9911796707
TMI Blog2021 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... the Company in Liquidation till further orders by this Hon'ble Tribunal and (iv) to grant status quo qua sale of sheds by the Respondent, apart from other prayers. 2. The brief facts of the case are: 2.1 An application under section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as "IB Code") was admitted on 01.08.2017 filed by ICICI Bank, whereby, Corporate Insolvency Resolution Process (hereinafter referred as "CIRP") was initiated against the ABG Shipyard Limited (Corporate Debtor) appointing the Interim Resolution Professional/Resolution Professional. During the process of CIRP, no viable Resolution Plan was received and consequent upon which, this Adjudicating Authority passed an order of Liquidation on 25.04.2019 on the application moved by the Resolution Professional with approval of the Committee of Creditors. 2.2 During the process of Liquidation, Liquidator made the public announcement inviting Expression of Interest (hereinafter referred as "EoI") for participation in Liquidation sale process of assets of Company. The first advertisement for the sale of assets through public auction by way e-auction was published for the first time on 17.09. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 21.10.2020 by the Applicant. On visiting the site of the Company in Liquidation, Applicant expressed his interest to purchase vide email dated 22.10.2020 and requested the Respondent to provide reserve price for Surat Yard-II and also inquired about the reserve price including land. Applicant further requested to specify, if there were separate block of land, material, scrap and also inquired about the land area of Surat Yard- II. Since, Applicant did not receive any response from the Respondent, Applicant sent reminders vide emails dated 26.10.2020 and 27.10.2020. The Respondent vide email dated 29.10.2020 informed the Applicant that there is no bifurcation in Surat Yard-II and Surat Yard-II implying, that if Applicant is willing to purchase then Applicant shall have to purchase both the yards. Thereafter, Applicant asked for some details vide emails dated 17.11.2020 and 18.11.2020. Accordingly, Respondent sent the link for virtual data room for the documents on 28.11.2020. 2.7 It is further submitted that pending the response from the Applicant, Liquidator preferred an application i.e. IA 698 of 2020 in CP(IB) 53 of 2017 seeking permission to sale the assets of the Company b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which Applicant confirmed except metal sheds and requested the Respondent to provide the details of the buyer who purchased the metal sheds, so that the Applicant can directly deal with the said buyer. 3. On receipt of notice, Monaal Davawala appeared on behalf of the Respondent (Liquidator) on 24.02.2021, when the matter was listed for the first time on board. On the said date, Respondent requested for time to file reply. However, Advocate appearing on behalf of Applicant pressed hard for the status quo order on the assets of the Company in Liquidation in respect of Sr. No. IV parcel IV of the Second Amendment Advertisement dated 05.08.2020 inviting EoI as annexed at page 75 of the application. 4. Since the reply was not filed by the Liquidator as such, this Adjudicating Authority did not pass any status quo order on 24.02.2021, fixing the matter on 15.03.2021. On 15.03.2021, when the matter was taken up, reply of the Liquidator was not on board, though 10 days time was granted as on 24.02.2021. Learned Lawyer appearing on behalf of the Liquidator submitted that on 13.03.2021 reply was furnished to the Applicant and the same is also filed before the registry vide e-filing. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fifth auction EoI process document. Pursuant to which the Liquidator was able to sale two assets of the Corporate Debtor i.e. residential flat admeasuring 1100 sq. Ft. at 7th floor in Chrysalis Society, J.V.P.D., Vile Parle (East), Mumbai (Maharashtra) and residential flat admeasuring 900 sq. ft. at 6th Floor in Akshat Towers, Bodakdev, Ahmedabad (Gujarat). 7. It is further submitted by the Liquidator that on account of failure of five e-auctions of the Corporate Debtor, Sixth auction was initiated for sale of the assets of the Corporate Debtor in various categories and sub-categories on 19.02.2021 whereby, Liquidator was able to sell residential land at Ambetha, Gujarat only. In support of the contention, Liquidator has annexed the documents. It is further submitted that, in view of the consecutive failure of the process with regard to the assets of the Corporate Debtor and with a view to maximize the realizations from the sale of the assets of the Corporate Debtor, Liquidator filed an application before this Adjudicating Authority for seeking permission of Private Sale and the said application was allowed on 02.12.2020. 8. It is further submitted that after due consultation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase Unit-II of the Corporate Debtor situated at Surat consisting of open land, metal sheds and other fixed machineries which was not viable. The reserve price of Surat material, scrap and shed (the sale of which is sought to be declared as null and void by the Liquidator) was Rs. 168 crores at the fifth e-auction sale process, which has subsequently failed. However, Liquidator was able to sell these assets (Surat materials, scrap and sheds) for a consideration of Rs. 169.11 crores i.e. higher than the reserve price of the said asset at the last failed auction, thereby, maximizing the value of the assets and generating benefits for the stakeholders of the Corporate Debtor. 12. It is submitted by the Respondent (Respondent) that the sale of Surat material, scrap and sheds have been conducted above the reserve price of last failed auction and has reached its finality and cannot be set aside merely because Applicant wish to have purchased at the throw away price. It is further submitted by the Liquidator that Applicant of IA 136 of 2021 has gone to Hon'ble NCLAT on the same facts and grounds for setting aside the order so passed by this Adjudicating Authority for Private Sale. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sold off additionally more assets at consideration of Rs. 201.04 crores which is at much less price which reflects the manner in which the Private Sale is concluded. Thus, the entire sale is required to be cancelled as null and void. 15. Moreover, the reply in affidavit filed Respondent No. 1 (Applicant of IA 136 of 2021) has already been dealt hereinabove. Hence, it is not further reiterated. FINDINGS: 16. Heard both sides and gone through records/pleadings of IA 136 of 2021 and IA 238 of 2021 and reply made therein. The boon of contention of the Applicant is that Liquidator (Respondent of IA 136 of 2021) has sold the metal sheds, vessels and crane in Private Sale though they are not included in the notice inviting EoI as alleged by the Applicant. That apart, it is further alleged that the order of Private Sale passed by this Adjudicating Authority is of 02.12.2020 whereas the Liquidator entered into a Private Sale on 28.11.2020, which said fact was suppressed with this Adjudicating Authority. 17. It is a matter of record that on account of failure of Sixth e-auction, Liquidator has filed an application, seeking the permission for Private Sale as per Regulation 33 (2)(c) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021. 20. On perusal of the record, it is found that reserve price of the Surat material, scrap and sheds was fixed at Rs. 168 crores which the Liquidator succeeded in selling in Private Sale on the price higher than the reserve price in last failed auction at Rs. 168.11 crores. It is also to be mentioned herein that the reserve price is reflected in the Second Amendment to the Advertisement in inviting EoIs at page 75 of IA 136 of 2021 to the tune of Rs. 168 crores and its asset description and price can be seen from page 71-72 of the reply of the Liquidator, wherein the cost of ships and vessel under construction is included in the reserve price as Rs. 121 crores. Furthermore, Applicant of IA 238 of 2021 has paid total Rs. 169.11 crores i.e. higher than the reserve price. 21. However, on perusal of the Agreement, it is specifically stated in the condition 4 (c) as under: "Only after receipt of the duly executed Delivery Note by the Seller will the Surat Scrap be transferable/deliverable by the Seller to the Buyer on an "as is where is basis", "as is what is basis", "whatever there is basis" and "no recourse basis", without requiring any deed or instrument of conveyance for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained for such sale: Provided that the liquidator shall not sell the assets, without prior permission of the Adjudicating Authority, by way of private sale to- (a) a related party of the corporate debtor; (b) his related party; or (c) any professional appointed by him. (3) The liquidator shall not proceed with the sale of an asset if he has reason to believe that there is any collusion between the buyers, or the corporate debtor's related parties and buyers, or the creditors and the buyer, and shall submit a report to the Adjudicating Authority in this regard, seeking appropriate orders against the colluding parties." 23. Moreover, Hon'ble Supreme Court in Valji Khimji & Company vs. Official Liquidator [ (2008) 9 SCC] held that: "11. .....in our opinion, entertaining objections after the sale is confirmed should not ordinarily be allowed except on very limited grounds like fraud, otherwise no auction-sale will ever be completed." Also, Hon'ble NCLAT in Manjeet Commercial LLP vs. SPM Auto Pvt. Ltd. [Company Appeal (AT)(Insolvency) No. 732 of 2019] observed that: "11. However, the Appellant did not participate in the e-auction and now making vague allegati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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