AI Drafter 
TaxTMI 
TaxTMI 
2023 (3) TMI 698
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....dator for accepting of proposal of purchase of the Corporate Debtor submitted by the Respondent No.2 - Kautilya Industries Pvt. Ltd. and rejecting the Intervention Application I. A. No.30/JPR/2020 filed by the Appellant. The Appellant aggrieved by the impugned order has come up in this Appeal. Brief facts of the case necessary to be noticed for deciding the Appeal are: i. On an application filed under Section 7 of the Code by Financial Creditor - Asset & Reconstruction Company (India) Ltd. insolvency resolution process was initiated against the Corporate Debtor - Parasrampuria Synthetics Limited by order dated 17.05.2018. ii. In response to Form G issued by the Resolution Professional Expression of Interest were received. A Resolution Plan was also submitted by M/s Kautilya Industries Pvt. Ltd., which was rejected by the CoC. iii. No plan being approved in the resolution process, order of liquidation was passed on 15.02.2019 and Respondent No.1 - Mr. Rajesh Jhunjhunwala was appointed as the Liquidator. iv. The Respondent No.2 questioned the liquidation order by filing an appeal in this Tribunal, which was dismissed on 31.07.2019. This Tribunal wh....
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....s to file an affidavit. In pursuance of order dated 02.12.2021, affidavits were filed by ARCIL and Pegasus which were noticed by the Adjudicating Authority in its order dated 10.12.2021. ix. The Appellant filed an I.A. No. 30/JPR/2021 before the Adjudicating Authority seeking Intervention and direction to the Liquidator to take on record the proposal offered by the Applicant/ Appellant. The Adjudicating Authority on the application filed by the Appellant directed the Appellant to implead M/s Kautilya Industries Pvt. Ltd. (Respondent No.2 herein). Reply was filed by M/s Kautilya Industries Pvt. Ltd. to the application objecting to the intervention sought by the Appellant. x. The Adjudicating Authority heard the parties and by impugned order has allowed I.A. No. 308/JPR/2020 filed by the Liquidator and approved the proposal of sale of Corporate Debtor as going concern in favour of the Respondent No.2 - M/s Kautilya Industries Pvt. Ltd. and rejected I.A. No. 30/JPR/2021 filed by the Appellant. Appellant aggrieved by the said order has come up in this Appeal. 2. We have heard Shri Virender Ganda, learned senior counsel for the Appellant, Shri Neeraj Kishan Kaul, le....
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.... and after more than four months of approval of the proposal of the Respondent No.2 has filed Intervention Application before the Adjudicating Authority on the only ground that Appellant is offering 10% more sale consideration hence his offer be accepted. It submitted that Appellant has been prompted by the Promoters of the Corporate Debtor which fact is clearly proved by affidavit filed in this Appeal on behalf of the Appellant bringing Asset Memorandum on record which is a confidential document, not required to be disclosed by the parties who participated in the process. The Appellant has been prompted by the Promoter is clear since several facts which are in their knowledge are being canvassed by the Appellant. When the proposal which is higher than the Reserve Price of the last failed auction has been submitted which proposal has also been approved by the Stakeholders Consultation Committee, the attempt of the Appellant in making offer of a higher price is to derail the entire process. The Adjudicating Authority has directed the Financial Creditors to file an affidavit regarding the proposal of Respondent No.2, they having consented, the Adjudicating Authority has approved the ....
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....uction has also failed since no EMD was received, issued a notice on 15.08.2020 for conducting Stakeholders Consultation Committee meeting. The Respondent No.2 has approached the Financial Creditor - ARCIL with a proposal to purchase the Corporate Debtor on a price higher than the last Reserve Price and ARCIL in the Stakeholders Consultation Committee meeting on 18.08.2020 expressed his agreement in favour of the proposal of Respondent No.2. The Stakeholders in the meeting dated 18.08.2020, resolved to accept the proposal of Respondent No.2 with majority vote and authorized the Liquidator to file an application before the Adjudicating Authority for acceptance of proposal of Respondent No.2. Consequently, an application was filed by the Liquidator being I.A. No. 308/JPR/2020 seeking approval of proposal of Respondent No.2. It was after more than four months, Intervention Application I.A. No. 30/JPR/2021 was filed by the Appellant. In the Intervention Application, the Appellant came up with a case that the Appellant is making proposal to pay and amount of Rs.81 Crores as against Reserved Price of Rs.73.50 Crores. It was stated that the Applicant could not participate in the auction d....
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....autilya Industries Private Limited Further during the said meeting held on August 18, 2020, Arcil recommended to the Liquidator to approach the Hon'ble NCLT for approval of the proposal. The copy of minutes of the meeting of said stake-holders consultation committee is attached here with the affidavit. I depose in compliance with the directions issued by the Hon'ble Tribunal in the last order dated December 02, 2021 that the offer received from M/s Kautilya Industries Private Limited is acceptable to Arcil subject to any terms imposed by this Hon'ble Tribunal." 10. Similarly, an affidavit was filed by another Financial Creditor - Pegasus, where in Para 2 and 3 following has been stated: "2. I do hereby depose that M/s Pegasus Assets Reconstruction Private Limited being lead member (3.02%) of stakeholder consultation committee duly constituted under Section 31A of the INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (LIQUIDATION PROCESS) REGULATIONS, 2016, gave its acceptance in principle for the sale of the assets of corporate debtor under private sale treaty by M/s Kataliya Industries Private Limited in terms of its proposal dated 14 August 2020: The copy ....
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....t No.2. The acceptance of proposal of Respondent No.2, which was more than the last Reserve Price of the failed auction, after due deliberation was accepted by the Stakeholders. 13. Learned counsel for the Appellant has placed reliance on judgment of this Tribunal in "Rimjhim Ispat Limited & Anr. Vs. Jindal Stainless Limited & Anr., Company Appeal (AT) (Ins.) No. 1212-1213 of 2022" and submitted that in the similar facts and circumstances when a higher offer was made before the Adjudicating Authority by Jindal Stainless Ltd. before approval of the private sale, the Adjudicating Authority has accepted the said offer by Jindal Stainless Ltd. and directed for limited e-auction between the Appellant- Rimjhim Ispat Ltd. and Jindal Stainless Ltd. 14. When we look into the facts of the Rimjhim's case (supra), the private sale in favour of Rimjhim Ispat Ltd. for Rs.177.50 Crore whereas Jindal Stainless Ltd. filed an application before the Adjudicating Authority where it made an offer of initially Rs.190 Crore and revised to Rs.200 Crore. The Adjudicating Authority held that in the circumstances sale in favour of the Appellant cannot be said to be complete and directed Jindal Stai....
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....nce of mandatory provisions of Regulation 32A Sub-regulation (3) since the Liquidator has not identified the assets to be sold as going concern. Regulation 32A(3) is as follows: "32A. (3) Where the committee of creditors has not identified the assets and liabilities under subregulation (2) of regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the liquidator shall identify and group the assets and liabilities to be sold as a going concern, in consultation with the consultation committee." 16. Shri Ganda has filed an affidavit where he has referred to a letter of Rajasthan State Industrial Development and Investment Corporation dated 29.02.2020 where area of plot allotted to the Corporate Debtor was mentioned as 92,525 sq. m. Learned counsel for the Appellant submits that in the Asset Memorandum issued by the Liquidator, the area mentioned of the land of Bhiwadi is 85,025 sq. m. The said memorandum was issued by the Liquidator and with regard to Bhiwadi plots in Note no.2 following has been stated: "2. Bhiwadi Land- as per RIICO records total leasehold land is 13945644 sq mtrs ho....
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....ifferent locations with other details which are contained in the notes. The Asset Memorandum is a detailed document containing details of immovable and movable assets and submission of the Appellant that there has been no identification of the assets under Regulation 32A Sub-regulation (3) is without any substance. After identification of the assets and liabilities, five e-auction notices were issued, which were never objected by anyone. At this stage, when Appellant has come up before the Adjudicating Authority by filing an Intervention Application making a higher offer, he cannot be allowed to rake up issues which were never raised before the Adjudicating Authority. 19. The Adjudicating Authority has returned the finding that liquidation process was conducted by the Liquidator in accordance with the Regulation. In paras 21, 22 and 23 following has been held by the Adjudicating Authority: "21. The Adjudicating Authority finds that the Liquidator has complied with the due process to sell the assets of the Corporate Debtor as laid down in Schedule I under Regulation 33 of the Liquidation Regulations 2016. The process of sale of the business of the Corporate Debtor as goi....