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TMI Blog2021 (6) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicants are required to approach the Authorities concerned for exemptions, if any, and the said Authorities will decide the issue in accordance with the law. - I.A. No. 741 of 2021 in C.P. (IB) No. 1319/MB/2017 - - - Dated:- 21-6-2021 - Janab Mohammed Ajmal, Member (J) And V. Nallasenapathy, Member (T) For Applicant: Pratap Sampat, Learned Senior Counsel and Aarti Suvarna, Advocate For Liquidator: Kunal Kanungo, Tanushree Sogani and Atishay Jain, Advocates ORDER V. Nallasenapathy, Member (T) 1. The Applicants herein, being the successful bidders in the auction sale of the Corporate Debtor as a going concern, are before us with the following prayers: a) That the Hn. Bench may approve and accept their bid for the amount of ₹ 15.30 Crores in terms of the Auction Sale conducted on 18.03.2021 for the sale of M/s. Enviiro Bulkk Handling Systems Pvt. Ltd. (under Liquidation) as a going concern b) That the Hn. Bench may consider and grant the reliefs as more particularly stated in Para 8(b) of the Application and as stated in the bid offer of the Applicants. c) That upon compliance of the terms of auction sale, all concerned authorities and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vii. Accordingly, the Liquidator published the announcement of e-auction of the Corporate Debtor as a going concern on 03.03.2021 as per Regulation 12(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Liquidation Regulations), inviting bids for the Corporate Debtor. viii. The Applicants in response to the said e-auction, submitted an expression of interest along with 5% upfront payment of ₹ 76,50,000/- on 06.03.2021 and subsequently participated in the e-auction held on 18.03.2021, wherein the Applicants were declared as the successful bidders/the sole eligible bidder. The Applicants have submitted a bid amount of ₹ 15,30,00,000/-. The Applicants paid 20% of the bid amount on 23.03.2021, aggregating the payment to 25% of bid amount which is ₹ 3.825 Crores. ix. The Liquidator then sent a Letter of Intent to the Applicants stating that the Applicants are bound to implement the successful bid. x. The Applicants have mentioned consequential reliefs in their offer, which are prayed to be sanctioned under the present Application, for smooth and successful sale of the Corporate Debtor as a going concern. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 2013, and direct the Registrar of Companies to do all such acts, deeds and things that are necessary to appoint the consortium nominee individuals as directors of the corporate debtor, who are individuals recommended by the consortium, in order to enable the company to file relevant returns required by applicable law; h) A direction be issued that all subsisting consents, licenses, approval, rights, entitlements, benefits and privileges whether under law, contracts, lease or license, granted in favour of the corporate debtor or to which the corporate debtor is entitled to shall notwithstanding any provision to the contrary in their terms, be deemed to continue without disruption for the benefit of the corporate debtor and all additional licenses, registrations and consents to operate required by the corporate debtor be made available immediately on payment of the entire bid amount. i) A direction be issued that the corporate debtor shall have a right to review and terminate any contract that was entered into prior to the date of liquidation order. j) A direction be issued that all the benefits availed by the corporate debtor as MSME company, will be continued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 15.30 Crores and accordingly the e-auction process has been successfully completed. With respect to the consequential reliefs sought by the Applicants, the Liquidator has submitted that the Adjudicating Authority has power to grant such reliefs and such reliefs maybe granted as per the discretion of the Tribunal. 5. It is submitted that unless the said reliefs are granted, the Corporate Debtor cannot function as a going concern and the revival and working of the Company as a going concern will be adversely affected post its release from the liquidation. 6. We have heard the learned counsel appearing for the Applicant as well as the Liquidator. It would be beneficial to refer to the following paras of the Judgment of this Bench in Gaurav Jain V/s. Sanjay Gupta-(IA No. 2264 of 2020 in CP (IB) No. 1239/MB/2018-decided on 09.03.2021): 20. Regulation 32 of the Liquidation Process Regulations provides for the realisation of assets and the same is extracted below: [Sale of Assets, etc. The Liquidator may sell- a) an asset on a standalone basis; b) the assets in a slump sale; c) a set of assets collectively; d) the assets in parcels; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d buyer (c) Transfer of the going concern of the corporate debtor to the buyers (d) Continuation of the authority, powers and obligations of the Liquidator to complete the liquidation process as provided under the Code and the regulations including the control, operations and continuation of the liquidation bank account of the corporate debtor, (e) Payment to stakeholders in accordance with section 53 from the liquidation bank account, and (f) Protection of the intended buyer from all claims and liabilities pertaining to the period prior to the sale of the corporate debtor as a going concern. In such a case, the final report of Liquidator, as required under clause (3) of regulation 45, shall form part of the application for the closure of the liquidation process of the corporate debtor and not for the dissolution of the corporate debtor to the AA to be made under section 54. b. The regulations may provide another option of sale, that is, sale of business of the corporate debtor as a going concern. It will be only sale of business, not the corporate debtor which will be liquidated in accordance with the regulations. In this case, the assets and liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t following are the advantages of selling the Corporate Debtor as a going concern : a. The entity i.e., the Corporate Debtor itself gets transferred; b. The equity shareholding gets transferred or extinguished and new shares are issued; c. The purchaser is expected to carry on the business of the Corporate Debtor after the sale of assets is confirmed; d. The existing employees will have a chance to continue in their employment. 30. The decision to sell the Corporate Debtor as a going concern is taken by the Liquidator himself or in consultation with the Creditors/stakeholders and the proceeds from the sale of assets are going to be utilised for distribution to the Creditors in the manner specified under Section 53 of the Code. Hence all the Creditors of the Corporate Debtor get discharged and the assets are transferred free of any encumbrances. The legal entity of the Corporate Debtor however survives. 31. In the case of sale as a 'going concern' the Corporate Debtor will not be dissolved in terms of Section 54 of the Code. The assets with the attendant, claims, limitations, licenses, permits or business authorisations, remains in the Company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital of the Corporate Debtor shall stand extinguished. f. The Registrar of Companies (RoC) concerned is directed to show the status of the Company as Active from Liquidation in their records. g. The Applicants are at liberty to reconstitute the Board of Directors as per provisions of the Companies Act, 2013 and the appropriate filings may be effected before the RoC concerned. h. All subsisting licenses, approvals, rights, entitlements, benefits, privileges, contract, lease etc., wherein the Corporate Debtor is entitled/involved will continue, subject to payment of statutory dues with effect from this date. i. Prayer h is allowed subject to the payment of renewal fees, if any, from this date to the licensing authorities. j. Prayers i j are allowed. k. In respect of the prayers k l the Applicants are required to approach the Authorities concerned for exemptions, if any, and the said Authorities will decide the issue in accordance with the law. l. In respect of the prayers m n , since the Applicants are the successful bidders in the auction sale, they become the owners of the assets mentioned in the auction sale. The secured creditors are d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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