35 (2)

Liquidator can be removed under IBC, 2016 on any of the grounds provided under Sec. 276 of the Companies Act, 2013 – State Bank of India Vs. Mr. Kari Venkateswarlu – NCLT Hyderabad Bench

NCLT Hyderabad held that:
(i) The liquidator is the appointee of this Authority. He is supposed to act as a neutral umpire vis-a-vis various stakeholders in the game.
(ii) It is for the CoC etc. but not the Resolution Professional, to take appropriate proceedings or file an appeal and the Resolution Professional should have maintained a neutral stand.
(iii) The relationship between the liquidator and the Adjudicating Authority is sort of fiduciary. Similarly, the liquidator has also to maintain highest regard to the principles of integrity and honesty in dealing with all the stakeholders.
(iv) The grounds under Sec. 276 of Companies Act, 2013 have direct link with the functioning of the liquidator and if he treads the path which clash with the interest of the stakeholders or shock the conscience of the common man, he can be removed. On the same analogy, the liquidator can also be removed under the IBC on any of the above grounds.

Liquidator can be removed under IBC, 2016 on any of the grounds provided under Sec. 276 of the Companies Act, 2013 – State Bank of India Vs. Mr. Kari Venkateswarlu – NCLT Hyderabad Bench Read Post »

Whether Liquidator is authorized to sell the assets of the Corporate Debtor in blocks? – Stressed Assets Stabilisation Fund v. Ms. Rekha Kantilal Shah – NCLT Mumbai Bench

NCLT Mumbai Bench held that:
(i) The Liquidator has been provided with ample powers not only to sell the land in parcels but also not to be bound by the consultation with the stakeholders.
(ii) Section 36 of the IB Code 2016 categorically stipulates the scope and ambit of the liquidation estate. Sub-Section (4) of Section 36 is with respect to the assets which shall not be included in the liquidation estate and shall not be used for recovery in the liquidation.
(iii) The Liquidator is authorized to sell the immovable and movable property of the Corporate Debtor in liquidation through a public auction or a private contract, either collectively, or in a piecemeal manner.
(iv) The proviso to Section 35 (2) of the IBC makes it clear that the opinion of the stakeholders would not be binding on the Liquidator.

Whether Liquidator is authorized to sell the assets of the Corporate Debtor in blocks? – Stressed Assets Stabilisation Fund v. Ms. Rekha Kantilal Shah – NCLT Mumbai Bench Read Post »

It is ultra vires the IBC to invoke the provisions of the Companies Act, in the absence of any specific provision in the Code or Rules permitting such invocation – Ashok Velamur Seshadri, Liquidator of M/s. Archana Motors Pvt. Ltd. Vs. Shibu Job Cheeran Suspended Managing Director of Archana Motors Pvt. Ltd. – NCLT Kochi Bench

In this case, the Petition is filed by the Liquidator as an Execution Application under Section 424 (3) of Companies Act, 2013 R/w Rule 56 of NCLT Rules, 2016. The Applicant filed the petition under Companies Act, 2013, R/w Rule 56 of NCLT Rules, 2016, to execute the order passed under Sec. 66, IBC. Time and again it is held that IBC is a self-contained code with objective to maximise value in a timely manner. When the Code provides certain mode for execution of orders it is unnecessary to proceed under the different Act. In fact, it is ultra vires the IBC to invoke the provisions of the Companies Act, in the absence of any specific provision in the Code or Rules permitting such invocation.

It is ultra vires the IBC to invoke the provisions of the Companies Act, in the absence of any specific provision in the Code or Rules permitting such invocation – Ashok Velamur Seshadri, Liquidator of M/s. Archana Motors Pvt. Ltd. Vs. Shibu Job Cheeran Suspended Managing Director of Archana Motors Pvt. Ltd. – NCLT Kochi Bench Read Post »

Once Liquidator applies to the NCLT for the decision to sell the movable and immovable assets of the Corporate Debtor in liquidation by adopting a particular mode of sale and NCLT grants approval to such a decision, there is no provision in the IBC that empowers the NCLAT to suo motu conduct a judicial review of the said decision – R.K. Industries (Unit-II) LLP Vs. H.R. Commercials Pvt. Ltd. and Other – Supreme Court of India

Hon’ble Supreme Court observed that only two points arise for consideration in these appeals. Firstly, whether the respondent No.2 – Liquidator was justified in discontinuing the Second Swiss Challenge Process for the sale of a part of the assets of the Corporate Debtor wherein the appellant – R.K. Industries was declared as an Anchor Bidder and opting for a Private Sale Process through direct negotiations in respect of the composite assets of the Corporate Debtor? If so, was the NCLAT justified in directing the respondent No.2 – Liquidator to restart the entire process of Private Sale after issuing an open notice to prospective buyers instead of confining the process to those parties who had participated in the process earlier?

Once Liquidator applies to the NCLT for the decision to sell the movable and immovable assets of the Corporate Debtor in liquidation by adopting a particular mode of sale and NCLT grants approval to such a decision, there is no provision in the IBC that empowers the NCLAT to suo motu conduct a judicial review of the said decision – R.K. Industries (Unit-II) LLP Vs. H.R. Commercials Pvt. Ltd. and Other – Supreme Court of India Read Post »

The standards and norms of transparency, fairness and responsibility should be adopted without any qualification or reservation and all prospective bidders should get sufficient notice and time to enable them to participate in the bidding in an effective manner – R.K. Industries (Unit-II) LLP Vs. HR Commercials Pvt. Ltd. – NCLAT New Delhi

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The standards and norms of transparency, fairness and responsibility should be adopted without any qualification or reservation and all prospective bidders should get sufficient notice and time to enable them to participate in the bidding in an effective manner – R.K. Industries (Unit-II) LLP Vs. HR Commercials Pvt. Ltd. – NCLAT New Delhi Read Post »

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