9911796707
TMI Blog2022 (2) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... /2018 whereby and where under the Application filed by Mr. Anup Kumar Singh (Respondent No. 3 herein) through Liquidator in the matter of K.T.C. Foods Pvt. Ltd (Respondent No. 1 herein) to approve the closure of the liquidation process of K.T.C. Foods Pvt. Ltd. under Regulation 45 (3)(a) read with Regulation 32A and 33(1) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 whereby the prayer made in the Application was for directions to Respondent No. 2 to make the payment of claim. The said Application was rejected. 2. The facts giving rise to this Appeal are as follows: i) The Appellant (Operational Creditor) is a commission agent under the name and style of M/s Ashok Kumar and Brothers. The Corporate Debtor is an exporter and doing business of exporting rice and paddy. The Corporate Debtor approached the Operational Creditor for the supply of paddy. ii) The Appellant (Operational Creditor) was regularly supplying paddy to the Corporate Debtor from the year 2012 and the last such consignment was delivered on 09.11.2015. The Corporate Debtor had been making payments partly and since April 2017, the payments became irregular and in small amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent No. 2 has already remitted the entire bid value of Rs. 18,45,86,646/- under e-auction process and the Respondent No. 2 has acquired all its assets and liabilities but through the impugned order dated 18.05.2020, the Ld. Adjudicating Authority has rejected the prayer for directions to Respondent No. 2 to make the payment of claim to the Applicant (Appellant herein). Hence this Appeal. Submissions on behalf of the Appellant 3. The Learned Counsel for the Appellant during the course of argument and in his memo of Appeal along with Written Submissions submitted that the Liquidator in its Application i.e. C.A. No. 1189 of 2018 had sought the closure of the liquidation process and sought the sale of the Corporate Debtor as a going concern without any liabilities. 4. It is further submitted that the Liquidation Process Amendment Regulation, 2019 was notified on 25.07.2019. In reference to IBBI Circular No. IBBI/LIQ/024/2019 dated 26.08.2019 clarifying, that the process of Liquidation Process Amendment Regulation, 2019 is not applicable to Liquidation Process before 25.07.2019. The date of Liquidation order in the present matter was passed on 31.05.2019. 5. It is further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n process as prescribed under the law. In response to the public advertisement, the Appellant lodged its claim and the same was duly admitted by the Liquidator. 11. It is further submitted that the liquidation process progressed in compliance with the IBBI (Liquidation Process) Regulations, 2016 and further summary of Valuation Reports received during the CIRP Period reflected the Fair Value at 24.63 crores and Liquidation Value at 18.45 crores. The Liquidator conducted an E-auction sale and accordingly a company named Shiv Shakti Inter Globe Exports Pvt. Ltd. (Respondent No. 2) participated in the e-auction and was declared as the highest bidder for its successful bid for an amount of Rs. 18,45,86,646/- being 100% of the reserve price. So, in view of the same, the sale was completed and accordingly proceeds were distributed as stipulated under Section 53 of the IBC. 12. It is further submitted that subsequently, the Liquidator (Respondent No. 1) filed an application under Regulation 45(3) (a) read with Regulation 32A and Regulation 33(1) of IBBI (Liquidation Process) Regulations, 2016 with a specific prayer to approve the sale of the Corporate Debtor as a going concern without a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be, in our opinion, thoroughly unreasonable to foist the liability on a purchaser without first letting him know prior to the sale about such liability. Enquiries at site must have been made by the ultimate purchaser before he offered his bid. The purchaser could have been informed there of the encumbrances. He could have also been told about it prior to his depositing the balance sale consideration. 26. At this stage I would like to state that the phrase "as it where is basis" does not include any property being sold or demised with a defective title but refers to the state of the property at the time it is sold. eg: with tenants, occupants structures and so on." 15. It is further submitted that the sale of a company as a going concern, provides the leeway to define the company as eligible to be liquidated with its whole assets. Going by the prevailing law and terms of e-auction notice, the present owner be given a clean slate and be exempted from all pre-liquidation liabilities. 16. It is further submitted that claims of third parties has to be distributed in the manner stated in Section 53 of the IBC. It is submitted that allowing claims or liabilities is de hors the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought for by the Appellant claiming the amount against the Respondent No. 2 is not maintainable and as such no relief can be granted to the Appellant. 20. It is further submitted that Section 53 of the Code is the substantive provision which provides distribution of assets. Section 53 of the Code does not distinguish or provide different mechanism for distribution of assets when a company is sold as a going concern without dissolution or when a company is dissolved. Thus, in the absence of any statutory provisions governing distribution of assets where a company is sold as a going concern under liquidation, relief claimed by the Appellant is not maintainable. Based on these submissions the Appeal is fit to be dismissed. Submissions on behalf of the Respondent No. 3 21. The Learned Sr. Counsel for the Respondent No. 3 during the course of argument and in his Reply Affidavit along with Written Submissions submitted that on 05.11.2019, the Respondent No. 3 issued a sale notice for invitation of expression of interest for e-auction of Respondent No. 1 company to be sold as a going concern per Regulation 32(e) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er FORM-B, being an Operational Creditor before the Interim Resolution Professional along with an affidavit and documents required to furnish to prove my claim for an amount of Rs. 5,49,73,699/- which includes Rs. 3,43,21,069/- due as Principal amount and Rs. 2,06,52,630/- due as interest on the delayed payment. From the perusal of the Minutes of the Second Meeting of the Committee of Creditors dated 23.10.2018 clearly admits the aforesaid claim of the Appellant/Operational. It is also an admitted fact that the CIRP process was being conducted, since there was no Resolution Plan received till 15.04.2019, the Committee of Creditors in its meeting held on 25.04.2019 passed resolution with 100% voting rights approving liquidation of the Respondent No. 1 Company/Corporate Debtor. The Ld. Adjudicating Authority passed the liquidation order vide its order dated 31.05.2019 (Annexure A-5 at page 83 to 89 of the Appeal). The valuation reports were obtained which showed the fair value at Rs. 24.63 crores and liquidation value of the Corporate Debtor/Respondent No. 1 Company at Rs. 18.45 crores. The Respondent No. 2 has already remitted the entire bid value of Rs. 18,45,86,646/- under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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