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TMI Blog2022 (5) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... facts leading to filing the above Application by the Applicant are as follows: i. The Liquidation order was passed by this Tribunal on 06.11.2019 wherein C.A. Devang P. Sampat was appointed as the Liquidator of the Corporate Debtor to complete the Liquidation Process. ii. On 26.02.2021 the Applicant submitted an EDM of Rs. 50,00,000/- as per the requirements for participating in the e-auction which was scheduled on 03.03.2021. The Applicant was declared as the highest bidder of the Corporate Debtor under Liquidation as a going concern with a bid amount of Rs. 4,65,00,000/-, whereby he was declared as the successful bidder by the Liquidator. Further, a letter of intent was issued to the Applicant on 19.05.2021 by the Liquidator as per the requirements of the banker and on the request of the Applicant. iii. On 31.05.2021 in order to complete the sale the Applicant paid the entire remaining consideration of Rs. 4,15,00,000/- along with an interest of Rs. 10,09,000/-. The same was acknowledged by the Liquidator in his email dated 01.06.2021. iv. The Applicant submits that he wanted to make full consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Liquidator can not deviate from the e-auction process document on the basis of which successful bidder have relied. vii. The Applicant relied upon the matter of Topworth Pipes and Tubes Pvt. Ltd. as per which the Hon'ble NCLT, Mumbai granted various concessions/benefits to the Applicant, when the Liquidator has no objection in granting the said benefit. Whereby the Applicant has requested the Liquidator through letter for grant of certain benefits and concessions which will ensure smooth functioning of business of Corporate Debtor to which Liquidator never replied. viii. Therefore, this Application is preferred by the Applicant to grant certain benefits and concessions to ensure smooth running of business of Corporate Debtor as going concern. 3. The Learned Liquidator/Respondent opposed the above Application by raising the following contentions in his reply: i. The Liquidator in Miscellaneous Application No. 2644 of 2019 approached the Tribunal for seeking directions for Liquidation which was approved by the Tribunal on 06.12.2019. ii. The Liquidator had filed Interlocutory Application 1315 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefits demands are clear violations of the process documents and power of the respondents. The entire e-auction was as per provision of the Code including but not limited to the regulation 32A of the Insolvency and Bankruptcy Board of India (Liquidation) Regulations, 2016. viii. The Applicant by an email dated 31.05.2021 accused the liquidator that he is trying to impose the clause of liability, which was not mentioned anywhere in e-auction document and further referred that as per the Regulation 32A of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016 and in order to qualify the acquisition of liability, the act specifically and mandatorily requires the liquidator to identify all such liability which is not found anywhere in e-auction process documents. Replying to the same the Liquidator via an email dated 01.06.2021 reply to the allegations of the applicant and the respondents has been repeatedly informed the liquidation as a going concern of the Corporate Debtor is in accordance with the process documents and code. The Applicant has misread or have self-assumed his so-called query which is not tenable for which the Liquidator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraphs 3.2.1 and 4.2.1 of the afore-noted discussion paper amply specified that all assets and liabilities, which constitute an integral business of the Corporate Debtor Company would be transferred together and the consideration paid must be for the business of the Corporate Debtor. We conclude that Sale of a Company as a 'Going Concern' means sale of both assets and liabilities, if it is stated on 'as is where is' basis...." 7. Similarly, the coordinate bench of NCLAT, Chennai Bench in its order dated 15.02.2022 in I.A./1215/CHE/2021 in CP/699/IB/2017 in M.S. Viswanathan Vs. Pixtronic Global Technologies Pvt. Ltd. by relying on the above judgement of the Hon'ble NCLAT in M/s. Visisth Services Limited Vs. S.V. Ramani in Company Appeal (At) (Insolvency) No. 896 of 2020 clearly held that the Sale of Corporate Debtor as a 'Going Concern 'as is where is' basis under Regulation 32 A of the IBBI (Liquidation Process) Regulations, 2016 and the Code means sale of assets as well as liabilities and not assets sans liabilities. 8. However, the learned counsel appearing for the Petitioner relied on the judgment of the Hon'ble NCLAT in M/s. Shiv Shakti In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Tribunal may graciously be pleased to approve the closure of Liquidation Process of the Corporate Debtor under Regulation 53 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 in Section 53 of the Insolvency and Bankruptcy Code, 2016, the remaining unpaid outstanding liabilities of the Corporate Debtor shall be extinguished; 7 Company Appeal (AT) (Insolvency) No. 650 of 2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and would be borne by the successful bidder. 13. It was also made it very clear to the auction purchaser in the bid documents that the liquidator does not take or assume any responsibility for any dues, statutory or otherwise, of the Company, including such dues, if any, which may affect transfer of the liquidation assets in the name of the Successful Bidder and such dues, if any, will have to be borne/paid by the Successful Bidder. 14. Similarly, the liquidator also put the Applicant notice that the bidders prior to submitting the bid should make their independent inquiries regarding the encumbrances, title of property claims/right/dues/affecting the property, inspect the property at their own expenses and satisfy themselves. The date and time of inspection of the property will be any time at site email Mr. CA Devnag P. [email protected]. 15. Therefore, it is very clear from the above facts that the auction purchaser was put on notice regarding all the above liabilities. The Hon'ble NCLAT in M/s. Visisth Services Limited Vs. S.V. Ramani, after discussing paragraphs 3.2, 3.2.1, 3.2.2, 4.2 and 4.2.1 of the IBBI discussion paper of Corporate Liquidation Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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