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TMI Blog2023 (11) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IBC. At no point of time, prior to holding of auction, i.e., 04.04.2022, any kind of objection was raised by the Appellant to the reserve price or against valuation obtained in the liquidation process by the Liquidator. It was only after the auction was over and Successful Bidder was declared, for the first-time letter dated 26.05.2022 was written to the Liquidator by the Appellant calling for relevant information. It is clear that all that Appellant wanted was to stay the process of auction and sale of the Corporate Debtor. Auction having already completed on 04.04.2022, there was no occasion to stay the auction. Further process of Sale was to be undertaken as per the Liquidation Regulations. when the Successful Resolution Applicant has deposited the entire amount, issuance of Sale Certificate was as per the Liquidation Regulations, in which no objection can be raised by the Appellant. There are no merit in any of the substance raised by learned Counsel for the Appellant in this Appeal to question the impugned order dated 11.11.2022. It is further relevant to notice that order dated 11.11.2022 is an order granting reliefs and concessions to Successful Auction Purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees, the Corporate Debtor be liquidated as per the provisions of Section 32(b) (e) of the IBBI (Liquidation Process) Regulations, 2016. By a subsequent letter dated 13.05.2019, Dr. Mamta Binani, was appointed as a Liquidator. The order of the liquidation remained abeyance, in pursuance of the order passed by the NCLAT and the order passed by the Hon ble Supreme Court of India. The liquidation order stood revived with effect from 22.02.2021 under orders passed by the Hon ble Supreme Court. Thereafter, the Liquidator took over the Corporate Debtor. The Liquidator published the public notice dated 27.02.2021 along with Process Documents, which was amended and supplemented from time-to-time, bids were invited from the parties to conduct operation of the Corporate Debtor as a whole on a going concern basis on an as is where is , as is what is , as is how is and without recourse basis . Four qualified bidders took part in process of the documents. Scheduled date of e-auction was postponed on request from the bidders. (iv) The Appellant filed its claim to the Liquidator on 19.03.2021 of USD 6,203,185.70, which was acknowledged by the Liquidator on 22.03.2022. The Appellant vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite fresh bids through e- Auction by fresh publication of public notice of e- Auction; and 6. Pass such other and further order(s) as this Hon ble Tribunal may deem fit and proper in the circumstances shall be just and appropriate in favour of the Applicant. (viii) The impugned order was passed on 11.11.2022 allowing the IA No.1585 of 2022. Paragraphs 22 and 23 of the impugned order, which contains the directions issued by the Adjudicating Authority, are as follows: 22. We have gone through the prayer in the application and heard submissions made by the party. We have also perused the process of granting similar relief, concession in other costs such Gaurav Jain V/s Sanjay Gupta liquidator of the Topworth Pipes and Tubes Ltd. in the matter of Bank of Baroda V/s Topworth Pipes and Tubes Ltd. 23. We are of the view that the prayer sought by the applicant are essential for transfer of Sterling Biotech Limited as a going concern in favour of the applicant as a successful bidder and consequently entitle the application to take over and run the corporate debtor on a clean slate basis. Therefore, the application deserves to be allowed in view of reliefs sought. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtium with Perrya nor incorporated an SPV in which Perfect Day as well as Perrya could have held suitable shareholding pattern. Perfect day bid on its own name and never brought Perrya on record. The Qualified Bidder List does not mention the name of Perrya LLC. Perrya LLC, was not a successful bidder or a qualified bidder, but Sale Certificate has been issued to both Perfect Day and Perrya. Process Document never indicated that reliefs and concessions can be granted to Successful Auction Purchaser. Had such fact was mentioned in the Process Document, large number of bidders would have come to participate in the e-Auction. It is submitted that Liquidator failed to value the asset of the Corporate Debtor properly. No information was supplied to the Secured Creditors regarding the Valuation obtained by the Liquidator. The Liquidator failed to mention in Process Document that certain reliefs and concessions can be sought by the prospective purchasers, which may be in deviation of the Process Document. Such disclosure would have enabled more parties to participate in auction purchase. There was collusion between the Liquidator and the Perfect day. The claim of the Perfect day in his ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned as Rs.548.46. No stakeholder, including the Appellant raised any objection to the reserve price. Notice inviting bids was published in seven newspapers. List of qualified bidders was also uploaded on website on 16.12.2021 The Appellant is a stakeholder of the Corporate Debtor and it has filed its claim on 19.03.2021, which was duly acknowledged. The Appellant name was also reflected in the list of stake holders published by the Liquidator. The Appellant had also participated in Stakeholders Consultation Committee. The Appellant was well aware of the auction fixed for 04.04.2022 and never raised any objection. For the first time on 26.05.2022, the Appellant wrote a letter to the Liquidator asking for certain information. We may notice the letter dated 26.05.2022, which is the basis of IA No.3138 of 2022 filed by the Appellant before the Adjudicating Authority. The letter dated 26.05.2022, which is written in reference to the auction held on 04.04.2022, it is useful to extract paragraphs 1, 4, 7 and 15, which are to the following effect: 1. As you are aware that Punjab National Bank International Limited ( PNBIL ) is one of the secured creditors of Sterling on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the Liquidator as noticed in paragraph 15 as above. The Liquidator immediately sent the reply on 01.06.2022 to the Appellant, giving response to all information sought by it. It is useful to extract the entire letter of 01.06.2022 of the Liquidator, which is to the following effect: To Punjab National Bank (International) Limited (PNBIL) 1, Moorgate, London, EC2R 6JH. Subject: Reply to your letter dated 26.05.2022 Dear Sir, The undersigned is in receipt of your letter dated 26.05.2022 whereby you have sought certain information qua e-auction process of the Sterling Biotech Limited (hereinafter referred to as Corporate Debtor ) which was held on 04.04.2022. In response thereto, the undersigned submits her reply hereunder : a) At the very outset, the undersigned takes this opportunity to highlight that the notice under reply appears to have been issued under a misunderstanding and misimpression of the actual facts pertaining to the liquidation process of the Corporate Debtor. Hence, for ease of reference the facts in completeness are narrated hereinbelow to put the matter in context. b) The undersigned has been conducting the liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meeting vide our email dated 21.06.2021. d) Accordingly, the undersigned constituted SCC and uploaded the list of SCC dated 21.06.2021 on the official website of Corporate Debtor. Moreover, the sale of Corporate Debtor as a going concern was also discussed in the first SCC meeting held on 25.06.2021 and the SCC had duly approved the sale of Corporate Debtor as a going concern. e) It is stated your good office seems to have overlooked that fact that on 06.07.2021 through email, the undersigned has updated the Plan of Actions in relation to liquidation Process of Corporate Debtor to all the financial creditors wherein it was duly mentioned that after marketing, public announcement and based on the receipt of EOI/ Bids, an online auction will be conducted for the acquisition of Corporate Debtor, as a whole, on a going concern. Since then, there have been several instances wherein the undersigned has mentioned that the Corporate Debtor is being sold as a going concern basis on as is where is basis. f) For completeness, the undersigned with the object to conduct a transparent liquidation process of Corporate Debtor and to seek advice in conducting the liquidation proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to bring to your attention that each and every step of e-auction of Corporate Debtor was duly informed to the all-financial creditors including your bank by email. Details of Emails issued by the undersigned to financial creditors including you are summarized in Appendix -B. In addition to emails sent to the Financial Creditors, details of emails sent to the SCC are summarized in Appendix-C. Hence, it is stated that your averment that you were not informed regarding the e-auction of Corporate Debtor is based on a misapprehension. The undersigned s response to the information sought by you in the paragraph 15 of the letter under reply is as follows: a) After the commencement of Liquidation, two registered valuers were appointed to determine the realizable value of the assets/ businesses of the Corporate Debtor. b) AS your good office is aware that the reserve price of INR 548.46 Crore is the average of two estimated value of the assets/ business as received by the liquidator as per Regulation 35 read with Clause 4 of Schedule I of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. This was based on the estimates of realizable valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the following effect: IA 3138/2022 Ld. Counsel for the Applicant, Punjab National Bank International Limited, is present. This is an Interlocutory Application filed by the Applicant, seeking various directions, elaborately mentioned in Prayer Clause, against Respondents. It is seen from the records that the matter was heard and Reserved for Orders and the Order was pronounced in the Month of November. In this case, Neither the Counsel for the Applicant has mentioned the matter nor has prayed for issuance of Notice against the Respondents. In fact, we are of the considered view that the present Interlocutory Application bearing IA No.3138 of 2022, at this belated stage is wholly misconceived and completely devoid of merits. Hence, Interlocutory Application bearing IA No.3138 of 2022, is disposed of as dismissed as rejected. 8. We have already noticed the prayers in the IA No.3138 of 2022, which was filed by the Appellant. Prayers in the Application were to stay the e- Auction process/ sale process of the Corporate Debtor till fresh bids are invited for re-auction and the liquidator be directed to maintain status quo. The auction was already completed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The reserve price of the auction has been fixed as per the Valuation Report received by Liquidator in the liquidation process. There being no challenge to the said reserve price, inspite of several auction notices, which were issued as early in July 2021, the challenge to the Valuation raised by the Appellant in this Appeal as well as in the IA No.3138 of 2022 filed before the Adjudicating Authority is unsustainable. The Corporate Debtor has been directed to be liquidated by the order of the Adjudicating Authority, which order attained finality upto the Hon ble Supreme Court. In the liquidation process, Liquidator has proceeded to obtain Valuation and the reserve price was fixed on the basis of Valuation obtained by the Liquidator. Hence, the process cannot be said to be violative of any of the provisions by the Liquidator. The Liquidator in reply has also stated that the Appellant holds merely 0.734% share in the pool of Secured Financial Creditors on the interest of their security. We have also noticed that Appellant has also relinquished his security, vide email dated 24.03.2021 and after relinquishment of security by the Appellant, assets were required to be sold as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the steps taken towards marketing of the liquidation estate which was a subject of the auction process. 10. A stakeholder, who only holds 0.734% share in the pool of Secured Financial Creditors is complaining about the entire liquidation process, when public sector Banks and other Financial Creditors have not raised any objection, which itself is sufficient to repel the objections raised by the Appellant. We, thus, are satisfied that there is no substance in the submission of the Appellant regarding reserve price, which was fixed for the auction of the Corporate Debtor. 11. The learned Counsel for the Appellant during his submission has made allegations against the Liquidator that Liquidator has connived with Respondent No.1 and has not conducted the liquidation in accordance with Liquidation Regulations and has unduly helped Respondent No.1. The Liquidator in his reply has already brought details of the liquidation process, which indicates that in response to the liquidation process, notice was issued by the Liquidator to five bidders, who have given their Expression of Interest and their names were also published as stakeholders. In reply to allegations of Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ications and websites including www.wsj.com, www.economictives.indiatimes.com, www.money.cnn.com, www.nytimes.com, www.usatoday.com, www.forbes.com, moneycontrol markets and news, CNBC TV 18, ET Markets, National Stock Exchange India, Bombay Stock Exchange India, www.ft.com etc. ii) Leo Marcom Private Limited: for marketing through dedicated email marketing in India/ Russia USA and Germany, leaderboard banner advertisement in weekly enewspapers, etc. d) All these endeavours were made with the ultimate objective to maximise the value of the assets of the Corporate Debtor. This was duly reported in the Third Quarterly Progress Report filed on behalf of the Liquidator for the quarter commencing from July, 2021 to September, 2021. e) From the bare perusal of the above, it is clear that it was only due to effective strategies that so many bidders evinced interest and participated in the auction process, not only Indian companies, but foreign entities as well. Furthermore, every letter and spirit of the Process Document dated 31.03.2022 has been followed by the Liquidator. 12. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .A. No. 3138 of 2022 filed by the Appellant was on 22.10.2022, i.e., much after completion of acquisition proceedings and filing of Application by the Successful Auction Purchaser on which orders were reserved on 02.08.2022 and as noted above, the I.A. No.3138 has also been rejected on 17.02.2023 by the Adjudicating Authority, which order has become final and has not been questioned. When we look into the prayers made in I.A. No.3138 of 2022, it is clear that all that Appellant wanted was to stay the process of auction and sale of the Corporate Debtor. Auction having already completed on 04.04.2022, there was no occasion to stay the auction. Further process of Sale was to be undertaken as per the Liquidation Regulations. when the Successful Resolution Applicant has deposited the entire amount, issuance of Sale Certificate was as per the Liquidation Regulations, in which no objection can be raised by the Appellant. 15. We do not find any merit in any of the substance raised by learned Counsel for the Appellant in this Appeal to question the impugned order dated 11.11.2022. It is further relevant to notice that order dated 11.11.2022 is an order granting reliefs and concessions to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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