Tribunal sets aside order, stays e-auction, directs settlement proposals. Liquidation outcome hinges on creditor concurrence.

The Tribunal set aside the Adjudicating Authority's order, stayed the e-auction notice, and directed the Appellant to submit settlement proposals for all statutory creditors within two weeks. The liquidator was instructed to seek the creditors' concurrence within a month. If agreed, liquidation proceedings would end, with the Appellant paying the liquidator's fees. If not, liquidation would proceed, and the Appellant would vacate the property. Each party was responsible for their costs.

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Issues Involved:
1. Challenge to the Adjudicating Authority's orders regarding the sale and auction of the subject property.
2. Appellant's locus standi to settle dues of statutory creditors and seek documents from the liquidator.
3. Allegations of undervaluation and mala fide actions by the liquidator.
4. Settlement of dues with statutory creditors and the continuation of liquidation proceedings.

Summary:

Issue 1: Challenge to Sale and Auction Orders
The Appellant challenged the Adjudicating Authority's order dated 22.02.2023, which vacated the interim stay on the sale of Plot No. C-158, Sector 41, Noida, Uttar Pradesh, and directed the liquidator to proceed with an open auction with a minimum reserve price of Rs.1.75 crore. The Appellant sought to set aside the e-auction notice and requested a stay on further proceedings.

Issue 2: Locus Standi to Settle Dues
The Adjudicating Authority dismissed the Appellant's applications, holding that the Appellant had no locus standi to settle the dues of statutory creditors or seek documents from the liquidator. The Appellant contended that as a promoter, shareholder, and ex-Director, he had the authority to propose settlements and that the Adjudicating Authority erred in treating him as a third party.

Issue 3: Allegations Against Liquidator
The Appellant alleged that the liquidator acted in a mala fide manner by undervaluing the subject property and ignoring the forensic audit report, which estimated the property's value at Rs. 4 crore. The Appellant argued that the liquidator's actions were contrary to the IBC's objective of maximizing asset value and were intended to unjustly enrich themselves.

Issue 4: Settlement of Statutory Dues
The Appellant claimed to have settled dues with EPFO and the Income Tax Department and was in the process of settling with ESIC. The Appellant argued that the liquidator's refusal to acknowledge these settlements and share relevant documents for settling GST dues was against the principles of natural justice. The liquidator contended that the Appellant's settlements were not accepted by the statutory creditors and that the major creditor, CGST, preferred public auction over settlement.

Judgment:
The Tribunal considered the arguments and submissions and noted that the Appellant had made genuine efforts to settle the statutory dues. The Tribunal held that the liquidator should adopt a positive approach and not shun the Appellant's bona fide efforts. The Tribunal set aside the impugned order dated 22.02.2023, stayed the e-auction notice, and directed the Appellant to submit settlement proposals for all statutory creditors within two weeks. The liquidator was instructed to transmit these proposals to the statutory creditors and seek their concurrence within a month. If the statutory creditors agreed, the liquidation proceedings would be extinguished, and the Appellant would bear the liquidator's fees of Rs.20 lakhs. If any statutory creditor did not agree, the liquidation proceedings would commence, and the Appellant would vacate the subject property. The appeals were disposed of on these terms, with parties bearing their own costs.

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