Whether all the requirements of clauses (a) to (d) of regulation 33(2) are required to be fulfilled to sell the assets – Alchemist Asset Construction Co. Ltd. Vs. Moser Baer India Limited – NCLT Principal Bench
An application was filed by the Liquidator under regulation 33(2)(d) of the Liquidation Process Regulations, 2016 for taking prior permission to sell the assets of the Corporate Debtor by means of a private sale. The issue before the Adjudicating Authority was whether all the requirements of clauses (a) to (d) of regulation 33(2) are required to be fulfilled to sell the assets.
NCLT held that to our mind the proper interpretation on clauses (a) & (b) would be that a liquidator is entitled to sell the assets without requirement of prior permission after reaching the conclusion that the assets are perishable and it is likely to deteriorate significantly in value if not sold immediately. Otherwise the purpose of regulation would be defeated if the time is required to be spent in filing an application and taken permission because the assets which are perishable may not remain available for sale and perish or it may deteriorate significantly in value if not sold immediately. However, the assets to be sold at a price higher than the reserve price of a failed auction have to be sold with the prior permission of the Adjudicating Authority.
