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TMI Blog2018 (2) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... to the total debt amount including interest and maximum period applicable for trying the sale of the Corporate Debtor as a going concern will be only three months from the date of the order, if the process of sale as a going concern is failed during this period, then process of the sale of the assets of the company will be according to the provisions of sale of asset of the Corporate Debtor prescribed under section 33, Chapter VI of the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016. In case it is not concluded within this period, the order of this Court directing the sale of the company as a going concern shall stand set aside and corporate debtor to be liquidated in the manner as laid down in Chapter III of the Liquidation Process provided in Insolvency & Bankruptcy Code. (2) The Liquidator is further directed to issue a public announcement stating that the Corporate Debtor is in liquidation. (3) It is also ordered that copy of the order be sent to the Registrar of Companies with which the Corporate Debtor is registered. It is further declared that subject to provision of section 52, no suit or other legal proceeding shall be instituted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Professional, which will be circulated to all the Members for their review and voting through Electronic mode. The Resolution Plan was duly circulated and accordingly put to the vote. However, the same was not approved. Eight members of the CoC having a total voting share of 14.31% voted in favour of the Resolution Plan. Fifteen members having a total voting share of 84.03% voted against the Resolution Plan and one member having 1.67% voting shares abstained from voting. On 30th December 2017, he received an e-mail from Shri Pawan Kumar Agarwal, the Chief Commercial Officer of the company purported to be representing all the employees and workers of the company enclosing a Resolution Plan on their behalf. In the said e-mail he mentioned that the employees and the workmen are concerned about the continuation of their employment and livelihood as the Resolution Plan submitted by RARE ARC has been declined by the CoC and the company might face liquidation. He mentioned that employees and workers are working on the day to day basis. Today the industry is doing well, and the company has also started doing well and making profits. As such, they have developed a Resolution Plan wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personnel and the partners of the Corporate Debtor, as the case may be, shall cease to affect and shall be vested in the Liquidator. The personnel of the Corporate Debtor shall extend all assistance and cooperation to the Liquidator as may be required by him in managing the affairs of the Corporate Debtor. The Liquidator appointed by us, Shri Sumit Binani shall charge such fee for the conduct of the liquidation proceedings and in such proportion to the value of liquidation estate, assets, as may be specified by the Board. For the conduct of the liquidation proceedings, the amount shall be paid to the Liquidator from the proceeds of the liquidation estate under section 53. It is further directed that in case of difficulty in the liquidation process, the Liquidator appointed by us shall be guided by the decision of the Monitoring Committee, which shall consist of the erstwhile members of Committee of Creditors, subject to final approval of the Adjudicating Authority. Ld. Counsel representing the employees and workers of the Gujrat NRE Coke Ltd. has filed an affidavit, wherein it is stated that the Corporate Debtor Company has on its rolls 1178 employees including work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the affidavit that Hon ble Supreme Court and High Court has often directed the sale of assets of the company as a going concern with the object of preserving the employment and protecting the livelihood of its employees and workmen, and has done so even in case when the company has been lying closed for a number of years. Ld. Counsel for the employees has relied on the law laid down by the Hon ble Supreme Court in case of Allahabad Bank v. ARC Holding Ltd.[2000] 28 SCL 394. It has been further argued that the Insolvency Bankruptcy Code, 2016 has been legislated as socially beneficial legislation. We have heard the arguments of the Ld. Counsel appearing on behalf of employees and workers and Resolution Professional and perused the record. It is important to point out that section 33(7) of the Insolvency Bankruptcy Code, 2016 provides that the order of liquidation under this section shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor, except when the business of the Corporate Debtor is continued during the liquidation process by the Liquidator. On reading the provisions of the sub-section (7) of section 33 of I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2 of the Income-tax Act, 1961 provides that all the properties of the undertaking, being transferred by the demerged company, immediately before the demerger, become the property of the Resulting Company by virtue of demerger. It is further provided in sub-clause (6) of clause (19)(AA) that the transfer of the undertaking is on a going concern basis.- In Allahabad Bank (supra), Hon ble Supreme Court has held that:- in the absence of any credible material, the direction to sell the company as a going concern is not sustainable.-- The Official Liquidator for this purpose shall advertise the sale of the judgment debtor company in liquidation as a going concern as ordered by the Hon ble High Court. Such publication shall indicate that the reserve price, shall be the amount equal to the total decree including interest which has occurred up to 31.12.1999 in favour of the appellant bank and shall also have to pay the balance interest which accrues, till full payment is made. The publication shall indicate that the Purchaser shall also to pay the liabilities of other claimants in the proceedings for the liquidation of the company. Since all the parties are represented befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of this Court directing the sale of the company as a going concern shall stand set aside and corporate debtor to be liquidated in the manner as laid down in Chapter III of the Liquidation Process provided in Insolvency Bankruptcy Code. (2) The Liquidator is further directed to issue a public announcement stating that the Corporate Debtor is in liquidation. (3) It is also ordered that copy of the order be sent to the Registrar of Companies with which the Corporate Debtor is registered. It is further declared that subject to provision of section 52, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor. Provided that a suit or other legal proceedings may be instituted by the Liquidator on behalf of the Corporate Debtor, with the prior approval of the Adjudicating Authority. Above provision shall not apply to legal proceedings about such transactions, as may be notified by the Central Government in consultation with any Financial Sector Regulators. Copy of the order may immediately be communicated to the Registrar of Companies, Liquidator Shri Sumit Binani and Corporate Debtor and I.B.B.I. for information and necessary action ..... X X X X Extracts X X X X X X X X Extracts X X X X
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