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Issues: (i) Whether the Rayagada property could be excluded from the liquidation estate and valued at nil, and whether a fresh valuation with updated asset memorandum was warranted; (ii) whether the appellant, as a prospective bidder and H1 bidder, had locus standi to challenge the impugned order.
Issue (i): Whether the Rayagada property could be excluded from the liquidation estate and valued at nil, and whether a fresh valuation with updated asset memorandum was warranted.
Analysis: The asset in question was treated as part of the corporate debtor's liquidation estate despite disputes over title and pending proceedings, because assets subject to determination of ownership form part of the liquidation estate. The valuation process adopted earlier was found to be inconsistent with the liquidation regulations, since the asset was effectively omitted or valued without proper compliance with the prescribed process. The Court also held that Section 230 of the Companies Act, 2013 could not be used to bypass the mandatory valuation framework under the liquidation regulations. Confidential valuation material could not be freely shared with prospective applicants. In view of the object of maximisation of value, the asset had to be revalued and the asset memorandum updated before any fresh scheme process.
Conclusion: The valuation exclusion was impermissible, and fresh valuation with inclusion of the Rayagada property in the asset memorandum was upheld.
Issue (ii): Whether the appellant, as a prospective bidder and H1 bidder, had locus standi to challenge the impugned order.
Analysis: The dispute over valuation and inclusion of assets was held to lie within the domain of stakeholders and creditors, not a third-party prospective bidder. The appellant had no vested right to have its proposal considered or approved, and the impugned order did not inflict a legally cognisable injury on it. On that basis, the appellant was not treated as an aggrieved person for the purpose of appeal.
Conclusion: The appellant lacked locus standi to maintain the appeal.
Final Conclusion: The order directing fresh valuation of the corporate debtor's assets, inclusion of the disputed property in the liquidation framework, and a renewed Section 230 process was sustained, and the appeal was held to be without merit.
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