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TMI Blog2023 (3) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... a scheme for compromise which came to be considered by the Stakeholder Consultation Committee, which was not approved having received only 64% voting share. The Stakeholder Consultation Committee have thus well aware of the plan and scheme submitted by Respondent No.2 and Stakeholders has given their express approval to the proposal of Respondent No.2. The acceptance of proposal of Respondent No.2, which was more than the last Reserve Price of the failed auction, after due deliberation was accepted by the Stakeholders. The Respondent No.2 was not a stranger to the above process and he has already filed Resolution Plan and a scheme which was not earlier approved. Financial Creditors were aware of the credentials of the Respondent No.2 and must have interacted with the Respondent No.2 even earlier - there are no error in exercise of jurisdiction by the Adjudicating Authority in approving the proposal of Respondent No.2 and judgment of this Tribunal in Rimjhim Ispat Ltd. was on its own facts. There are no illegality in the order of the Adjudicating Authority which may warrant interference in the impugned order in exercise of our appellate jurisdiction - appeal dismissed. - Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was rejected. vi. The Liquidator thereafter proceeded to conduct e-auction for sale of Corporate Debtor as going concern. Reserve Price in the first auction was Rs.120 Crore. Auction was fixed for 26.12.2019, which failed. Liquidator further issued four auction notices on reduced reserve price which also could not receive any bid. Fifth e-auction notice was issued on 05.08.2020 fixing auction dated on 18.08.2020 on Reserved Price of Rs.73.50 Crore. In pursuance of e-auction notice, no EMD was received. vii. Liquidator being of the view that fifth auction has also failed, convened a Stakeholders' Consultation Committee meeting on 18.08.2020. In the meeting held on 18.08.2020, the Liquidator brought before the Stakeholders' Committee about interest shown by certain parties. In the meeting, the Liquidator informed that he has received a proposal through ARCIL where M/s Kautilya Industries Pvt. Ltd. who had submitted resolution plan and also scheme of compromise has shown interest to purchase the Corporate Debtor as going concern. The proposal was for amount of Rs.73.51 Crore (more than the last reserve price). 66% of the stakeholders voted in favour, accepting the propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating Authority and allowing the application filed by the Liquidator is not in accordance with law. It is further submitted that the Liquidator has not conducted the liquidation proceedings in accordance with the Liquidation Regulation, 2016. No steps were taken for identification of the assets of the Corporate Debtor when the sale of the Corporate Debtor was going to take place as a going concern. Regulation 32A enjoins upon the Liquidator to identify and group the assets and liabilities to be sold as a going concern. There was no identification of the assets. It is further submitted that the actual measurement of the Bhiwadi property which was owned by the Corporate Debtor is 92,525 sq. m. whereas Liquidator has shown the extent of property only as 85,025 sq. m. and there was no explanation for the remaining land of 7,500 sq. m. It is submitted that the Liquidator also did not follow the procedure under Regulation 32A as well as Schedule - I of the Regulations. No strategy for sale was prepared. Date of fifth auction was 18.08.2020 and on the same day decision was taken by the Stakeholders Consultation Committee in favour of the Respondent No.2. 4. Shri Neeraj Kishan Kaul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Liquidation Regulations. The Appellant has produced confidential documents which are protected under the Regulations. Appellant cannot be allowed to rely on the Asset Memorandum which was a confidential document. No case of procedural irregularities in the process adopted by the Liquidator has been canvassed before the Adjudicating Authority. There is clear collusion between the Appellant and Promoter which itself is sufficient to non-suit the Appellant. In the application filed by the Appellant before the Adjudicating Authority, there was no pleading of any procedural irregularity or fraud on part of the Liquidator or Respondent No.2 and the submissions which are sought to the raised in the Appeal need no consideration. 5. Learned counsel for the Liquidator has supported the impugned order and submitted that the Liquidator has conducted the entire liquidation process in accordance with Liquidation Regulations. The Adjudicating Authority has also returned finding that the Liquidator has conducted the process in accordance with the Regulations. The Respondent No.2 had also submitted a scheme under Section 230 which could not be approved as it could not secure the requisite m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) Pass directions to the Stakeholders to consider the Buyout Proposal of the Applicant and take decision in accordance with law and in the interest of the stakeholders and the Corporate Debtor. d) Pass such other and further order(s) as deemed fit be passed in the interest of justice. 8. Application came for hearing before the Adjudicating Authority on 02.12.2021, where in I.A. No. 308/JPR/2020 and I.A. No. 30/JPR/2021 following order was passed: ORDER IA No. 308/JPR/2020 IA No. 30/JPR/2021- Heard Mr. Abhishek Anand, Adv. on behalf of Kautaliya Industries Private Limited, Mr. Anand Chibbar, Ld. Sr. Counsel on behalf of Mohan Fabtex Limited, and Mr. Amol Vyas, Adv. on behalf of the Liquidator. Also heard Mr. Dinkar Singh, Adv. on behalf of ARCIL. Pegasus Asset Reconstruction Company (India) Limited. He submitted that the Application submitted by Kautaliya Industries Private Limited is acceptable to them as stakeholders. In this regard Learned Counsel is directed to file separate affidavits of ARCIL and Pegasus Asset Reconstruction Company (India) Limited stating the same very clearly under due authorization. List these two IAs for conclusion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal. 11. The sequence of event indicate that after receiving application filed by the Liquidator being I.A. No. 308/JPR/2020 as well as I.A. No. 30/JPR/2021 received from the Appellant, the Adjudicating Authority asked for filing affidavit by both the Financial Creditors and both the Financial Creditors filed affidavit clearly stating that the proposal submitted by Respondent No.2 is acceptable. The Financial Creditors having given their consent by affidavit, as required by the Adjudicating Authority, Adjudicating Authority proceeded to approve the proposal of Respondent No.2 by the impugned order. 12. The submission which has much pressed by learned counsel for the Appellant is that the Appellant has made a higher offer of more than 10% from the offer of Respondent No.2 which was sufficient ground to accept the offer of the Appellant, maximisation of the value of the Corporate Debtor being the main objective of the I B Code. There can be no dispute that maximisation of the value of the Corporate Debtor is one of the objectives of the I B Code. However, the said objective has to be achieved within timelines. There has been already five failed e-auctions and the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity exercised its discretion and directed for limited e-auction after deposit of Rs.50 Crores by Jindal Stainless Ltd. The discretion exercised by the Adjudicating Authority was in the facts of the above case, which was affirmed by this Tribunal in Rimjhim's case (supra). There are few specific facts which have been relied by the Adjudicating Authority in the present case for approving the offer of Respondent No.2. The proposal submitted by Respondent No.2 came to be approved by Stakeholder Consultation Committee and thereafter after filing of application by the Respondent No.2 as well as the Appellant, the Adjudicating Authority directed the Stakeholders to again file affidavit giving their response. Affidavits filed by both the Financial Creditors, as noted above, where they clearly shown their acceptance to the proposal of Respondent No.2. When the stakeholders had expressed their acceptance to the proposal of Respondent No.2, we do not find any error in the decision of the Adjudicating Authority approving the proposal, as noted above. The Respondent No.2 was not a stranger to the above process and he has already filed Resolution Plan and a scheme which was not earlier appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction notices were issued by the Liquidator which received no objection from any participant including Promoters of Parasrampuria Synthetics Limited regarding area which was included in the Asset Memorandum. We are of the view that Appellant in this Appeal cannot raise the issue that Liquidator has not correctly described the area of Bhiwadi plot. We have noted the contents of the I.A. No. 30/JPR/2021 filed by the Appellant, in which application no said ground was taken or pressed. We also find substance in submission of learned counsel for Respondent No.2 that Asset Memorandum is a confidential document, which is not accessible to any person during course of liquidation and the document which are sought to be filed in the Additional Affidavit filed on 01.02.2023 are the document which can be in the knowledge of Promoter only. We find substance in the submission of learned counsel for Respondent No.2 that no source of document which have been filed by the Appellant has been disclosed and there is every reason to accept the submission of Respondent No.2, that it is the Promoter from whom the document have been received by the Appellant. Be as it may, the issue regarding incorrect me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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