2020 (3) TMI 88 - Tri - Insolvency and Bankruptcy

Approval and acceptance of Bid - direction to Liquidator to sell the Corporate Debtor - applicants seek direction to the Liquidator to allow them to start the work so that the Corporate Debtor can be made operational upon their paying first installment. Ld. Counsel for State Bank of India objected this arrangement only on the ground that the successful bidders did not pay even first installment as per time schedule - HELD THAT - We have accepted and approved bid of the applicant. They were only bidders and they have offered an amount more than the liquidation value of the Corporate Debtor. We also consider the fact that the Corporate Debtor must be made operational so that some people may get employment. While directing the successful bidders to pay first installment to the Liquidator within 3 days, we further direct the Liquidator to allow the successful bidders to start the work under his supervision so that the Corporate Debtor can be made functional - It is made clear that above arrangement is made for convenience of the successful bidders. But we make it clear that custody and possession of all assets of the Corporate Debtor shall remain with the Liquidator as per order dated 25.09.2019. Clarification disposed off.

Summary

Issues: Clarification on allowing successful bidders to start work before paying first installment.

In this case, the National Company Law Tribunal, Kolkata, approved the bid of the successful bidders for a sum of ?70 Crores for the Corporate Debtor and directed the Liquidator to sell the assets to them. The successful bidders sought permission to commence work before paying the first installment to make the Corporate Debtor operational. The State Bank of India objected, citing non-payment according to the schedule. The Liquidator agreed to allow work upon payment of the first installment within three days. The Tribunal considered the bid, noting it exceeded the liquidation value and the need to make the Corporate Debtor operational for employment opportunities. The Tribunal directed the successful bidders to pay the first installment within three days and commence work under the Liquidator's supervision to operationalize the Corporate Debtor. The possession of assets, however, remained with the Liquidator as per the previous order. The Tribunal disposed of the case with the clarification provided.