TaxTMI 
TaxTMI 
2022 (11) TMI 635
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....ng concern basis under liquidation by way of implementation of the acquisition plan submitted by the Applicant and seek certain reliefs, concessions, directions, dispensations and exemptions from this Tribunal which are necessary to acquire Sterling Biotech Limited (the Corporate Debtor) as a going concern. 2. The Corporate Debtor i.e. Sterling Biotech Limited was ordered to be Liquidated vide Order dated 11.06.2018 by Adjudicating Authority. During CIRP, no resolution plan was approved by the Committee of Creditors of the Corporate Debtor, hence this Tribunal vide Order dated 08.05.2019 effective from 11.05.2019, ordered liquidation of the Corporate Debtor and Ms. Mamta Binani was appointed as the Liquidator. 3. The Respondent, in accordance with the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and the Process Document issued a public notice and Process Document on 21.10.2021 calling the stakeholders to submit their claims with proof for acquisition of the Corporate Debtor as a whole on a going concern basis on an "as is where is", "as is what is", "as is how is" and "without recourse basis" and in accordance with the Insolvency and Bankruptcy....
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....otice and Process Document, the Applicant submitted a binding bid of INR 638,00,00,005/- (Indian Rupees Six Hundred and Thirty Eight Crores and Five only) "Final Consideration", and pursuant to the review of the expression of interest (EOI), supporting documents submitted with the Respondent and submission of the earnest money deposit (EMD) in terms of the Process Document, the Applicant was declared as a 'qualified bidder'. Thereafter, the bid was undertaken by way of an e-auction process on 04.04.022, whereby the Applicant was declared as the Successful Bidder. 6.5 Subsequently, the Respondent issued a Letter of Intent dated 05.04.2022 (LOI) to Applicant, subject to the fulfilment of the conditions specified therein, including inter alia, the payment of INR 127,60,00,001/- (Indian Rupees One hundred twenty seven crores sixty lakhs and One only), being equivalent to 20% (Twenty percent) of the Final Consideration (Upfront Payment) and the Balance Consideration i.e. an amount of INR 510,40,00,004/- (Indian Rupees Five hundred and Ten crores Forty Lakhs and Four only), being equivalent to 80% (Eighty percent) of the Final Consideration (Balance Consideration) in the manner and with....
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....t, given that the Applicant will itself be acquiring 73.9% (seventy-three-point nine percent) of the share capital of the Corporate Debtor and Perrya will not have investments from any third-party but from the founders of the Applicant. 6.10 That the Applicant has submitted the letters issued by the Acquirers confirming the acquisition of shares of the Corporate Debtor in the manner envisaged in the Acquisition Plan (and as set out in Paragraph 6.09 above). Copies of the consent letters are annexed to Application as Annexure - 6. 6.11 That the Applicant has also submitted a declaration to the Respondent stating that Perrya is not barred from acquiring the Corporate Debtor under section 29A of the Code. 6.12 It is submitted that the Acquisition Plan submitted by the Applicant to the Respondent is akin to a resolution plan under Section 31 of the Code since Regulation 32(e) of the Liquidation Regulations clearly provides that the Liquidator may sell the Corporate Debtor as a going concern. Reference has also been made to the definition of 'resolution plan' under Section 5(26) of the Code which provides that a resolution plan means a plan for insolvency resolution of the Corporate ....
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.... a resolution plan stands approved or in case of a sale of liquidation assets". Further, the Hon'ble Supreme Court of India in the matter of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta, (2020) 8 SCC 531 has held as under: "Section 31(1) of the Code makes it clear that once a resolution plan is approved by the Committee of Creditors it shall be binding on all stakeholders, including guarantors. This is for the reason that this provision ensures that the successful resolution applicant starts running the business of the Corporate Debtor on a fresh slate as it were ....... A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the Corporate Debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the Corporate Debtor. This....
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....mself or in consultation with the Creditors/ Stakeholders and the proceeds from the sale of assets are going to be utilized for distribution t the Creditors in the manner specified under Section 53 of the Code. Hence all the Creditors of the Corporate Debtor get discharged and the assets are transferred free of any encumbrances. The legal entity of the Corporate Debtor however survives." Submissions made by the Respondent/Liquidator are as follows : 7. At the outset, the Respondent has detailed the facts in brief leading up to the filing of the present Application. Furthermore, it is confirmed that in compliance of the Order of this Tribunal dated 28.06.2022, the Respondent has not distributed the amounts received as the EMD and the upfront payment. 8. The Liquidation Order remained in abeyance because of Orders dated 30.05.2019 and 28.08.2019 passed by the Hon'ble National Company Law Appellate Tribunal, New Delhi read with orders dated 17.12.2019, 10.06.2020 and 22.02.2021 passed by the Hon'ble Supreme Court of India. Thus, the Liquidation Order stood revived with effect from 22.02.2021. Subsequently, the Liquidator took over the Corporate Debtor. 9. The Liquidator published....
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....mount of Rs.6,38,00,00,005.00 (Rupees Six hundred Thirty Eight Crores and Five only) and ACG submitted next highest bid amount of Rs.6,30,00,00,000/- (Rupees Six hundred Thirty Crores). Copy of the result published on the portal of the e-auction organizer is annexed as Exhibit - C. (iii) Subsequently, a Letter of Intent dated 05.04.2022 issued by the Liquidator was accepted and signed by the authorized representative of Successful Bidder. Copy of the Letter of Intent dated 05.04.2022 is annexed as Exhibit - D to Reply. (iv) It is submitted that along with the Earnest Money Deposit of Rs.27,42,00,000/- deposited by the Successful Bidder at the time of submission of Expression of Interest, a further amount of Rs.127,60,00,001/- (Indian Rupees One Hundred Twenty-Seven Crores Sixty lakhs and one only) was submitted as the upfront payment on 20.04.2022. It was requested by the Applicant vide letter dated 21.04.2022 not to distribute the said funds and informed that the Applicant is in the process of getting the captioned application filed. The Liquidator had informed that at that point of time, she was not proposing to forthwith distribute the same and that she would abide by the di....
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....ent prescribes four methods for bidders to participate in the e-auction process of the Corporate Debtor (i) Private/Public Limited Company, Limited etc.; (ii) Financial Institutions; (iii) Individual Investor and (iv) Consortium. The option for the special purpose vehicle (SPV) (incorporated by the Successful Bidder) acquiring the Corporate Debtor is also envisaged, which allows acquisition by a special vehicle company where the Successful Bidder has the control over the affairs of the special purpose vehicle through ownership by way of majority of the voting rights and management. Clause 3.1.6: Manner and method of transfer of equity shares of the Corporate Debtor to the Successful Bidder and Perrya LLC 2. RECEIPIENT OF SDALE CERTIFICATE Clause 3.2.1: Acquisition Plan envisages that upon the receipt of the Balance Consideration, certificate shall be issued by the Liquidator confirming that Successful Bidder and Perrya LLC have acquired the Corporate Debtor. As per Clause 4.3(XI)(ii) of the Process Document, upon payment of Final Consideration, the Certificate of Sale or Sale deed will be issued in the name of the Successful Bidder or Special Pu....
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....l cooperate with and provide all necessary support and assistance to the Successful Bidder and Perrya LLC for a period of 180 days from the Effective Date. No such provision in the Process Document. 16. It is pertinent to note that the Corporate Debtor has an extensive variety of operations and in terms of scale as well, there have been challenges faced by the Liquidator from time to time to maintain the running of the Corporate Debtor as a going concern. The terms of the Acquisition Plan could not have been envisaged by the Liquidator at the time of issuance of the Process Document considering the peculiarities of the issues involved qua the place of incorporation of the Successful Bidder. 17. In view of the above submissions, the Respondent states that though there are slight deviations in the Acquisition Plan submitted by the Applicant as compared to the Process Document, the same may be considered by this Tribunal keeping in view the best interest of the Corporate Debtor and all stakeholders and for maximization of the value of the Corporate Debtor. Findings: 18. We have perused the records and heard the Ld. Counsels for the parties. 19. The Applicant herein vide its pra....