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2024 (1) TMI 780 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAIConflict Between IBC and Companies Act: The contention was whether the IBC 2016 and its regulations should yield to Section 230 of the Companies Act 2013 regarding a scheme for compromise or arrangement. The Appellate Tribunal observed that these laws should be interpreted harmoniously to further the object of the IBC. Role and Actions of the Liquidator: The liquidator's actions, particularly in the valuation of assets and the handling of the liquidation process, were under scrutiny. The Appellate Tribunal noted allegations of flawed valuation, especially regarding the property in Rayagada, and the failure to include this property in the Asset Memorandum. Valuation of the Rayagada Property: A significant issue was the zero valuation ascribed to the Rayagada property by the liquidator, which was initially valued at a much higher rate. The Appellate Tribunal highlighted the importance of this property in the liquidation process and the need for its proper valuation. Section 230 Scheme Proponent Rights: The Appellate Tribunal discussed the rights of a scheme proponent under Section 230 of the Companies Act. It was noted that a bidder in the liquidation process does not have a vested right to have their resolution plan considered or approved. Stakeholders' Consultation Committee's Role: The role and decisions of the Stakeholders Consultation Committee were also a point of contention. The Appellate Tribunal noted that the approval of the secured creditors and consultation with stakeholders were essential in the process. Applicability of IBC Regulations: The Appellate Tribunal emphasized the need to follow IBC regulations in the liquidation process, including the proper valuation of assets as per Regulation 35 and the inclusion of disputed assets as per Section 36(3)(e). Requirement for Fresh Valuation and Inclusion of Rayagada Property: The Appellate Tribunal concluded that a fresh valuation of the assets, including the Rayagada property, was necessary. It was deemed crucial for maximizing the value of the assets and ensuring fairness in the liquidation process. Maintainability of the Appeal: Finally, The Appellate Tribunal held that the appeal was not maintainable because the appellant, being a bidder, was not a stakeholder in the corporate debtor and thus not an aggrieved party as per the IBC. On going through the impugned order passed by the Adjudicating Authority/NCLT, Division Bench II, Chennai, in directing a ‘fresh valuation of the assets’ of Corporate Debtor, including the ‘Rayagada Property’, as per Regulation 35(2) of the IBBI (Liquidation Process) Regulations, 2016 and consequently, to update the ‘Asset Memorandum’ and thereafter, to invite the ‘Schemes’, from the ‘Prospective Scheme Proponents’, as per Section 230 of the Companies Act, 2013, are free from any legal flaws. Appeal dismissed.
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