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TMI Blog2020 (5) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. (K.T.C. Foods) and was admitted by the Tribunal by order dated 29.08.2018. Since no resolution plan was received till 15.04.2019, the Committee of Creditors (COC) in its meeting held on 25.04.2019 passed resolution with 100% voting rights approving liquidation of K.T.C. Foods. Vide order dated 31.05.2019, K.T.C. Foods was directed to be liquidated in the manner as laid down in Chapter III of the Code and Shri Anup Kumar Singh then Resolution Professional (RP) was appointed as the Liquidator. It is submitted that after inviting proof of claims, receiving the claims, preparing the list of stakeholders and submitting the preliminary report and asset memorandum, it was found that there was one claim in Form D by financial creditor .e. Oriental Bank of Commerce, NCB Branch, Haryana, as well as claims of 8 operational creditors. It is stated that vide e-mail dated 05.10.2019, Oriental Bank of Commerce relinquished their security interest. It is further submitted that during the CIRP, the valuation reports were obtained from two valuers and since it came to the notice of then RP that the estimates of the values provided are significantly different, the then RP in compliance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e possession of all assets of K.T.C. Foods as a going concern to Shiv Shakti. 7. Copy of compliance certificate in Form H and final report are stated to be attached as Annexure M of the application. The following reliefs have been sought:- "a. That the Hon'ble Tribunal may graciously be pleased to approve the closure of Liquidation Process of the Corporate Debtor under Regulation a5(3)(a) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and Sale of Corporate Debtor as a Going Concern to M/s. Shiv Shakti Inter Globe Exports Private Limited, the highest bidder without any liabilities including contingent liabilities and with immunity from existing litigations, if any, against the Corporate Debtor by way of E-Auction at a total consideration of INR 18,45,86,646/- (Rupees Eighteen Crores Forty Five Lacs Eighty Six Thousand Six Hundred and Forty Six only); b. That the Hon'ble Tribunal may graciously be pleased to approve the aforesaid sale of Corporate Debtor without its dissolution; c. That the order be passed that after distribution of the proceeds of the Sale of Corporate Debtor as a Going Concern as per order of priority provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of hearing that Regulation 45 of the Liquidation Process Regulations 2016 provides for closure of the liquidation process of the corporate debtor where the corporate debtor is sold as a going concern. The provisions of Regulation 45 of the Liquidation Process Regulations 2016 as under:- "45. Final report prior to dissolution. (1) When the corporate debtor is liquidated, the liquidator shall make an account of the liquidation, showing how it has been conducted and how the corporate debtor's assets have been liquidated. (2) If the liquidation cost exceeds the estimated liquidation cost provided in the Preliminary Report, the liquidator shall explain the reasons for the same. (3) [The liquidator shall submit an application along with the final report and the compliance certificate in form H to the Adjudicating Authority for - (a) closure of the liquidation process of the corporate debtor where the corporate debtor is sold as a going concern; or (b) for the dissolution of the corporate debtor, in cases not covered under clause (a).]" 12. We find that Regulation 45(3) of the Liquidation Process Regulations 2016 was amended by the Insolvency and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 387/2019 in C.P. (IB) No. 136/Chd/Hry/2018 Chandigarh Bench 3 Date of initiation of liquidation 31.05.2019 4 Date of appointment of liquidator 31.05.2019 5 Date of commencement of CIRP 07.09.2018 6 Name of RP during CIRP and his registration No. as IP Anup Kumar Singh IBBI/IPA-001/IP-P00153/2017-2018/10322 7 Name of Liquidator and his registration No. as IP Anup Kumar Singh IBBI/IPA-001/IP-P00153/2017-2018/10322 8 Date of Publication of Public Announcement under Form B 04.06.2019 9 Date of Intimation to Registry and Information Utility, if any, about commencement of Liquidation N.A. 10 Date of handover of charge by RP 31.05.2019 11 Date of submission of compliance, if any, directed by AA in the liquidation order and its particulars N.A. 12 Date of appointment of registered valuers, if any 17.12.2018. Appointment of Two Valuers namely Adroit Technical Services Pvt. Ltd. And LSI Financial Services Pvt. Ltd. However, due to significant different in the valuation of the Corporate Debtor the undersigned appointed a Third Valuer namely, Crest Capital Group Private Limited on 12.03.2019. Pursuant to Regulation 35(1) of the Insolvency and Bankruptcy Board of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realized One tranche. 31 Date of second realization N. A. 32 Date of first distribution 27.11.2019 33 Date of second distribution N. A. 34 Date of submission of Quarterly Progress Report-I (FY-1) 15.07.2019 35 Date of submission of Asset Sales Report to AA 29.11.2019 36 Date of submission of Quarterly Progress Report-II 14.10.2019 37 Date of submission of Quarterly Progress Report-III N.A. 38 Date of submission of Quarterly Progress Report-IV & Audit Report N.A. 39 Date of submission of Quarterly N. A. 40 Progress Report-I (FY-2) Date of submission of Quarterly Progress Report-II N.A. 41 Date of submission of Quarterly Progress Report-III N.A. 42 Date of submission of Quarterly Progress Report-IV & Audit Report N.A. 43 Date of intimation to statutory authority as applicable. a) PF b) ESI c) Income Tax Dept d) Inspector of Factory e) GST/VAT f) Others 04.06.2019. Date of Public Announcement for Intimation Statutory Authority and relevant authorities. 44 Date of application to AA as per Reg 46(1) N.A. 45 Date of transfer of undistributed/unclaimed assets or proceeds of liquidation to public Account of India N.A. 46 Date of intimation as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquishment of security interest Section 38(5) Withdrawal/modification of claims T+44 N.A. Reg. 30 Verification of claims received under Regulation 12(2)(b) T+60 30.07.2019 Reg. 31A Constitution of SCC T+6 N.A. (Since Amended Regulations were not applicable) Section 40(2) Intimation about decision of acceptance/rejection of claim T+67 30.07.2019 Reg. 31(2) Filing the list of stakeholders and announcement to public T+75 Filing of List of Stakeholder: 13.08.2019 Public Announcement of List of Stakeholders: 20.08.2019 Reg. 13 Preliminary report to the AA T+81 N.A. Reg. 34 Asset Memorandum T+75 13.08.2019 Reg. 15(1), (2), (3), (4) and (5), and 36 Submission of progress reports to AA; Asset Sale report to be enclosed with every Progress Report, if sales are made Q1+15 15.07.2019 Q2+15 14.10.2019 Q3+15 N.A. Q4+15 N.A. 15th April N.A. Proviso to Reg. 15(1) Progress report in case of cessation of liquidator Date of cessation +15 N.A. Reg. 37(2, 3) Information to secured creditors Date of intimation +21 N.A. Reg. 42(2) Distribution of the procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh IP Registration No. : IBBI/IPA-001/IP-P00153/2017-2018/10322 Address as registered with the Board: 162/d/702, Lake Gardens, Kolkata, West Bengal, 700045 Email id as registered with the Board: anup_singh`sumedhamanagement.com Date: 28.11.2019 Place: Kolkata" 16. It is stated in Column 6 of Form H that there is no deviation/non-compliance with the provisions of the Code, Regulations made or Circular issued thereunder. 17. We find that in Column 2 Sr. No. 16, the details of date of date of constitution of Consultation Committed were to be given. It is stated in Form H that the column is not applicable since the liquidation process commenced with 31.05.2019 and the Liquidation Process Amendment Regulations 2019 were notified on 25.07.2019. Reference has been made to IBBI Circular No. IBBI/LIQ/024/2019 dated 26.08.2019 (supra) clarifying that the provisions of the Liquidation Process Amendment Regulations 2019 are not applicable to the liquidation processes. We however, find that in the present case, the application is filed under Regulation 45(3)(a) read with Regulation 32A and 33(1) of the Liquidation Process Regulations 2016. Regulation 32A relating to selling as a going con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t date, notwithstanding pendency of any application for avoidance of transactions under Chapter III of Part II of the Code, before the Adjudicating Authority or any action thereof: Provided that where the sale is attempted under sub-regulation (1) of regulation 32A, the liquidation process may take an additional period up to ninety days.] (2) If the liquidator fails to liquidate the corporate debtor within [one year], he shall make an application to the Adjudicating Authority to continue such liquidation, along with a report explaining why the liquidation has not been completed and specifying the additional time that shall be required for liquidation." 19. It has also been submitted that as per Clause 9.3 of the e-auction process information document dated 05.11.2019, it is stated that "the Liquidator has filed an application with Hon'ble NCLT Chandigarh Bench seeking directions on account of transactions identified by the auditor as per his audit report. Any amount recovered from the respondents upon Hon'ble NCLT directions, will be distributed to the financial creditors only and will not form part of the assets to be taken over by the successful bidder." It is furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference is also made to Regulation 32A and 33(1) of the Liquidation Process Regulations 2016. However, none of these provisions provides for any approval by the Tribunal of the sale as a going concern to the highest bidder. Therefore, the directions sought for cannot be granted. On similar considerations, the prayers at 'c' & 'e' sought for in the application cannot be granted. As regards prayer at 'd', the necessary action under the Companies Act, 2013 may be taken. 22. In view of the above discussion, and in view of the provisions of Section 54 of the Code and Regulations 44 and 45 of the Liquidation Process Regulations 2016, we direct that since the corporate debtor K.T.C. Foods is sold as a going concern, the liquidation process of the corporate debtor K.T.C. Foods Private Limited be closed without dissolution of K.T.C Foods Private Limited and that Application 510/2019 for avoidance of transactions under Chapter III/ VI of Part II of the Code shall continue to be adjudicated upon by the Adjudicating Authority. CA No. 1189/2019 is accordingly disposed. Copy of this order be sent to the Liquidator, Shiv Shakti and all the respondents in CA No. 510/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the corporate debtor as a going concern and therefore, Shiv Shakti has acquired all its assets and liabilities and when the business of the corporate debtor is being sold on going concern basis, then it has a presumption that sale will be with assets and liabilities. Directions have therefore, been sought against Shiv Shakti for making the payment of claim to the applicant. 27. During the course of the hearing, the learned counsel for the applicant has relied on judgment dated 26.09.2000 of the Hon'ble Supreme Court in Allahabad Bank Vs. ARC Holding Ltd. and others and CP(IB) No. 182/KB/2017 dated 11.01.2018 of NCLT Kolkata Bench in the matter of Gujarat NRE Coke Limited. On a careful consideration, we find that the judgment of the Hon'ble Supreme Court in Allahabad Bank Vs. ARC Holding Ltd. and others (supra) in a case relating to Official Liquidator appointed by the Hon'ble High Court, was relied upon by the Hon'ble NCLT Kolkata in CP (IB) No. 182/KB/2017 and it was directed that the Liquidator shall try to dispose of the corporate debtor company as a going concern after publication of notice in newspaper with the reserve price which shall be equal to the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X
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