2021 (3) TMI 302 - Tri - Insolvency and Bankruptcy

Seeking extension of Liquidation proceedings - seeking permission for private sale of 9 cents owned by the company to Sh. Mishael Jose for a price of ₹ 6 lakhs arrived at by reducing 25% from the Reserve price of ₹ 8 lakhs, as certified by the Registered Valuer in compliance with IBC 2016 and sub Clause 4(A) of Clause 1 of the Schedule- I of The Ibbi (Liquidation Process) Regulations, 2016 - Regulation 33 of IBBI (Liquidation Process) Regulations, 2016 - HELD THAT - Admittedly, in this case, Liquidator had stated that the first e-auction was held on 26.04.2019, in which no bidders were shown their interest. The second round of e-auction was held on 26.06.2019, even though one bid was received, the transaction could not be done due to technical issues. Based on the direction from NCLT, Chennai Bench, another round of e-auction was conducted on 09.08.2019. The sole bidder had given separate bid as laid down in public notice for three shop rooms only. Other assets of the company have no bidders for the second and third e-auction sale - During the hearing on 27.01.2021, this Tribunal finds that the Liquidator has not attached any document to show that the 9 cents of land is owned by the Company. The liquidator has also not produced the valuation certificate issued by the valuer. The liquidator was therefore, directed to file an affidavit with proof, within a week with regard to the ownership of 9 cents of land and the certificate of the valuer on the value of the aforesaid 9 cents. The liquidator was further directed to include in his affidavit the details of the present assets of the Corporate Debtor including movable and immovable properties and its value. Considering the present circumstances of the case, on examining the 12th progress report filed by the Liquidator and the provisions under Regulation 33 of IBBI (Liquidation Process) Regulations, 2016, this Tribunal is of the opinion that it is necessary to aid the Liquidator in the process of fulfilling his duties in the process of the Corporate Insolvency Resolution. Hence, the reliefs sought by the Liquidator is to be allowed - this Tribunal extends the liquidation proceedings in the matter of M/s. Orieon Kuries and Loans Private Limited for another one year from 15.01.2021 to 15.01.2022. Application disposed off.

Summary

Issues:
Extension of liquidation proceedings, Private sale of company's land, Address recording by Registrar of Companies

Extension of Liquidation Proceedings:
The Liquidator sought an extension of the liquidation proceedings for another year due to disruptions caused by lockdown restrictions. Activities were limited, with legal actions taken against debtors pending in court. Despite unsuccessful e-auctions, a family member expressed interest in purchasing the company's land through private sale. The Registered Valuer certified the land's value at ?8 lakhs, prompting the Liquidator to request a reduction in the reserve price by 25%. The Tribunal considered the circumstances and extended the proceedings till 15.01.2022.

Private Sale of Company's Land:
The Liquidator proposed a private sale of 9 cents of land owned by the company to a specific buyer at ?6 lakhs, below the certified value. Regulations allowed for a reduction in the reserve price and private sale if e-auctions failed. The buyer's interest was personal, and the offer was within the permissible limits. The Tribunal approved the sale to the buyer, subject to regulatory compliance.

Address Recording by Registrar of Companies:
The Liquidator requested the Registrar of Companies to update the company's communication address to the Liquidator's office. The Liquidator had occupied a building on a rental basis, impacting liquidation costs. The Tribunal directed the Registrar to record the Liquidator's address for communication, emphasizing no further changes until the Corporate Insolvency Resolution Process concludes.

The Tribunal considered the Liquidator's submissions, regulatory provisions, and the necessity to facilitate the liquidation process. It allowed the extension of proceedings, approved the private sale of the company's land, and directed the Registrar to update the communication address. The judgment addressed the challenges faced during the liquidation process, emphasizing compliance with legal requirements and regulatory frameworks.