TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 1744
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....eferred by the Appellant herein observing as follows: "9. The 1st respondent excluded 110 cents of land from the auction after the dismissal of application I.A.No.330/KOB/2022 filed by the 1st respondent seeking leave of this adjudicating authority to file an application before sub-court Kottarakara in Execution Petition No.51 of 2012 dated 16.11.2022. The court sale to the said land 1.10 acre was confirmed in favour of K.K. Johnson in the year 2012. In this situation, the exclusion of 110 cents of from the auction will not a ground to set aside the sale. 10. The sale effected by auction on 29.12.2022 was confirmed by the 1st respondent after the receipt of the entire sale consideration of Rs.4.05 crores from the successful bidder, 2nd respondent, and also issued the sale certificate on 04.02.2023. Thus, the sale is completed". 2. The Learned Counsel for the Appellant submitted that the Corporate Debtor Company is under Liquidation, ordered by the 'Adjudicating Authority' on 15/10/2020 in IA/160/KOB/2020. It is submitted that the Appellant had filed a Claim of Rs. 59,80,63,541/- as a Secured Financial Creditor which was admitted by the Liquidator; that the Corp....
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....uidator had failed to disclose these facts before the 'Adjudicating Authority'. In the Meeting held on 22/11/2022, the Liquidator had unilaterally reduced the price of 110 cents of land without boundary demarcation, by Rs. 44,23,000/-, setting the 'Reserve Price' at Rs. 3,80,000/-, despite the Appellant's 72.85 % voting right in the Stakeholders Consultation Committee. 5. It is the main case of the Appellant that the Liquidator had proceeded with independent decisions overlooking the matters of maximising the value of the assets and had sold the assets at a diminished 'Reserve Price' without obtaining the requisite approval from the Appellant and did not adhere to prescribed modes of sale as mandated by Regulations 32 and 32A of the Insolvency and Bankruptcy Board of India (Liquidation Process), Regulations, 2016. 6. The Learned Counsel for the 1st Respondent submitted that the 'Reserve Price' of the property was higher than the guideline value of the Liquidation asset; that seven rounds of e-auction were conducted by the 1st Respondent allowing the same said procedure in valuation; that the Appellant had provided consent to the earlier auctions and is therefore, estopped fro....
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....h November 20212 could not consider this item, so he could ratify this expenditure and loan only after 25th November, 2021." 9. The aforenoted Minutes of the Meeting shows that the Appellants herein were very much aware of the reduction of the 'Reserve Price' way back on 12/11/2021 itself. It is seen from the record that even in the Meeting dated 24/01/2022 the General Manager of KSCB was present and it was opined by the Liquidator in that Meeting that the Stakeholders Consultation Committee Members would have sanction to take commercial decisions in an emergency situation and promised another Meeting to finalise the e-auction details. It is seen from the record that in the 10th Stakeholders Consultation Committee Meeting held on 07/02/2022, the Annual General Meeting of KSIDC approved the reduction and the e-auction procedure. Shri GM Jills mon jose of KSCB abstained since their Board approval for the above proposal of reduction in the 'Reserve Price' by another 10 % was not yet obtained. It is stated that the final decision of KSCB would be intimated by 11/02/2022. This record of the Minutes of the various Stakeholders Consultation Committee Meetings held from 21/11/2021 to 24....
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..... (1) The liquidator shall ordinarily sell the assets of the corporate debtor through an auction in the manner specified in Schedule I. (2) The liquidator may sell the assets of the corporate debtor by means of private sale in the manner specified in Schedule I when- (a) the asset is perishable; (b) the asset is likely to deteriorate in value significantly if not sold immediately; (c) the asset is sold at a price higher than the 'Reserve Price' of a failed auction; or (d) the prior permission of the Adjudicating Authority has been obtained for such sale: Provided that the liquidator shall not sell the assets, without prior permission of the Adjudicating Authority, by way of private sale to- (a) a related party of the corporate debtor; (b) his related party; or (c) any professional appointed by him. (3) The liquidator shall not proceed with the sale of an asset if he has reason to believe that there is any collusion between the buyers, or the corporate debtor's related parties and buyers, or the creditors and the buyer, and shall submit a report to the Adjudicating Authority in this re....
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....son to whom the sale is made; and (f) any other details of the sale. 11. It is contended by the Learned Counsel for the Appellant that Regulation 32 mandates a clear and transparent process for liquidation of assets; that Regulation 33 clarifies the mode of sale; that Regulation 35 prescribes the valuation of assets intended to be sold and that Regulation 36 mandates the submission of Progress Reports to the 'Adjudicating Authority' encompassing the Liquidator's actions and the status of the Liquidation process. It is vehemently argued by the Learned Senior Counsel for the Appellant that the scope and objective is maximisation of value of assets and this was not followed by the Liquidator at all. At this juncture, it is significant to reproduce Schedule- I, Mode of Sale under Regulation 33 of the IBBI Liquidation Process, Regulations, 2016:- 1. AUCTION (1) Where an asset is to be sold through auction, a liquidator shall do so the in the manner specified herein. (2) The liquidator shall prepare a marketing strategy, with the help of marketing professionals, if required, for sale of the asset. The strategy may include- (a) releasing adv....