Court Orders Asset Revaluation Over Debt Haircut Concerns in Resolution Plan; Seeks Accurate Valuation Before Next Hearing.

The court addressed the approval of a Resolution Plan, where the Resolution Professional indicated a substantial debt haircut of approximately 94.25%. Concerns arose over the accuracy of the asset valuation, as the Resolution Plan Applicant's bids closely aligned with the projected fair value. The Bench ordered a revaluation of the company's assets by experts, under the Official Liquidator's supervision, to ensure accurate valuation. The Official Liquidator was instructed to deliver precise valuation details within three weeks, while the Resolution Professional was to present existing valuation reports before the next hearing on 05.10.2021.

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Issues Involved:
- Approval of Resolution Plan
- Valuation of Assets

Approval of Resolution Plan:
The judgment pertains to an application for the approval of a Resolution Plan. The Resolution Professional stated that the total haircut would be approximately 94.25%. The total debt was disclosed to be around Rs. 1761.70 crores, with the fair value of assets at about Rs. 130.50 crores and the liquidation value at Rs. 101.7 crores. However, the Bench expressed doubts regarding the proper projection of the fair value of assets. It noted that the Resolution Plan Applicant's bids were very close to the fair value projected in the plan. Consequently, the Bench ordered the revaluation of the company's assets by experts under the supervision of the Official Liquidator. The Official Liquidator was directed to provide the exact figures and valuation details within three weeks, while the Resolution Professional was instructed to submit the two valuation reports obtained by him before the next hearing scheduled for 05.10.2021.

Valuation of Assets:
The primary issue in the judgment was the valuation of assets in the context of approving a Resolution Plan. The Bench raised concerns about the accuracy of the fair value of assets as projected in the Resolution Plan. It found it surprising that the Resolution Plan Applicant's bids closely matched the fair value figures. Consequently, the Bench exercised its authority to order the revaluation of the company's assets by experts supervised by the Official Liquidator. This decision was made to ensure a more accurate and reliable valuation process, given the significant financial implications involved in approving the Resolution Plan. The Official Liquidator was tasked with providing precise asset figures and valuation details within a specified timeframe, emphasizing the importance of obtaining accurate valuation information for making informed decisions regarding the approval of the Resolution Plan.

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