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TMI Blog2024 (5) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation. Moreover, all the bidders were given access to the VDR which contained the entire description of the parcel of land put up for auction, therefore, the Appellant cannot agitate that the number of parcels of the land were not categorically mentioned. There was no objection by the Appellant to the sale which was conducted though first five auction and no effort was made by the Appellant to file any application for intervention even before the Adjudicating Authority when the present two applications were taken up for hearing and decided. By no means, the Appellant can be termed to be a person aggrieved for the purpose of invoking Section 61 of the Code to present these appeals to challenge the impugned order especially when no other member of the SCC has challenged the same. The Appellant has no locus standi to maintain the present appeals and their appeals deserves to be dismissed on this premise only but it is also observed that the sale which has been conducted by Respondent No. 1 is after following due process of law which have been described in the facts mentioned in the earlier part of this order and there is no error in selling the property in the e-auction to the sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e requirements of law and as provided in this application. 3. And in I.A. No. 839 of 2023 the Respondent No. 2 sought the following reliefs:- Reliefs sought by the Successful Bidder in IA 839/2023 (as amended vide IA 898/2023): a. To Approve the sale of the Corporate Debtor as a going concern to the SPV of Successful Bidder, in accordance with the terms enshrined in the Process Document dated 13.01.2023 on an as is where is , as is what is , as is how is , whatever there is and no recourse basis ; and allow the Liquidator of the Corporate Debtor to issue the sale certificate to the SPV of Successful Bidder, in relation to the said sale of the Corporate Debtor as a going concern, after approval by this Hon'ble Tribunal, as sought above, and after receipt of the SPV of the Successful Bidder; and/or b. Grant the reliefs and concessions to the Applicants, as particularly detailed in paragraph no. 33(A to Q) and in the above paragraphs of the Application, from the date of issuance of the sale certificate by the Liquidator to the Applicant(s) (or their nominee) in relation to the sale of the Corporate Debtor as a going concern (As amended pursuant to Order of Hon'ble NCLT). 4. Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Debtor. The said application was allowed by the Adjudicating Authority on 16.04.2021. The RP gave his consent to act as Liquidator and was appointed as such. 10. The Appellant alleged to have submitted its claim for an amount of Rs. 2,85,45,873/- to Respondent No. 1 which is stated to have been confirmed vide email dated 29.01.2021 and in the list of the stakeholders, published by Respondent No. 1, on the website of the CD, it was mentioned as Operational Creditor. 11. According to Respondent No. 1, the valuation of assets of the Corporate Debtor were undertaken by the Liquidator in terms of Regulations with due consultation with the members of the Stakeholder Consultation Committee (in short SCC ). The valuation of the CD was done on 23.04.2019, just after the order of liquidation was passed on 16.04.2021. 12. According to Respondent No. 1, two valuers registered with the IBBI i.e. RBSA Valuation Advisors LLP and Adroit Appraisers and Research Pvt. Ltd. were entrusted the job of valuation. 13. According to Respondent No. 1, both the valuers relied upon diverse sources of information and documents before arriving at their respective valuation such as provisional financial st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled list of assets of the CD, including land parcel details incorporated in the going concern sale. For the purpose of due diligence by the qualified bidders before bidding for any particular parcel of assets of the CD, the qualified bidders were provided with access to the virtual data room (VDR) that contained all the relevant details and documents of the CD, including financials, documents and agreements pertaining to the land parcels and litigations. List of bidders who were provided with access to VDR and site visit as per their request was also provided. 17. In the first five round of e-auction conducted by the Liquidator/R1, the following assets of the CD were sold :- E-auction Date of E-auction Description of Asset Successful Bidder Status of Sale 1st round 11.01.2023 No assets were sold - - 2nd round 16.06.2022 Phase III assets MCM Pacific Pte LOI Issued 3rd round 29.07.2022 Phase I assets Reliance Synergy Limited Sales Certificate Issued 4th round 27.08.2022 Parcel 2: Phase II plant and machinery Indira Ispat Udyog Sales Certificate Issued Parcel 7:- Guntupalli Land National Energy Trading and Services Limited Sale Certificate Issued 5th round 16.12.2022 Parcel 5 Land in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier auctions held by the Liquidator and shall be excluded from the purview of the sale of the Corporate Debtor as a going concern. Further, Phase III (plant machinery) of the Corporate Debtor is also excluded from the sale process and does not form part of Parcel 1. 21. The process documents also sets out certain additional conditions which read as under:- It is clarified that the Successful Bidder, declared under any Parcel whether under Category A or Category B, shall have no right, title, interest or claim on the respective excluded assets described in Schedule A for Parcel 1 of this Process Document（＂Excluded Assets ). Nothing stated in this Process Document shall restrict/inhibit the Liquidator to deal with the Excluded Assets in any manner that he may deem fit in his sole discretion. 22. The sale of the CD as a going concern to RSPL was conducted with exclusion of, inter alia, certain assets which is reproduced as under:- Category Asset Asset Description Financial assets Financial assets Trade Receivables 90 days (as per the IM) Financial Assets Financial Assets Cash and Cash Equivalent Financial Assets Financial Assets Bank Balance Including Fixed Depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are being challenged in these appeals by the Appellant who is stated to be an operational creditor. 26. Counsel for the Appellant has submitted that e-auction has been conducted without following the principles of value maximization and is against the interest of the stakeholders as the assets have been grossly undervalued. It is submitted that the operational creditor is a part of the stakeholders of the CD, therefore, has the locus standi to raise the issues regarding e-auction as it would be directly affected by the process including recovery in respect of their claims. It is further submitted that in the 6th round of e-auction, the most valuable asset of the CD i.e. land at Kondapalli and certain other assets is about 160 acres of valuable land, having the commercial value of about 7.75 Lac sq. yards for which the registration value is about Rs. 8,000/- per sq. yard and has the value of about Rs. 620 Cr. It is further contended that more than 200 Cr. of contingent assets as mentioned in Schedule A of the process document are also part of the sale as a going concern but Respondent No. 1 hastily undervalued the asset of the CD and conducted non-transparent and farcical e-aucti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Adjudicating Authority without any intervention and has now woke up to challenge the valuation of eighteen months after the first auction was held and twenty three months after the valuation reports were prepared and placed before the SCC of the CD. It is further submitted that the Appellant was aware of the entire resolution process as it was represented through GE International Inc. i.e. representative of the operational creditors, in terms of Regulation 31A(3) of the Regulations, in the SCC of the Corporate Debtor. It is further alleged that the Appellant has not approached the Court with bonafide intention because it chose to file the appeal after the sale stands completed for all intents and purposes because the Respondent No. 2 has made the entire payment of the sale consideration after approval of the sale by the Adjudicating Authority, the consideration has been distributed to the stakeholders of the CD and certificate of sale has been issued on 30.06.2023. 28. At this stage, it would be relevant to mention that the same objection has been taken about the locus standi of the Appellant by Respondent No. 2 as well on the ground that the Appellant is not a person aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty has been undervalued is a figment of imagination of the Appellant and contrary to the record. 30. It is further submitted that there has been no irregularity in the conduct of the e-auction at the reserve prices. It is submitted that the reserve price was set solely on the basis of the said valuation reports provided by the independent registered valuers and in consultation with the members of the SCC of the CD. The subsequent reduction of the valuation of the CD as a going concern was on account of exclusion of corresponding valuations of assets sold in parcels between the first e-auction till the fifth eauction. It is also submitted that after the liquidation order dated 16.04.2021, vide which the Respondent No. 1 was directed to make endeavour to first sell the CD as a going concern, the Corporate Debtor as a going concern was put up for sale in the e-auction held on 11.01.2022 at the reserve price of Rs. 321.09 Cr. but despite receiving 10 EOI, no bids were received during the said e-auction, therefore, during the subsequent eauction, the Liquidator put up the respective lots/parcels of assets of the CD for sale but in addition to the option of sale of the CD as a going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings starting from the order passed by the Adjudicating Authority initiating the liquidation and appointing the RP as the liquidator. The valuation report was prepared by Respondent No. 1 through two registered valuers of the IBBI who have collected the information from various sources, already mentioned herein before, and the report was submitted to the SCC in its meeting held on 09.09.2021. The draft valuation report was also shared with the members of SCC for their views. The Appellant was represented through GE International Inc. i.e. representative of the operational creditors appointed in terms of Regulation 31A(3) of the Regulations in the SCC of the CD. No objection to the draft report was filed by any of the members of the SCC of the CD and valuation reports were accepted. It is also pertinent to mention that the main stakeholders in the SCC are the financial creditors which includes the banks, LIC etc. having 95% share but they have not raised any objection about the valuation. Moreover, all the bidders were given access to the VDR which contained the entire description of the parcel of land put up for auction, therefore, the Appellant cannot agitate that the number of p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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