corporate debtor as a going concern. The Respondent raised the issue of the auction not taking place within 90 days as per Regulation 32A sub-clause 4, arguing for asset sale under specific clauses. However, since the auction sale notice was issued before the insertion of the relevant regulation, the Tribunal held that the sub-clause could not be applied retrospectively to the auction process. Ultimately, the Tribunal concluded that there were no grounds to interfere with the Impugned Order and dismissed the appeal, affirming the decision of the National Company Law Tribunal.
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