GCS-Going Concern Sale Time Extension

Regulation’s outer-limit for going concern sale and liquidation prescribes a period of 90 days from the date of receipt of Letter of Intent for the payment of sale consideration, if any sale has to be consummated as a Going Concern – VDB Projects Pvt. Ltd. Vs. Anil Mehta, Liquidator of Pratibha Industries Ltd. – NCLT Mumbai Bench

The Adjudicating Authority held that IBC, 2016 has been introduced to ensure the resolution of companies facing financial distress (known as Corporate Debtors) and in the failure of the same, the process of liquidation to be done in a time bound manner. Therefore, the present application which is filed seeking extension of time to deposit the unpaid consideration. For the similar issue, the Bench had directed the applicant to deposit the consideration vide order dated 03.06.2022 and the same was breached by the Applicant who is now praying for extension.

Regulation’s outer-limit for going concern sale and liquidation prescribes a period of 90 days from the date of receipt of Letter of Intent for the payment of sale consideration, if any sale has to be consummated as a Going Concern – VDB Projects Pvt. Ltd. Vs. Anil Mehta, Liquidator of Pratibha Industries Ltd. – NCLT Mumbai Bench Read Post »

NCLT cancelled sale of Pratibha Industries Limited on a going concern & directed Liquidator to get assets valued again and issue fresh e-Auction sale notice – VDB Projects Pvt. Ltd. Vs. Anil Mehta, Liquidator of Pratibha Industries Ltd. – NCLT Mumbai Bench

The Adjudicating Authority held that it not inclined to give benefit of provision of 90 days to pay balance sale consideration as per amended clause 12 of Schedule I of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. Relying on Circular issued by the IBBI, we hold that benefit cannot be granted as the liquidation order in the proceeding was passed before the amendment dated 25.07.2019 benefit under amended clause 12, could not be granted. Therefore, EAuction dated 15.02.2022 is null and void as bad in law.

NCLT cancelled sale of Pratibha Industries Limited on a going concern & directed Liquidator to get assets valued again and issue fresh e-Auction sale notice – VDB Projects Pvt. Ltd. Vs. Anil Mehta, Liquidator of Pratibha Industries Ltd. – NCLT Mumbai Bench Read Post »

Inherent powers under Rule 11 of NCLT Rules, 2016 cannot be invoked when express provisions have been made in the Regulation 32A of Liquidation Process Regulations, 2016 for levy of interest in case of delayed payments – Sarda Mines Pvt. Ltd. Vs. Shailendra Ajmera Liquidator of Kwality Ltd. – NCLT New Delhi Bench Court-III

The Adjudicating Authority held that it is amply clear that interest is chargeable in case the payment is not made within 30 days from the execution of the LOI. Further, nowhere in the IBC or the Regulations thereto, there is any provision which empower the Tribunal to waive interest. It held that when express provisions have been made in the IBBI (Liquidation Process) Regulations, 2016 for levy of interest in case of delayed payments and also the process memorandum and terms of sale under the LOI provide for levy of interest, we do not feel it appropriate invoke the inherent powers under Rule 11 of NCLT Rules, 2016 in the present case.

Inherent powers under Rule 11 of NCLT Rules, 2016 cannot be invoked when express provisions have been made in the Regulation 32A of Liquidation Process Regulations, 2016 for levy of interest in case of delayed payments – Sarda Mines Pvt. Ltd. Vs. Shailendra Ajmera Liquidator of Kwality Ltd. – NCLT New Delhi Bench Court-III Read Post »

If the liquidation of the Corporate Debtor is to be done as a going concern, an additional 90 days is allowed beyond one year for completion of liquidation process – BDR Builders and Developers Pvt. Ltd. Vs. Mohan Lal Jain, Liquidator – NCLAT New Delhi

Regulation 47 of the Liquidation Regulations provides “Model time- line for liquidation process”. According to this regulation, from the date of commencement of liquidation and appointment of liquidator under sections 33 and 34 of IBC the time provided for completion of liquidation process is 365 days. Further, sub-regulation (1) under Regulation 44. Thus if the liquidation of the Corporate Debtor is to be done as a going concern, an additional 90 days is allowed beyond one year for completion of liquidation process.

If the liquidation of the Corporate Debtor is to be done as a going concern, an additional 90 days is allowed beyond one year for completion of liquidation process – BDR Builders and Developers Pvt. Ltd. Vs. Mohan Lal Jain, Liquidator – NCLAT New Delhi Read Post »

Regulation 47 of Liquidation Process deals with only model timelines which are directory and not mandatory, extension of time under Liquidation can be allowed in exceptional circumstances – Prakash Chandra Kapoor Vs. Vijay Kumar Iyer, (Liquidator) – NCLAT New Delhi

NCLAT held that it just & expedient to exercise our inherent powers under Rule 11 of the NCLAT Rules, 2016 to extend the period by six weeks to enable the Liquidator to attempt the Sale as a Going Concern. The timelines under Regulation 47 for Liquidation Process, are directory. Procedural law should not be construed as an obstruction but as an aid to Justice. Extension of time under Liquidation may be allowed only on the satisfaction that there exists exceptional circumstances. What is mandated in the Code in Section 35(1)(e) is to ‘carry on business’ for its ‘beneficial Liquidation’. The Regulation therefore cannot override the objective of ‘beneficial liquidation’ provided for in Section 35(1)(e) of the Code.

Regulation 47 of Liquidation Process deals with only model timelines which are directory and not mandatory, extension of time under Liquidation can be allowed in exceptional circumstances – Prakash Chandra Kapoor Vs. Vijay Kumar Iyer, (Liquidator) – NCLAT New Delhi Read Post »

Adjudicating Authority grants an extension of a period of 90 days to the successful bidder in the E-Auction for completing the purchase of the Corporate Debtor as going concern and waiver for payment of interest for the that period, the same shall be left to the commercial wisdom and discretion of the stakeholders – M/s. Gabs Megacorp Limited Vs. Mr. Sutanu Sinha Liquidator for IVRCL Ltd – NCLT Hyderabad Bench

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Adjudicating Authority grants an extension of a period of 90 days to the successful bidder in the E-Auction for completing the purchase of the Corporate Debtor as going concern and waiver for payment of interest for the that period, the same shall be left to the commercial wisdom and discretion of the stakeholders – M/s. Gabs Megacorp Limited Vs. Mr. Sutanu Sinha Liquidator for IVRCL Ltd – NCLT Hyderabad Bench Read Post »

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