Tribunal Denies Interim Payment Request Due to Incomplete Valuation Report

The tribunal rejected the applicant's request for the release of an interim payment, citing incomplete valuation report and lapsed offer under Section 236 of the Companies Act, 2013. The tribunal highlighted the importance of resolving pending applications before any disbursement could occur.

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Issues Involved:
1. Interim Payment Release
2. Bank Guarantee Submission
3. Valuation Report Challenge
4. Withdrawal of Offer under Section 236
5. Allegations of Fraud in Valuation

Detailed Analysis:

Interim Payment Release:
The applicant sought an interim payment of Rs. 5,95,00,000/- deposited by the respondent in an escrow account. The tribunal noted that this amount was deposited as an interim measure to protect the applicant's interests. However, the tribunal found that releasing this amount without resolving the pending interlocutory application (IA 127/2018) and the withdrawal pursis would result in a miscarriage of justice and a review of the earlier order dated 19.07.2018.

Bank Guarantee Submission:
The applicant requested that the respondents submit a bank guarantee or bond to secure the balance payment. The tribunal did not specifically address this request in the judgment, focusing instead on the broader issues of the valuation report and the withdrawal of the offer.

Valuation Report Challenge:
The respondent challenged the valuation report prepared by Deloitte, alleging fraud and improper methodology. The tribunal noted that the valuer had not applied mandatory valuation methodologies such as the Net Asset Value (NAV) and Discounted Free Cash Flow (DCF) methods, relying solely on the Comparable Companies Method (CCM). The tribunal found the valuation report incomplete and irregular, as it did not justify the exclusion of other methodologies.

Withdrawal of Offer under Section 236:
The respondent filed a pursis to withdraw the original offer made under Section 236 of the Companies Act, 2013. The tribunal observed that the offer, made on 30.03.2017, should have been completed within one year. Since the transaction was not completed within this period, the offer lapsed. The tribunal emphasized that there is no bar under the Companies Act against the withdrawal of an offer under Section 236.

Allegations of Fraud in Valuation:
The respondent alleged that the valuation report was fraudulent, citing several reasons, including the valuer's failure to consider certain methodologies and reliance on non-comparable companies. The tribunal found these allegations significant and noted that the valuer had not provided a valid reason for excluding certain valuation methods. The tribunal concluded that the valuation report was not free from irregularities.

Conclusion:
The tribunal rejected the applicant's IA 389 of 2018, seeking the release of Rs. 5,95,00,000/-, on the grounds that the valuation report was incomplete and the offer under Section 236 had lapsed. The tribunal emphasized the need to adjudicate IA 127 of 2018 and the withdrawal pursis before any disbursement could be made.

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