Tribunal Upholds NCLT's Decision: Auction of Corporate Debtor as Going Concern Valid, No Retrospective Application.

The Appellate Tribunal dismissed the appeal by the Suspended Director, affirming the NCLT's decision regarding the auction of the Corporate Debtor as a going concern. The Tribunal found no error in the auction process, ruling that Regulation 32A sub-clause 4 could not be applied retrospectively. Consequently, the Impugned Order stood unaltered.

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Issues:
1. Challenge against the Order dated 04.11.2022 passed by the National Company Law Tribunal, Chandigarh Bench.
2. Appeal by the Suspended Director of the Corporate Debtor against the Order.
3. Challenge to the Auction Notice and subsequent rejection of applications CA No. 15 of 2020 and I.A. No. 553 of 2020.
4. Dispute regarding the lease of the property from the Chandigarh Administration.
5. Interpretation of Regulation 32-A (4) in relation to the sale of the corporate debtor within 90 days from the liquidation commencement date.
6. Validity of the auction of the Corporate Debtor as a going concern.
7. Application of Regulation 32A sub-clause 4 in the auction process.

Analysis:
The Appellate Tribunal heard the appeal against the Order of the National Company Law Tribunal, Chandigarh Bench, related to the auction of the Corporate Debtor. The Suspended Director challenged the Order that decided on CA No. 15 of 2020 and I.A. No. 553 of 2020. The appeal raised concerns about the Auction Notice and subsequent rejection of the applications. The Appellant's Counsel argued that the property was leased from the Chandigarh Administration, emphasizing the lack of permission for property transfer and referring to Regulation 32-A (4) regarding the sale timeline. The Tribunal acknowledged the lease and the auction proposal for the Corporate Debtor as a going concern, noting a letter from the Chandigarh Administration on transfer fees.

Regarding the lease deed status, the Respondent's Counsel contended that the lease continued in the name of the Corporate Debtor, suggesting the sale of the shares of the corporate debtor. The Tribunal found no error in conducting the auction of the corporate debtor as a going concern. The Respondent raised the issue of the auction not taking place within 90 days as per Regulation 32A sub-clause 4, arguing for asset sale under specific clauses. However, since the auction sale notice was issued before the insertion of the relevant regulation, the Tribunal held that the sub-clause could not be applied retrospectively to the auction process.

Ultimately, the Tribunal concluded that there were no grounds to interfere with the Impugned Order and dismissed the appeal, affirming the decision of the National Company Law Tribunal.

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