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TMI Blog2024 (9) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... doning the delay of 03 days and 14 days respectively, in filing of the present Appeal(s). Sufficient cause being shown, the delay of 03 days and 14 days in filing of the present Appeal(s) are hereby condoned. Company Appeal (AT) (Insolvency) Nos. 702 and 703 of 2024 These two Appeal(s) have been filed against common order dated 12.01.2024 passed by National Company Law Tribunal, Division Bench (Court No.-II), Kolkata in IA No.334(KB) 2023 and IA No.497(KB) 2023 respectively. The Adjudicating Authority by the impugned order dated 12.01.2024 rejected IA No.334 of 2023 filed by the Appellant. Aggrieved by which order Company Appeal (AT) (Insolvency) Nos.702 of 2024 has been filed. The Adjudicating Authority vide order dated 12.01.2024 allowed IA No.497 of 2023 filed by the Liquidator. Aggrieved by which order, Company Appeal (AT) (Insolvency) Nos.703 of 2024 has been filed. 2. Brief facts of the case necessary to be noticed for deciding these two Appeal(s) are: (i) The Appellant 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") com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to take steps to protect the interest of the corporate debtor which is under liquidation and to protect the interest of the corporate debtor particularly in the light of the pendency of the Company Petition No.15 of 2022 titled Rajiv Dhamija & Anr. v. Alliance Broadband Solutions Pvt. Ltd. & Ors; n) Ad-interim ex-parte orders in terms of prayers above; o) costs of and/or incidental to this application be paid by the respondent; p) Such further order or orders, direction or directions be passed as to this Hon'ble Tribunal may deem fit and proper." (vi) After the order of liquidation passed by the Adjudicating Authority, Liquidator issued e-auction sale notice on 06.12.2022. No EMD was received in pursuance to the e-auction notice. Second sale notice was issued on 11.01.2023 for sale of assets of the Corporate Debtor Block wise. Block 'A' included 77,500 equity shares of Alliance Broadband on reserve price of Rs.9.21 crores. The second sale notice was challenged by the Appellant in IA No.334 of 2023. (vii) The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affected. It is further submitted that Liquidator could not have sold the shares, since the shares were not in physical possession of the Liquidator and without obtaining the possession of shares, the Liquidator could not have sold the shares. It is further submitted that in balance sheet of the Financial Creditor for 2021-22 has shown the turnover of the Financial Creditor. It is submitted that if the company petition is allowed, 77,500 shares will revert back to 48.18% in the Financial Creditor, which shall amount to at least Rs.20 crores. It is submitted that e-auction of the shares deserve to be set aside and Adjudicating Authority committed error in rejecting the IA filed by the Appellant. 5. The learned Counsel for the Liquidator refuting the submissions of the Appellant submits that the Appellant at every stage has tried to stop the process. Against the order of liquidation, an Appeal was filed in this Tribunal and before the Hon'ble Supreme Court, which came to be dismissed. Sale notice dated 06.12.2022 was never challenged by 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 'as is where is basis', which auction has already been confirmed on 12.01.2024. The Successful Auction Purchaser has deposited the entire consideration and has received the physical Share Certificate on 13.04.2024. The Appellant at every stage of proceeding has filed applications, to make hurdles in the process. The Adjudicating Authority did not commit any error in rejecting IA No.334 of 2023 and allowing IA No.497 of 2023 filed by the Liquidator. 7. We have considered the submissions of the parties and have perused the records. 8. Before we proceed further, we need to first notice the sale notice dated 11.01.2023, which e-auction notice provides as follows: "E-AUCTION PROCESS INFORMATION DOCUMENT Invitation for Bids for sale of assets of the Manthan Broadband Services Private Limited (Under Liquidation) under the provisions of the Insolvency and Bankruptcy Code, 2016 ("Code") by an Order of the Hon'ble National Company Law Tribunal, Kolkata Bench ("NCLT") dated 06th April 2022 under IBBI (Liquidation Process) Regulation 2016 on AS IS WHERE IS", "AS IS WHAT IS", "WHATEVER IT IS", "WHATEVER THERE IS" and "WITHOUT RECOURSE BASIS" Date of Public Announcement 11.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 shares are Rs. 54.85 lakhs. The average fair value as per IBBI Registered Valuers is Rs. 9.21 Crores and average liquidation value is Rs. 4.61 Crores. The shares have been put up for auction Rs. 9.21 Crores i.e., at the average fair value, hence valuation of shares and quoting of price cannot be faulted." 11. When IBBI Registered Valuer had valued the shares and average fair value is Rs.9.21 crores, the Liquidator did not commit any error in fixing reserve price for the auction of the shares as Rs.9.21 crores. The submission of the learned Counsel for the Appellant that shares were sold on the book value, is also not correct, since the Liquidator has mentioned that book value of the shares was only Rs.54.85 lakhs. 12. The learned Counsel for the Appellant has referred to two right issues, issued by Alliance Broadband. In the right issues, which was issued by Alliance Broadband on 30.09.2019, the value of per share was Rs.1100/- per share and in the second right issue, issued on 07.09.2021, the value of share was Rs.1155/- per share. The Liquidator has submitted that sale of shares at Rs.9.61 crores is @ Rs.1240/- per share. When right issue floated by Alliance Broadband on 07. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... _______________ Rs.(In Lacs) As on 31.03.2022 _______________ i. Authorised Share Capital: Equity Shares - 20,00,000 equity shares of Rs.10/- each _______________ 200 _______________ _______________ 200 _______________ ii. Issued Subscribed and fully paid up: Equity Shares - 3,00,000 equity shares of Rs.10/- each (Previous year -2,00,000 Equity Shares of Rs.10/- each) _______________ 30 _______________ _______________ 30 _______________ III. Reconciliation of number of shares outstanding is set out below: Particulars Equity Shares at the beginning of the year No. of Shares 2,00,000 No. of Shares 2,00,000 Add: Shares issued - During the Year the Co. has allotted 100,000 equity Shares of Rs.10/- each at a premium of Rs.1145/- Only (Issue price Rs.1155/- per shares) and as on 31.03.2022 all the Shares are fully paid up. 1,00,000 _______________ 1,00,000 _______________ Equity Shares at the end of the year 3,00,000 _______________ 3,00,000 _______________ Eights and preference attached to Equity Shares iv. The Company has only one class of Equity Shares having face value of Rs.10/- each and each share holder - entitled to one vote ..... X X X X Extracts X X X X X X X X Extracts X X X X
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