TaxTMI 
TaxTMI 
2024 (5) TMI 423
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....of 2023 and I.A. No. 839 of 2023 under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') r/w Regulation 32A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016 (in short 'Regulations') and Rule 11 of the NCLT Rules, 2016 (in short 'Rules') for seeking the reliefs contained therein. 2. In so far as I.A. No. 830 of 2023 is concerned, the Respondent No. 1 sought the following reliefs:- "Reliefs sought by the Liquidator in IA 830/2023:- a. To approve the sale of the Corporate Debtor as a going concern to Respondent No.2,i.e.Radha Vasavi Assets LLP, in accordance with the terms enshrined in the Process Document dated 13.01.2023 on an "as is where is"， "as is what is"， "as is how is"，"whatever there is" and "no recourse basis"； and upon receipt of the balance sale consideration as the said process Document, permit the Liquidator of the Corporate Debtor to issue the sale certificate and transfer ownership of the Corporate Debtor to the Respondent No.2,i.e. Radha Vasavi Assets LLP; b. To Grant the reliefs and concessions, as sought, to Respondent No.2 i.e. Radha Vasavi Assets LLP, ....
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....rection to fix four months from 30.07.2023 for removal of phase I to Phase III assets from the premises of the CD without other conditionalities. Since the same is not related to the reliefs claimed with regard to the sale which is in favour of the Applicant, we are not inclined to make any such order" 5. Thus, in the aforesaid manner, both the applications i.e. 830 and 839 of 2023 were partly allowed. 6. CA (AT) (Ins) No. 240 of 2023 is filed by Raghuram Hume Pipes Pvt. Ltd. (Operational Creditor) to challenge the order passed in I.A. No. 839 of 2023 and the same Appellant has filed CA (AT) (Ins) No. 241 of 2023 to challenge the order passed in I.A. No. 830 of 2023 by the Adjudicating Authority. 7. Since, the contents of grounds of appeal and the defence taken by both the Respondents in both the appeals are common, therefore, both the aforesaid appeals are being decided by this common order. 8. The brief facts of this case are that M/s Axis Bank Limited (Financial Creditor) filed an application under Section 7 of the Code bearing CP (IB) No. 678/7/HDB/2018 for the resolution of its debt against M/s Lanco Kondapalli Power Limited (Corporate Debtor) before the Adjudicati....
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....e CD were presented by the valuers before the SCC in the meeting held on 09.09.2021 and draft valuation reports were also shared with the members of the SCC for their views. 15. The SCC of the CD includes a mix of stakeholders, including private banks, nationalized bank, and LIC, collectively representing the interest of the public. The valuation report received from the valuers, determined and considered, the average of the two valuation figures in terms of Regulation 35 of the Regulations, the asset memorandum was submitted before the Adjudicating Authority in accordance with Regulation 34(4) of the Regulations which was duly allowed vide order dated 07.10.2021. 16. According to Respondent No. 1, public announcement for each of the e-auction of the CD were published as per the applicable Regulations in the newspapers having wide circulation and on the websites of the CD and the IBBI. Besides that, he contacted a multitude of potential bidders, encompassing both domestic and international participants, spanning various categories such as strategic, financial and real estate bidders. The public announcement provided that the relevant process document for the respective sales,....
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....stating therein that it shall bid for the sale of the CD as a going concern in the e-auction. It was proposed that on the existing plant and machinery of the CD, if sold to it, it may set up any business unit on the land of the CD and a part of the land could be sold for setting up industry by others but Respondent No. 1 by his email dated 14.02.2023, informed that the e-auction was being conducted on 'as is where is, as is what is, as is how is, whatever there is and on no recourse basis'. It was also clarified that bid was to be submitted without any precondition and strictly in accordance with the terms of the process documents. 19. The process document defines 'category A' asset which read as under:- "Category A" means sale in the e-auction as envisaged in this Process Document of the Corporate Debtor on a going concern basis in Parcel 1 and described under Schedule A along with exclusions of certain assets as described therein. It is further clarified that Phase I Assets, Phase II Assets, Phase III (plant ＆ machinery), Guntupalli Land, Land in Tamil Nadu, Nainavaram land and New Reservoir & Buildings of the Corporate Debtor do not form part of the Corporate ....
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....s mentioned in Schedule A 1,05,94,93,074/- 5,00,00,000/- 24. In the 18th SCC meeting held on 21.02.2023, RSPL was declared as the Successful Bidder for sale of the CD as a going concern and informed the same to RSPL on 22.02.2023. Pursuant to which, RSPL deposited the performance security with Respondent No. 1 amounting to Rs. 52,97,46,537/- on 28.02.2023 and Respondent No. 1 issued the LOI to the Successful Bidder on 02.03.2023. The SPV was required to make the payment of balance sale consideration within 30 days from the issuance of the LOI i.e 02.03.2023. It was stipulated that in case the payment is not made within 30 days then the unpaid sum shall carry an interest of 12% per annum but in any case the entire sale consideration was to be paid on or before 90 days from the issuance of the LOI i.e. on 31.05.2023 and after receipt of the entire sale consideration, the certificate of sale was to be issued and the sum shall be distributed to the stakeholders of the CD in terms of Section 53 of the Code except an amount of Rs. 1,00,00,000 which was to be retained and earmarked by Respondent No. 1 for meeting any future contingencies in relation to the liquidation process and....
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.... 08.02.2023 which is less than the mandatory requirement of 30 days' notice period. Moreover, it is only by a subsequent corrigendum that the auction date appears to have been re-fixed as 15.02.2023 but the same was not widely published or circulated. It is thus submitted that Respondent No. 1 has committed a serious material irregularity in issuing corrigendum for extension of date and time for auction which vitiates the entire process. 27. In reply, Counsel for Respondent No.1 has raised a preliminary objection about the locus of the Appellant to file the present appeal under Section 61 of the Code. He has submitted that the appeal under Section 61 against an order passed by the Adjudicating Authority can be filed by a person 'aggrieved', therefore, the Appellant has to first prove that he is a person aggrieved who has suffered legal injury or infringement of any vested right so as to maintain the appeal. He has also placed reliance on the judgment of the Hon'ble Supreme Court in the case of Adi Pherozshah Gandhi Vs. H.M. Seervai, Adv. General of Maharashtra, Bombay, 1970 (2) SCC 484 and Jasbhai Motibhai Desai Vs. Roshan Kumar, Haji Bashir Ahmed & Anr., (1976) 1 SCC 671. It is....
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....ted towards clearing the admitted claims of the secured financial creditors which is 97% of total admitted claim, having much higher priority under Section 53 of the Code then the present Appellant who is an operational creditor. It is also submitted that none of the financial creditors who have been fully seized of the sale process have raised any doubts or objections concerning it. 29. Counsel for Respondent No. 1 has further submitted that valuation reports were shared with the SCC and accepted without any objection. Since it is the allegation of the Appellant that assessment of the asset is undervalued, it is submitted that the valuation has been done in terms of the Code and Regulations. Two valuers registered with the IBBI i.e. RBSA Valuation Advisors LLP and Adroit Appraisers and Research Pvt. Ltd. were appointed to make the valuation as per the provisional financial statement as on 16.04.2021, audited financial statement as on 31.03.2020, bank statement, sale/lease deeds, recent land sale transactions/deals in the area concerned, details of inventory as on 16.04.2021, ownership documents for all land parcels, discussions with the personnel of the CD and the Liquidator et....
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....request were also provided. It is further argued that the allegation of the Appellant that the land has been sold to the sole bidder is also misplaced. It is argued that in the 6th e-auction, four prospective bidders submitted EOI regarding the sale of the CD as a going concern but after accessing the VDR and undertaking site visits, only one bidder deemed it fit to submit its bid during the said e-auction. In this regard, it is submitted that the sale to a sold bidder at or above the reserve price is not illegal. 32. Counsel for Respondent No. 2 has also supported the arguments of Respondent No. 1 and submitted that the present two appeals filed at the instance of the present appellant are mischievous as it has no claim whatsoever in the entire process being a minuscule stakeholder of 00.54% and had been watching the entire proceedings since the beginning through its representative of the operational creditor. 33. Both counsel for Respondents have thus prayed that both the appeals may be dismissed with costs. 34. We have heard Counsel for the parties and perused the record with their able assistance. 35. We have given the facts of this case in detail in previous paragr....