Any decision post transfer of assets regarding the management of assets, including that of the subsequent transfer of the said assets to another company, lies with Successful Auction Purchaser and the same is not covered within the jurisdiction of the Adjudicating Authority under the IBC – Asl Enterprises Ltd. Vs. Mr. Daulat Ram Jain, the liquidator of Adi Ispat Pvt. Ltd. – NCLT Kolkata Bench

In this case, the Successful Auction Purchaser in liquidation process created a subsidiary company and filed IA seeking permission for transfer of assets from Auction Purchaser to its subsidiary company. NCLT Kolkata Bench observed that the Liquidator had no objections, a sale agreement for the assets of the Corporate Debtor was executed between the Auction Purchaser and the Liquidator of the Corporate Debtor, the assets are in possession of the Auction Purchaser and held that since the assets in question have been transferred vide sale agreement dated 20.03.2023 to the Auction Purchaser, i.e. a private company, any decision post the date of such transfer regarding the management of such assets, including that of the subsequent transfer of the said assets to another company, lies with the company. The same is not covered within the jurisdiction of the Adjudicating Authority under the IBC and as such, the prayers sought in the instant application cannot be granted.

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I. Case Reference

Case Citation : (2023) ibclaw.in 775 NCLT
Case Name : Asl Enterprises Ltd. Vs. Mr. Daulat Ram Jain, Liquidator
Corporate Debtor : Adi Ispat Pvt. Ltd.
Application/Appeal No. : I.A. (I.B.C.) 703/KB/2023 in CP(IB) No. 1172/KB/2019
Judgment Date : 18-Oct-23
Court/Bench : NCLT Kolkata Bench
Member (Judicial) : Ms. Bidisha Banerjee
Member (Technical) : Shri Balraj Joshi

II. Brief about the decision

Facts of the case

  • In the Liquidation Process of Adi Ispat Pvt. Ltd., Corporate Debtor, the Liquidator has delivered actual physical possession 7 of the assets of the Corporate Debtor to the applicant on AS IS WHERE IS BASIS & WHAT IS BASIS and WHATEVER THERE IS BASIS and NO RECOURSE BASIS without any warranty and/or indemnity on February 4, 2023. Further the Liquidator has also executed a Sale Agreement on March 20, 2023 in favour of the Applicant being the Successful Auction Purchaser(Auction Purchaser).
  • In order to revive the Unit and setting up a rolling mill, the Auction Purchaser has incorporated Asher Rolling Mills Pvt. Ltd., the Respondent No. 2(R2) herein, on March 15, 2023 under the Companies Act, 2013, which is the 100% subsidiary company of the Auction Purchaser.
  • The Auction Purchaser and the R2 are in the same “ASLE Group” having the same Registered Office and common directors on the board.
  • The Auction Purchaser has filed the instant application, praying for registration of the Sale Agreement in the name of the R2 so that the land and assets can be transferred and registered in the name of the R2.

Decision of the Adjudicating Authority

  • The Liquidator had no objections to the prayers of the instant application.
  • A sale agreement for the assets of the Corporate Debtor was executed between the Auction Purchaser and the Liquidator of the Corporate Debtor on 20.03.2023.
  • Further, the assets are in possession of the Auction Purchaser as is clear from the possession letter dated 04.02.2023. The assets have been transferred to the Auction Purchaser.(p4.2)
  • Further, the Auction Purchaser, under section 179 of the Companies Act, 2013, has filed an extract of the its board resolution dated 27.03.2023 wherein it had resolved to file the instant application seeking the registration of transfer of the sale agreement dated 20.03.2023 and transfer of the land in the name of ASLE Rolling Mills Private Limited, R2.(p4.3)
  • Be that as it may, since the assets in question have been transferred vide sale agreement dated 20.03.2023 to the Auction Purchaser, i.e. a private company, any decision post the date of such transfer regarding the management of such assets, including that of the subsequent transfer of the said assets to another company, lies with the company. The same is not covered within the jurisdiction of the Adjudicating Authority under the IBC and as such, the prayers sought in the instant application cannot be granted.(p4.4)
  • Accordingly, I.A. (I.B.C.) 703/KB/2023 is dismissed. CP (IB) No. 1172/KB/2019 shall be listed for further consideration on 24.11.2023.(p4.5-4.6)

 

III. Full text of the judgment

Click here for Judgment

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