9911796707
TMI Blog2023 (1) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate Debtor) by order dated 12.03.2019. An order was passed on 07.02.2020 to liquidate the Corporate Debtor and the Respondent No.1 was appointed as the liquidator of the Corporate Debtor. The liquidator issued seven public announcements for the sale of the Corporate Debtor as a going concern under Regulation 32A of the IBBI (Liquidation Process) Regulations, 2016. Although during the second e-auction process, second lot of the then Asset Blocks were sold successfully, however, the Corporate Debtor could not be sold as a going concern. The liquidator published the 8th auction notice on 21.01.2022, certain inventories of the Corporate Debtor consisting mainly of finished goods were successfully sold. 11th public announcement dated 15.05.2022 was issued by the Liquidator for sale of the rest of the unsold assets of the Corporate Debtor. On 04.03.2022, 4th Stakeholders' Consultation Committee meeting took place where the Liquidator updated the Stakeholders' Consultation Committee with respect to the liquidation process of the Corporate Debtor. Certain suggestions were received in the meeting regarding the manner of sell of the assets. The State Bank of India indicated that the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jindal Stainless Limited' were opened on 16.06.2022 in open Court and the Adjudicating Authority noted that the Respondent No.2 has submitted a bid of Rs.61.05 Crores for the properties, whereas 'M/s. Jindal Stainless Limited' has submitted a bid of Rs.52.50 Crores. The Adjudicating Authority by the order dated 16.06.2022 confirmed the sale by private treaty in favour of the highest bidder i.e. Respondent No.2- 'Laser Solar LLP' and directed the liquidator to take further steps in accordance with law. 'M/s. Jindal Stainless Limited' made a request before the Adjudicating Authority to stay the confirmation for 48 hours to see if 'M/s. Jindal Stainless Limited' wanted to match the offer. The said prayer was declined. The Appellant who is a Financial Creditor of the Corporate Debtor and is also 36% shareholder in the Shareholders' Consultation Committee has filed this Appeal challenging the order dated 16.06.2022. 4. We have heard Shri Vaibhav Gaggar, Learned Counsel for the Appellant, Shri Rishav Banerjee, Learned Counsel for the Respondent No.1 and Shri Abhijeet Sinha, Learned Counsel for the Respondent No.2. We have also heard Learned Counsel for the other Respondents. 5. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Adjudicating Authority, liquidator has informed that Stakeholders' Consultation Committee has already rejected the proposal of private sale and has formed an opinion that an Application has to be filed before the Adjudicating Authority for revaluation of the Corporate Debtor. 7. Shri Abhijeet Sinha, Learned Counsel appearing for the Respondent No.2 refuting the submissions of the Counsel for the Appellant submits that in spite of several public auctions, no bidder came to take the Corporate Debtor. The Stakeholders' Consultation Committee in its minutes has also noted that the offer which was being received before the Adjudicating Authority where between range of Rs.50 Crores to Rs. 55 Crores whereas sale in favour of the Respondent No.2 has been confirmed of Rs.61.05 Crores. It is submitted that the Appeal has neither been filed by the Liquidator nor by 'M/s. Jindal Stainless Limited' and the Appellant has also not brought before this Tribunal any prospective buyer who can submit a better offer than one given by the Respondent No.2. After various failed attempts in auction process, the Adjudicating Authority thought it fit to accept the private bid for which there is no bar in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'private sale'. Clause (2) of Schedule-I is as follows:- "2. PRIVATE SALE (1) Where an asset is to be sold through private sale, a liquidator shall conduct the sale in the manner specified herein. (2) The liquidator shall prepare a strategy to approach interested buyers for assets to be sold by private sale. (3) Private sale may be conducted through directly liaising with potential buyers or their agents, through retail shops, or through any other means that is likely to maximize the realizations from the sale of assets. (4) The sale shall stand completed in accordance with the terms of sale. (5) Thereafter, the assets shall be delivered to the purchaser, on receipt of full consideration for the assets, in the manner specified in the terms of sale." 11. Present is a case where assets were notified for public auction. Last public auction was notified on 01.06.2022 by notice dated 15.05.2022. Auction was to be held in four lots. The reserve price as mentioned in the last public auction was about Rs. 181 Crores. While noticing the facts as above, we have noted that the Respondent No.2 has given an offer to the liquidator on 12.05.2022 to acquire the assets by way of priva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating Authority, on an application submitted by the Respondent No.2 making an offer and another intervenor- 'M/s. Jindal Stainless Limited', directed both to submit their bids in a sealed cover. The Adjudicating Authority on being satisfied that two bidders have come up before the Court showing their interest to acquire the Corporate Debtor, the Adjudicating Authority could have directed the liquidator to conduct the private sale so that apart from Respondent No.2 and 'M/s. Jindal Stainless Limited' if any other interested person wanted to participate, opportunity ought to have been given. The liquidator under the statutory Scheme of the IBBI (Liquidation Process) Regulations, 2016 have been empowered to take a decision regarding sale of the assets of the Corporate Debtor. It is relevant to notice that the offer of the Respondent No.2 was rejected by the Liquidator. 13. The Hon'ble Supreme Court had occasion to consider the provisions of Liquidation Regulations, 2016 in reference to conduct of sale by liquidator in "R.K. Industries (Unit-II) LLP vs. H.R. Commercials Private Limited and Ors.- 2022 SCC OnLine SC 1124". In the above case, Stakeholders' Consultation Committee adopte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistance and cooperation to the Liquidator for completing the liquidation process. Regulation 31A has introduced a Stakeholders' Consultation Committee that may advise the Liquidator regarding sale of the assets of the Corporate Debtor and must be furnished all relevant information to provide such advice. Though the advice offered is not binding on the Liquidator, he must give reason in writing for acting against such advice. 44. When it comes to the mode of sale of the assets of the Corporate Debtor, whether immovable or movable and other actionable claims, Regulation 33 of the Liquidation Regulations comes into play and states that ordinarily, the Liquidator will sell the said assets through auction, as specified in Schedule-I(1). Sub-section (2) of Section 33, IBC gives an option to the Liquidator to sell the assets of the Corporate Debtor through a Private Sale, in the manner set out in Schedule-1 (2). Regulation 33 of the Liquidation Regulations is couched in a language which shows that ample latitude has been given to the Liquidator, who may "ordinarily" sell the assets through auction thereby meaning that in peculiar facts and circumstances, the Liquidator may directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, undertaking inter alia that it would remain unconditionally and irrevocably bound by the Swiss Challenge Process Document and the decision of the respondent No. 2 Liquidator. Given the aforesaid terms and condition of the Anchor Bid Document and the Second Swiss Challenge Process Document, read collectively with the unqualified undertaking given by the appellant acknowledging that the respondent No. 2 - Liquidator was well empowered to cancel/modify or even abandon the said process, it does not lie in the mouth of the appellant to urge that once it was set into motion, there was no justification to discontinue the Second Swiss Challenge Process. No special rights came to be bestowed on the appellant as the Anchor Bidder for it to insist that the said process ought to be taken forward and concluded, irrespective of the subsequent decision taken by the respondent No. 2 Liquidator, backed to the hilt by the stakeholders of discontinuing the Swiss Challenge Process and opting for Private Sale of the consolidated assets of the Corporate Debtor to be conducted through direct negotiations 53. To put it otherwise, an Anchor Bidder has no vested right beyond the ROFR, being the origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d confirmed the sale, which according to us, is not the proper procedure for maximisation of the assets of the Corporate Debtor. 17. Learned Counsel for the Respondent No.2 submitted that the Appellant has not brought any prospective bidder who is ready to offer any higher amount. Learned Counsel for the Appellant has submitted that after passing of the impugned order, he has received a letter from one 'Jagdamba Cutlery Limited' where it has written that it is ready to offer a better price. The Appellant, who is a Financial Creditor has stake in the assets of the Corporate Debtor, has every right to question the order of the Adjudicating Authority even though the Liquidator has chosen not to challenge the order. Liquidator issued the Sale Certificate in favour of the Respondent No.2 only as per the direction issued by the Adjudicating Authority dated 16.06.2022. We also need to notice the fact that in pursuance of the impugned order, the Sale Certificate has also been issued to Respondent No.2. 18. In view of the foregoing discussions, we are unable to uphold the order of the Adjudicating Authority dated 16.06.2022 confirming the sale in favour of the Respondent No.2 on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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