2020 (2) TMI 1003 - AT - Companies Law

Liquidation of Corporate Debtor - Resolution Professional failed to complete the CIRP process within the time - HELD THAT - The Adjudicating Authority has no jurisdiction to decide any allegations either against the 'Resolution Professional' or the Liquidator. Though if any act of the 'Resolution Professional' or the Liquidator, against the provisions of the 'I B Code', is noticed then the matter is to be referred to the Insolvency and Bankruptcy Board of India. This apart, in absence of any evidence to find that there was an undervaluation and there was a certain loss caused to the value of assets of the 'Corporate Debtor' by not protecting or not handing over the Germ Plasm/parent seeds, the auction purchaser has been rightly directed to pay the difference amount of ₹ 31 lakhs to the Liquidation Account of the 'Corporate Debtor' which he had agreed - The 6th Respondent- Mr. Kiran Gubba, has been rightly directed to make good the loss caused to the 'Corporate Debtor' by dumping Germ Plasm/Parent seed by paying the value of the same. Application dismissed.

Summary

Issues: Delay in preferring the appeal; Allegations of undervaluation and loss in liquidation process; Allegations of bias against the Liquidator; Jurisdiction of Adjudicating Authority to decide on allegations against Resolution Professional or Liquidator; Dismissal of appeal.

Delay in preferring the appeal:
The Appellant submitted that there was a delay of only about 6 days in preferring the appeal due to the certified copy of the impugned order being handed over late. The Tribunal, after hearing the counsel and being satisfied with the grounds, condoned the delay and disposed of the application.

Allegations of undervaluation and loss in liquidation process:
The Appellant, a Shareholder/Promoter, filed an application alleging undervaluation of assets of the Corporate Debtor during the liquidation process. The Liquidator was accused of causing a loss of around Rupees Three Crores by not valuing the Plant and Machinery properly. The Adjudicating Authority rejected the application but directed certain respondents to pay amounts to maximize the value of the Corporate Debtor's assets.

Allegations of bias against the Liquidator:
The Appellant claimed bias against the Liquidator in the matter of valuation. However, the Tribunal declined to delve into this issue in the absence of evidence supporting the allegation of bias against the Liquidator.

Jurisdiction of Adjudicating Authority regarding allegations against Resolution Professional or Liquidator:
The Tribunal emphasized that the Adjudicating Authority does not have jurisdiction to decide on allegations against the Resolution Professional or the Liquidator. Any grievances against them should be brought to the notice of the Insolvency and Bankruptcy Board of India for necessary action.

Dismissal of appeal:
The Tribunal found no grounds to interfere with the impugned order, stating that there was no evidence of undervaluation or loss in the liquidation process. The appeal was accordingly dismissed, with no costs imposed.

This judgment highlights the importance of timely appeal filing, the role of the Liquidator in maximizing asset value, the need for evidence to support allegations of bias, and the jurisdictional limitations of the Adjudicating Authority in deciding on Resolution Professional or Liquidator issues.