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TMI Blog2023 (2) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not the case of any of the parties that fixing the reserve price on Rs. 51 Crores in the First Auction, there was any challenge to the reserve price. The submission of Learned Counsel for the Appellant that reserve price is less, cannot be accepted. Learned Counsel for the Appellant has also contended that there being higher offer before the Liquidator that is offer made by Gurpreet Singh Vohra of minimum Rs. 62 Crore, same ought to have been accepted and considered by the Liquidator. It is to be noted that offer made by Mr. Vohra was subsequent to auction held for sale of the corporate debtor as a going concern - Submission of Learned Counsel for the Liquidator is that letter written on behalf of Gurpreet Singh Vohra is nothing but letter at the instance of the Appellant which is another attempt to create hurdles in sale of corporate debtor as a going concern. Mr. Gaurav Mitra, Learned Counsel appearing sought to intervene and contend that Mr. Vohra is still ready to offer higher amount. Such request of Mr. Vohra cannot be entertained at this stage. Adjudicating Authority did not commit any error in passing the Order dated 11th May, 2022 approving the Auction of Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating Authority by Order dated 03rd April, 2019 appointed Mr. Raj Kumar Ralhan-Respondent No. 2 herein as the Liquidator. (iii) An Appeal was filed by some of the employees challenging the Order of Liquidation which Appeal was disposed of by this Tribunal on 29th April, 2019 upholding the Order of the Liquidation with direction to Liquidator to make an attempt towards seeking a scheme of compromise/arrangement in terms of Section 230 of the Companies Act, 2013 and on failure, the Liquidator was required to take steps to sell the business of the Corporate Debtor as a going concern. (iv) On 02nd August, 2019, Liquidator issued EOI inviting interested persons to submit their EOI for scheme of Compromise/Arrangement in terms of Section 230 of the Companies Act, 2013. The Liquidator vide Email dated 19/09/2019 informed that the Appellant is ineligible for submission of scheme of compromise/arrangement in terms of Section 230 of the Companies Act, 2013. (v) An Application was preferred by the Appellant before the Adjudicating Authority seeking to participate in the Compromise/Arrangement proceedings under Section 230 and 232 of the Companies Act, 2013. The Adjudication Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor from the date of the commencement of the insolvency till the date of filing of the said application. Application also prayed for stay on the application moved by the liquidator for approval of the acquisition of the assets of the corporate debtor. (ix) On 26th May, 2021, a consortium led by Gurpreet Singh Vohra offered settlement value of Rs. 62 Crores which was not accepted by Liquidator. An application was also filed by the Gurpreet Singh Vohra before the Adjudicating Authority seeking direction to acquire the corporate debtor as a going concern. (x) The Adjudicating Authority vide Order dated 11th May, 2022 allowed the I.A. No. 233/PB/2021 filed by the Liquidator approving the acquisition plan of the Corporate Debtor and dismissed the Application filed by the Appellant seeking appointment of Independent Forensic Auditor . (xi) Aggrieved by the above Order, this Appeal has been filed by the Appellant. 3. We have heard Mr. Ravi Gupta, Sr. Advocate for the Appellant, Mr. Abhinav Vashisht, Sr. Advocate appearing for the Liquidator and Mr. Krishnendu Datta, Sr. Advocate appearing for Respondent No. 1 and 5 to 8. 4. Mr. Ravi Gupta, Learned Sr. Counsel for the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the bid/acquisition plan of successful bid in a public auction from the Adjudicating Authority. LOI having been issued by the Liquidator on 16.10.2020, the successful bidder was obliged to deposit the entire amount within 90 days thereafter. The auction sale held on 14.10.2020 deserved to be set aside since the payment as per statutory provision was not made within 30 days. Mr. Gurpreet Singh Vohra has given an offer to take the corporate debtor for a minimum amount of Rs. 62 Crores which was at least 1.25 times more than accepted bid of Respondent No. 5 to 8 however the same was not accepted by the Liquidator. 5. Learned Sr. Counsel for the Liquidator refuting the submission of Learned Sr. Counsel for the Appellant submits that Appellant ex-promoter had made every possible attempts to take control of the Corporate Debtor in which he failed. The Appellant was held ineligible to submit any Resolution Plan or any scheme of compromise/arrangement which order was affirmed upto the Hon ble Supreme Court. The Liquidator has complied all the relevant provisions of the Code and the Liquidation Regulations under the process document dated 31st August, 2020. The Liquidator was entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. 8. Before we proceed to enter into the respective submissions of Learned Counsel for the parties, it is relevant to notice certain clauses of process document dated 31st August, 2020 which was issued by the Liquidator containing the terms and conditions for participation in the Bid. The process document gives in detail all earlier proceedings. Clause 1.10.6 deals with approval of the adjudicating authority which is to the following effect: 1.10.6 Approval of the Adjudicating Authority In the event that any sale under this Process Document requires approval of the Adjudicating Authority, based on the legal advice received by the Liquidator, the Liquidator shall make suitable application(s) to the Adjudicating Authority for approval of the said sale. In such an event, notwithstanding anything contained in this Process Document, such sale shall be subject to the approval of the Adjudicating Authority. 9. Clauses 1.16.6 and 1.16.7 deal with approval of the bid by the Adjudicating Authority which is to the following effect: 1.16.6 Step VI Approval of the Bid by the Adjudicating Authority Upon acceptance of Letter of Intent by the Successful Bidder(s) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2016. Regulation 33 deals with Mode of Sale . Regulation 33 is as follows: 33. Mode of sale. (1) The liquidator shall ordinarily sell the assets of the corporate debtor through an auction in the manner specified in Schedule I. (2) The liquidator may sell the assets of the corporate debtor by means of private sale in the manner specified in Schedule I when- (a) the asset is perishable; (b) the asset is likely to deteriorate in value significantly if not sold immediately; (c) the asset is sold at a price higher than the reserve price of a failed auction; or (d) the prior permission of the Adjudicating Authority has been obtained for such sale: Provided that the liquidator shall not sell the assets, without prior permission of the Adjudicating Authority, by way of private sale to- (a) a related party of the corporate debtor; (b) his related party; or (c) any professional appointed by him. (3) The liquidator shall not proceed with the sale of an asset if he has reason to believe that there is any collusion between the buyers, or the corporate debtor s related parties and buyers, or the creditors and the buyer, and shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating authority. The application filed by the Liquidator after conducting of sale is in accordance with the process document and the submission of Learned Counsel for the Appellant that there was no requirement of liquidator in making an application for obtaining approval of the adjudicating authority cannot be accepted. 15. Learned Counsel for the Appellant sought to contend that wherever the prior approval of the adjudicating authority is required for a sale, the same is provided in Schedule I, he has referred to Regulation 33 subregulation 2(d). He submits that Schedule I does not require any prior approval of the Adjudicating Authority for auction sale. It is true that public auction by the liquidator does not require any approval in the regulations but when Schedule I paragraph 3 is read with process document, the prior approval of the auction sale by the Adjudicating Authority cannot be ruled out. This tribunal had occasion to consider a similar issue in Company Appeal (AT) Ins. No. 1212-1213 of 2022 Rimjhim Ispat Ltd. Anr. Vs. Jindal Stainless Limited Ors. . In the above case, the Liquidator made an Application to the Adjudicating Authority seeking approval of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the Process Information Document as well as conditions of the Letter of Intent, there is specific contemplation of approval of the sale by the Adjudicating Authority and issue of sale certificate subsequent to making entire payment. Learned Counsel for the Appellant has referred to clause 2 under Heading A. 2. The information provided in the instant Auction Document should be read together with the provisions of the Code and the Liquidation Process Regulations. In the event of any conflict between the instant Auction Document and the Code or the Liquidation Process Regulations, the provisions of the Code or the Liquidation Process Regulations, as the case may be shall always prevail. 16. This Tribunal also held that the process document required approval of the Adjudicating Authority are not in conflict with any provisions of Liquidation Regulations. In paragraph 23 of the above judgement, this Tribunal held that there is no conflict between the terms of the sale requiring approval of the NCLT under the Regulation 33 or Schedule I of Liquidation Regulations. 17. We thus are of the view that Liquidator did not commit any error in making an application to the Adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Judge of the Delhi High Court where Learned Single Judge of Delhi High Court on 30th October, 2019 passed an order in CS (COMM) No. 1155/2018 which was filed by the Corporate Debtor through Resolution Professional seeking injunction against the Appellant with respect to the trademark where Learned Single Judge has granted decree in the suit filed by the Corporate Debtor through Resolution Professional and it was according to the judgement of the Delhi High Court that by amendment in the sale of the Corporate Debtor as a going concern, intellectual property rights were also included. 23. Learned Counsel for the Appellant has also contended that there being higher offer before the Liquidator that is offer made by Gurpreet Singh Vohra of minimum Rs. 62 Crore, same ought to have been accepted and considered by the Liquidator. It is to be noted that offer made by Mr. Vohra was subsequent to auction held for sale of the corporate debtor as a going concern. Learned Counsel for the Liquidator has during his submissions referred to Letter dated 15th March, 2021 which has been filed along with the Reply of the Liquidator written by the Appellant to the Liquidator informing that Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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