Liquidator is required to follow the terms and conditions of Clause 12 of Schedule 1 of the Liquidation Process Regulations, 2016 and cannot lay down its own terms and conditions in the EOI regarding the period for payment of balance sale consideration – Vinod Kumar Kothari Liquidator of Nicco Corporation Ltd. Vs. Sneha Techno Equipments Pvt. Ltd. – NCLAT New Delhi
In this case, in the EOI, the period for payment of balance sale consideration was given 15 days whereas after the date of amendment of period for payment of balance sale consideration to 90 days in Liquidation Regulations(amended on 25.07.2019). The Respondent had been asking for 90 days from the date of demand in terms of amendment dated 25.07.2019.
Hon’ble NCLAT held that:
(i) The very fact that the circular dated 26.08.2019 has already been withdrawn and that the amendment dated 25.07.2019 was in vogue as on 08.07.2020, it was incumbent upon the Liquidator to have followed the provisions of Regulation 33 much less Schedule 1 (Clause 12) of the Regulations which has not been followed and the terms and conditions have been provided by the Liquidator on its own in the EOI overlooking the terms and conditions as envisage in Schedule 1.
(ii) In such circumstances, the action of the Liquidator is totally unsustainable, therefore, we do not find any error in the order under challenge in which all the factors of this case have been thoroughly appreciated.
(iii) Upheld the decision of NCLT Kolkata Bench.
