9911796707
TMI Blog2024 (9) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... that physical shares were not in possession of the Liquidator, hence, Liquidator ought not to have put the shares for auction. The Liquidator has also filed an Application seeking a direction to the Alliance Broadband to handover physical shares. The shares have become part of the liquidation estate as per operation of law. It is relevant to notice that Adjudicating Authority has already in paragraph 10 of the order passed on 12.01.2024 has directed Alliance Broadband to handover the Certificate in original to the Liquidator within a week. It has been pleaded on behalf of the Respondent that Alliance Broadband has already handed over the physical Certificate in original to the Liquidator, which in turn has been handed over to the Successful Auction Purchaser - there are no substance in the submission of the Appellant that auction sale is illegal on this ground. The Liquidator has already indicated in the sale notice that physical shares are not with the Liquidator and steps are being taken to acquire the physical shares. The Corporate Debtor being shareholder of the Alliance Broadband, which shares were put on auction sale by the Liquidator, consequent to the liquidation order, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is Suspended Director of the Corporate Debtor Manthan Broadband Services Pvt. Ltd. On an Application filed by Alliance Broadband Services Pvt. Ltd., Corporate Insolvency Resolution Process ( CIRP ) commenced against the Corporate Debtor vide order dated 18.09.2019. (ii) The Corporate Debtor owned 77,500 equity shares of the Financial Creditor. The Financial Creditor issued right issue on 30.09.2019 @ Rs.1100/- per share, which right issue, came to be challenged by the Appellant by filing CA No.1365/KB/2019, which Application came to be rejected by the Adjudicating Authority vide order dated 17.10.2019 as not maintainable. (iii) The Financial Creditor issued second right issue on 07.09.2021 @ Rs.1155/- per share, which also was sought to be challenged by the Appellant by filing IA No.847 of 2021. However, in the said IA no interim order was passed by the Adjudicating Authority. The Appellant filed Company Petition under Section 241 and 242 of the Companies Act, 2013 against the Alliance Broadband Services Pvt. Ltd. on June 8, 2022. (iv) On 06.04.2022, the Adjudicating Authority directed liquidation of the Corporate Debtor. An appeal was filed by the Appellant challenging the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority on 14.02.2023 passed an order in IA No.334 of 2023 refusing to stay the e-auction. The Adjudicating Authority directed the e-auction as proposed on 14.02.2023 to be conducted, which shall however, abide by the result of the application. E-auction was held on 14.02.2023, in which one M/s Kalyankari Texfab Pvt. Ltd. has became the highest bidder, offering an amount of Rs.9.61 crores for sale of 77,500 equity shares of Alliance Broadband. (viii) Against the order dated 14.02.2023, the Appellant again filed an Appeal under Section 61 before this Tribunal being Company Appeal (AT) (Ins.) No.396 of 2023, which was not entertained by this Tribunal by order dated 27.02.2023. (ix) The Liquidator on 06.02.2023 filed an application being IA No.497 (KB) 2023 seeking to place on record the Report filed in connection with the auction held on 14.02.2023 and also sought relief to declare the H1 bidder as Successful Bidder and for issuance of Sale Certificate. The Successful Auction Purchase also filed an Intervention Petition in the proceedings. (x) The Adjudicating Authority heard IA No.334 of 2023 as well as IA No.497 of 2023 and by the impugned order, dismissed IA No.334 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Appellant and they have filed IA No.334 of 2023, challenging the sale notice of 11.01.2023. The sale notice clearly provided that sale was as is where is basis, as is what is basis, whatever there is basis and no resource basis and the purchasers being well aware of all the facts, have submitted their bids. All relevant information were included in the sale notice. The shares of Alliance Broadband are the part of liquidation estate of the Corporate Debtor. The Appellant, who is Suspended Director of the Corporate Debtor has no right to challenge the sale of the shares of Corporate Debtor. It is further stated that the reserve price of Rs.9.21 crores was fixed for the shares on the basis of Report of IBBI Registered Valuer. It is submitted that book value of 77,500 shares were only Rs.54.85 lakhs. The average fair value as per IBBI Registered Valuers being Rs.9.21 crores and average liquidation value being Rs.4.61 crores, the shares have been put to auction for Rs.9.21 crores as reserve price. It is submitted that sale has been made for an amount of Rs.9.61 crores, i.e., higher than the reserve value. The submission of the Appellant that shares are undervalued is wholly incorr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IS WHERE IS , AS IS WHAT IS , WHATEVER IT IS , WHATEVER THERE IS and WITHOUT RECOURSE BASIS Date of Public Announcement 11.01.2023 Date of E-Auction 14.02.2023 Issued by: Kuldeep Verma Liquidator 9. The dispute between the parties only relates to auction sale of 77,500 equity shares held by the Corporate Debtor in Alliance Broadband. The dispute in the present Appeal only confined to the auction sale of the shares. IA No.334 of 2023 was filed by the Appellant on the next date, after dismissal of its Civil Appeal in the Hon ble Supreme Court on 05.02.2023 praying to stay the e-auction, which was scheduled for 14.02.2023. The Adjudicating Authority heard the IA No.334 of 2023 and while hearing the Application on 14.02.2023, the Adjudicating Authority made following observations in paragraph 23, which are as follows: 23. A considerable time has lapsed since Liquidation of Manthan was ordered, and presumably it is the Directors of the suspended Board who had pushed Manthan into Liquidation. At this juncture, allowing the Directors of the suspended board to intervene or restrain the liquidator from proceeding with the auction would not be fair. Accordingly, we allow E auction as propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares at Rs.9.61 crores is @ Rs.1240/- per share. When right issue floated by Alliance Broadband on 07.09.2021 itself mentions the share value of Rs.1155/- per share, the auction sale of the shares @ Rs.1240/- per share, we do not find any substance in the submission of the Appellant that shares were undervalued in the auction. 13. As noted above, the auction of the shares was on as is where is basis , which was clearly mentioned in the sale auction notice dated 11.01.2023. The learned Counsel for the Appellant has submitted that right issue, which was issued by the Alliance Broadband has already under challenge in IA No.847 of 2021, which was filed by the Appellant and which is pending consideration. Challenge to right issue, issued by the Alliance Broadband is pending before the Adjudicating Authority, we are of the view that challenge to right issue can have no effect on the auction sale of the shares, which shares were sold on as is where is basis . The submission of the Appellant that physical shares were not in possession of the Liquidator, hence, Liquidator ought not to have put the shares for auction. The Liquidator has also filed an Application seeking a direction to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share holder entitled to one vote per share 15. The Corporate Debtor being shareholder of the Alliance Broadband, which shares were put on auction sale by the Liquidator, consequent to the liquidation order, we are of the view that no exception can be taken to the process adopted by the Liquidator in putting the shares for auction. 16. In view of the foregoing discussions, we are of the view that sale of 77,500 shares, held by the Corporate Debtor of the Alliance Broadband, which are sold through auction, were not undervalued and the same was done after valuation by the IBBI Registered Valuer and the shares were sold on much more than the book value of the shares. The challenge to right issue as filed by the Appellant in IA No. 847 of 2021, which is pending consideration, has no consequence on the auction sale held on 14.02.2023. We do not find any error committed by the Adjudicating Authority in order dated 12.01.2024 rejecting IA No.334 (KB) 2023 filed by the Appellant. After rejection of the IA No.334(KB) 2023, the Adjudicating Authority has rightly allowed IA No.497(KB) 2023 filed by the Liquidator seeking leave of the Adjudicating Authority to declare the Successful H1 bidder ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
