TaxTMI 
TaxTMI 
2020 (10) TMI 769
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....ll licenses and Government approvals in the name of the Corporate Debtor shall be renewed/extended by the concerned Government authorities to enable the Corporate Debtor to operate its business as a going concern and all consequences for non-compliances in the past under various laws in the period prior to this private sale shall stand waived. It has also been prayed that all incentives and benefits granted to the Corporate Debtor shall continue to remain valid and the Government authorities will not be entitled to withdraw such benefits and incentives due to change in ownership. It has also been stated that existing equity shares shall stand extinguished and fresh shares shall be allotted to Geosoft Distributors Private Limited. 2. The relevant facts are that Corporate Insolvency Resolution Process ("CIRP") was initiated on 12th April, 2017. Present Liquidator had been appointed as Resolution Professional ("RP"). On failure of CIRP, Liquidation Order was passed on 15th December, 2017. Eight Progress Reports have been filed by the Liquidator. Valuation was done and report from both the Valuers were received on 12th April, 2018. Stakeholders' meetings were also held. In the m....
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....ons on various points. Following clarifications were sought: "(1) Intangible assets, if any, such as manufacturing licences, trading licences etc. owned by the company. If so what is the valuation thereof ? (1) As per valuation report, there was an advance income tax of Rs. 1,72,04,095/- as on 6th January, 2018. This amount is net of provision. Whether return had been filed or this amount has been received as a refund ? (2) There are investments in equity of various private limited companies and in gold coins -what is current status and valuation of these as liquidation value has been taken as NIL ? (3) There were short term advances to be recovered in cash and kind unsecured but considered good. The value has been stated as Rs. 36,29,00,683/- as on 6th January, 2018 -what is current status ? (4) Financial statements for 31.03.2018, 31.03.2019 and provisional financial statement as on 30.09.2019. (5) Evidence regarding contacts with other business entities engaged in similar business. (6) Capability of prospective bidder to run the Corporate Debtor as going concern." 5. The Ld. Liquidator submitted that outstanding b....
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.... and Verbal Annexure B2 3 K D Liquor Private Limited (Through Kedar Nath Bansal) Verbal 4 Pradeep Saraf (Through his Advisor) Several Meetings From the perusal of the above chart, it is noted that no evidence of communication with party no. 3 and 4 has been produced. Only one communication from party no. 1, i.e. letter dated 21st December, 2017 has been attached. No response of the liquidator has been attached, particularly, when the said party showed interest to purchase the Corporate Debtor because the Corporate Debtor was having three liquor licences in Kolkata and adjoining areas. As regards the correspondence with the second party, only a mail sent on behalf of the liquidator dated 10th October, 2018 has been attached. Response of the said party, if any, has not been provided. 7. We have also perused the Valuation Reports. As per the valuation report of M/s. Adroit Technical Services Private Limited, copy of which has been placed at page no. 65, following valuation has been done in respect of various assets: Particulars Fair Market Value (INR) Liquidation ....
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.... 362918683 - Total 20046977 10. The valuation of trade receivables has been done as under:- S. No. Trade Receivable Book value as on 6th Liquidation value January 2018 (INR) (in INR) 1 Trade receivables outstanding for a period exceeding six months from the date they were due for payment 539898725 16196962 11. The valuation of short term loan & advances at page no. 87 had been shown as under:- S. No. Short term loans and advances Book value as on 6th January 2018 (In INR) Liquidation value (in INR) (Unsecured but considered good) 1 Balance with Govt. Authorities 6,09,609 - 2 Advances to be recovered in cash or kind 36,23,09,074 - Total 36,29,18,683 NM 12. The other report has been prepared by M/s. Engineers & Valuers Collaborated. The valuation of Flat at page 97 had been arrived at as under:- Ite....
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....e debtor as a going concern : Provided that where an asset is subject to security interest, it shall not be sold under any of the clauses (a) to (f) unless the security interest therein has been relinquished to the liquidation estate. 32A. Sale as a going concern. (1) Where the committee of creditors has recommended sale under clause (e) or (f) of regulation 32 or where the liquidator is of the opinion that sale under clause (e) or (f) of regulation 32 shall maximise the value of the corporate debtor, he shall endeavour to first sell under the said clauses. (2) For the purpose of sale under sub-regulation (1), the group of assets and liabilities of the corporate debtor, as identified by the committee of creditors under sub-regulation (2) of regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 shall be sold as a going concern. (3) Where the committee of creditors has not identified the assets and liabilities under sub-regulation (2) of regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 201....
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....e-bid qualifications, if any. (4) The reserve price shall be the value of the asset arrived at in accordance with regulation 35. (4A) where an auction fails at the reserve price, the liquidator may reduce the reserve price by up to twenty-five percent of such value to conduct subsequent auction. (4B) where as auction fails at reduced price under clause 4(A), the reserve price in subsequent auctions may be further reduced by not more than ten percent at a time. (5) The liquidator shall make a public announcement of an auction in the manner specified in Regulation 12(3); Provided that the liquidator may apply to Adjudicating Authority to dispense with the requirement of Regulation 12(3)(a) keeping in view the value of the asset intended to be sold by auction. (6) The liquidator shall provide all assistance necessary for the conduct of due diligence by interested buyers. (7) The liquidator shall sell the assets through an electronic auction on an online portal, if any, designated by the Board, where the interested buyers can register, bid and receive confirmation of the acceptance of their bid online. (8) If the liquidator....
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....6. We are further of the view that the pleas made by the Liquidator as regards the continuance of licences in the name of the Corporate Debtor, waiver of penalties/other penal actions in relation to non-compliance by the Corporate Debtor etc. are outside jurisdiction of Adjudicating Authority in view of the recent decision of the Hon'ble Supreme Court in the case of Embassy Properties, decided on 3rd December, 2019. Further, there are no specific provisions like Section 30 of IBC, 2016 as applicable to approval of resolution plan, hence, in liquidation, approval of sale of assets by Adjudicating Authority cannot empower the buyer of the assets to have such benefits. In this regard, we are further of the view that the moment liquidation is ordered, any proceedings under any law can continue which had been pending before the order of liquidation being passed. This is as per the provisions of Section 33(5) of IBC, 2016. Hence, such pleas made by liquidator are rejected. 17. It is further noted that sale as a going concern involves transfer of both assets and liabilities or group of assets or liabilities which are clubbed together. The purpose of such clubbing is that the bus....