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TMI Blog2022 (7) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... defeat the very object for which the provisions have been framed. This Bench holds that to enable a Member of Stakeholders Consultation Committee to meet the mandate under Regulations 31-A(1) and as laid down in 31-A(5), the copy of the valuation report needs to be shared with the applicant i.e. Member of Stakeholders Consultation Committee, as the same would be crucial in determining the reserve price of the asset of the corporate debtor. Regarding confidentiality of the document, the Liquidator can take an undertaking from the applicant to maintain the same as per his powers under Regulation 7(2)(h) of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, read with paragraph 21 of First Schedule thereto. This could be in the form of a non-disclosure agreement in which Liquidator could be indemnified in case information was not kept strictly confidential. Application allowed. - IA No.46/2022 in CP (IB) No.340/Chd/Pb/2018 (admitted) - - - Dated:- 8-7-2022 - HON BLE MR. HARNAM SINGH THAKUR , MEMBER ( JUDICIAL ) And HON BLE MR. SUBRATA KUMAR DASH , MEMBER ( TECHNICAL ) For the Applicant : Ms. Jyoti Sareen , Advocate For the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uers under the provisions of Regulation 31A(1) and 31A(5) of the IBBI (Liquidation Process) Regulations, 2016. Before proceeding further with e-auction, it is mandatory for the Liquidator to supply a copy of fresh valuation reports to the ex-Director (applicant) and other members of SCC. 4. The Respondent/Liquidator, in his reply filed by Diary No.00602/01 dated 09.02.2022, has stated that there is no provision in the Code to challenge the decision of the Liquidator on valuations conducted during the CIRP period in terms of Regulation 35 of Liquidation Process Regulations. The Applicant has no locus standi to challenge the reserve price fixed for the sale of assets of the corporate debtor or to seek copies of the valuation reports. The purpose of valuation reports is not Res-Integra and has been settled by the Hon'ble Supreme Court. The Law is settled that valuation being a question of fact cannot be challenged. Answering respondent is conducting the liquidation process in accordance with provisions of the Code and underlying Regulations. It is further stated that the applicant participated in the Stakeholders Consultation Committee and cannot question the fixation of reserv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. The learned counsels for the Applicant and respondent-Liquidator have also filed short submissions by Diary No.0060/3 dated 23.06.2022 and Diary No.00060/4 dated 23.06.2022 respectively, citing the Regulations and judicial decisions relied upon. Both the parties have mostly repeated the contentions mentioned in their earlier written submissions. 8. We have gone through the arguments along with the submissions filed by all the parties and have perused the records carefully. 9. In the present application, the issue for adjudication before this Bench is whether the Liquidator is mandated under the Code to share a copy of the valuation report with the Applicant being an ex-director, shareholder, guarantor of the corporate debtor and member of stakeholders' consultation committee. 10. In this context, the relevant Regulation of IBBI (Liquidation Process) Regulations, as amended on 30.09.2021,are extracted below:- Regulation 31-A Stakeholders' Consultation Committee (as amended up to 30.09.2021): The Liquidator shall constitute a consultation committee within sixty days from the liquidation commencement date, based on the list of stakeholders prepare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute and which effectuate the object of the legislature. If an expression is susceptible of a narrow or technical meaning, as well as popular meaning, the court would be justified in assuming that the legislature used the expression in the sense which would carry out its object and reject that which renders the exercise of its power invalid. 10.2 We are also aware of the decision of our Coordinate Bench of NCLT, Ahmedabad Bench, in the case of Hemant Shantilal Shah (Supra), which made the following observations:- In the present case it is the valuation report which is in question. Whether it can be shared by Resolution Professional with ex-directors, specially when the ex-management alleges and apprehends that properties of the corporate debtor are being valued and offered at throw away price. In our view, the ex-management is the appropriate concerned party to comment on the valuation of properties of corporate debtor. The corporate debtor is the body of Ex-management and they were in control and handling the same till CIRP initiation. It would be prejudicial if the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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