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TMI Blog2022 (5) TMI 1501X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Sr. Counsel, stating that the stakeholders have already rejected that proposal, so that proposal has become academic - the ex-promoter has no locus standi to participate or agitate in this proceeding or submit a settlement proposal at this stage, in view of the finding of this Adjudicating Authority, Hon'ble NCLAT and Hon'ble Supreme Court, wherein it was held that, the ex-promoter has become ineligible in terms of Section 29A(h) of the Code as well as proviso to sub-section (f) of Section 35 of the Code. The third objection was that, the e-auction is dated 12.10.2020 and 14.10.2020. The letter of intent was issued on 16.10.2020 and therefore, in terms of the bid process document the entire amount should have been paid within 90 days i.e. before 15.01.2021 - Since this amount has not been paid, the sale cannot be termed as confirmed. As a result, the ex-promoter is entitled to participate and make an offer. This contention appears to be a misconception of the bid process document para 1.16.7 - there is no contradiction between the bid process document and clause 12 of schedule-I - mode of sale and therefore, this argument has no basis. The e-auction was conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orensic audit and to analyze the reduction of value of the assets of the Corporate Debtor from the date of commencement of insolvency till date. b) Pass an order to direct IBBI to conduct an enquiry into the conduct of the Respondent No. 1 (Liquidator) and Respondent No. 2 in the said diminution of value of assets of the Corporate Debtor and into the process being adopted by them for liquidating the assets of the Corporate Debtor. c) Pass an order to stay on any application moved by the Respondent No. 1 requesting approval of the acquisition of the assets of the Corporate Debtor, pending disposal of this Application. d) Pass any other such further orders as deemed fit in the facts and circumstances of the case. 5. The Corporate Debtor, M/s. Su-Kam Power Systems Limited, lost its power in the course of business and landed in the Insolvency and Bankruptcy Code, 2016 proceedings which was initiated by State Bank of India, Financial Creditor. The Corporate Insolvency Resolution Process ('CIR Process') was initiated against the Corporate Debtor ('CD') vide order dated 05.04.2018, and one Mr. Rajiv Chakraborty was appointed as the Interim Resolution Professio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan was received and therefore, on 19.03.2019, the CoC resolved and directed the RP to file an application, seeking liquidation by way of an application before this Tribunal. -In that meeting it was proposed to replace Mr. Rajiv Chakraborty and appoint Mr. Raj Kumar Ralhan as the resolution professional of the Corporate Debtor. 9. It is further stated that, the RP had filed a CA-569(PB)/2019, under Section 33(a) of the Code, seeking an order for liquidation of the Corporate Debtor on 27.03.2019 and vide order dated 03.04.2019, this Adjudicating Authority, allowed the liquidation application and Mr. Raj Kumar Ralhan was appointed as Liquidator. 10. However, the liquidation order of this Tribunal dated 03.04.2019 was challenged by some of the employees of the Corporate Debtor in Company Appeal (AT) (Insolvency) No. 451 of 2019 before the Hon'ble NCLAT and the Hon'ble NCLAT vide order dated 29.04.2019, upheld the order of this Adjudicating Authority as follows:- 19. In view of the observations aforesaid, we hold that the liquidator is required to act in terms of the aforesaid directions of the Appellate Tribunal and take steps under Section 230 of the Companies Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Tribunal dismissing the claim of the ex-promoter in its order dated 19.12.2019 and the further the Ex-Promoter filed an appeal against the same order, before the Hon'ble Supreme Court, which was also dismissed on 15.03.2021 in Civil Appeal No. 2719/2020. Therefore, it was clearly held that, the ex-promoter had become ineligible, both in terms of Section 29A(h) of the Code, and also ineligible to participate in the liquidation proceeding in terms of Regulation 2B of IBBI (Liquidator Process) Regulations, 2016 for proposing the scheme under Section 230-232 of the Companies Act, 2013. 15. Be that as it may, the Secured Stakeholders Committee considered the EOI submitted by one Mr. Deepak Amin on 12.11.2019 and in their deliberation they found that the proposed scheme was not viable and therefore, decide to not proceed further. 16. In this scenario, on 27.12.2019 the Liquidator in absence of any viable scheme under Section 230 of the Companies Act 2013, issued a fresh public announcement inviting EOI's for (a) acquisition of the Corporate Debtor as a going concern; (b) acquisition Corporate Debtor's business as a going concern; (c) block of assets of the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all ensure that the Transfer Date occurs within 90 days of the approval by the Adjudicating Authority of the Bid of the Successful Bidder. Without prejudice to the above mentioned timeline, the Company and the Successful Bidder shall enter into suitable definitive documents to the satisfaction of the Liquidator to give effect to the acquisition of the Company as a going concern or the Assets, as the case may be. The Successful Bidder shall make payment of the balance consideration within 30 days of the demand raised by the Liquidator and any amount received after the said period will attract interest @ 12% p.a. 17. On 03.09.2020, the Liquidator in consultation with the Secured Stakeholders Committee issued an amendment to the public announcement dated 04.05.2020 and 25.06.2020 including the brand name SU-KAM as an intangible asset and intellectual property right which will be also sold along with the Corporate Debtor. The 2nd auction as proposed, was conducted on 12.10.2020 and 14.10.2020. It will be pertinent to point out that in the first auction dated 27.12.2019, the reserve price was of Rs. 51 Crores and in respect of this 2nd auction which was notified on 04.05.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moter on the price is totally misconceived. The valuation which done is correct, as would be evident from the so-called offer made by the ex-promoter, which however was found not feasible or acceptable. The valuation as projected by the ex-promoter as proposed was rightly rejected because the projection given by the ex-promoter in their offer, is in the form of the term loan to be given by the Bank, which did not even fructify from the side of the Bank (i.e. M/s. IDBI Bank). In fact, IDBI Bank which is one of the stakeholders has not even given its stamp of approval, to such a proposal, and the other Bankers have also rejected such a hypothetical offer made by the Ex-Promoter. 22. Ld. Senior Counsel for the Liquidator has also emphasized the fact that, the long drawn legal battle at the behest of the ex-promoter before this Tribunal, Hon'ble NCLAT and Hon'ble Supreme Court at different stages, reduced the value of the Corporate Debtor, to a great extent and therefore, the price at which the bid has been declared at the 1st instance is correct. Therefore, the valuation is justified. We find no error in the valuation of the asset to be sold as a going concern. 23. Mr. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make the balance payment over and above the deposited 25% of the bid amount already made. He relied upon proviso to clause 12 of the schedule-I i.e. mode of sale under the Liquidation Regulation. The clause 12 of schedule-I provides for a time-line, but it is subject to the closure of the auction in the manner as specified and the same is provided, in the bid process document at para 1.16.7. Therefore, there is no contradiction between the bid process document and clause 12 of schedule-I - mode of sale and therefore, this argument has no basis. 29. In the result, we hold that, the e-auction was conducted on 12.10.2020 and 14.10.2020 on the reserve price of Rs. 40 crores, and the letter of intent issued in favour of respondent nos. 1 to 4 on 16.10.2020, stands confirmed. The sale of the Corporate Debtor as a going concern in favour of respondent nos. 1 to 4 stands confirmed. As a result, prayer (A) (B) of this application stand allowed. In so far as penalty and other issue are concerned it will be dealt with in accordance with law. 30. Mr. Arun Kathpalia, Ld. Sr. Counsel and Mr. K. Dutta, Ld. Sr. Counsel for the successful bidder made a statement that the balance bid amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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