LiquSale-Auction Sale

At belated stage, after the sale of Corporate Debtor under Liquidation confirmed, the objections raised by a Prospective Bidder cannot be entertain especially when there is no allegation of fraud – JSK Estate Pvt. Ltd. Vs. Mr. Sundaresh Bhat, Liquidator of EMCO Ltd. and Anr. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that:

(i) It is settled law that sale on ‘as is where is’ basis in liquidation does not necessarily mean that the successful bidder has to bear past liabilities which get settled as per Section 53 of the Code. Even if the auction notice contained clause of ‘as is and where is basis’ or of encumbrances, no fault can be found with the liquidator for having issued such a notice.
(ii) The Liquidator was quite justified in doing so in order to be on the safer side and to avoid incurring any future liability out of the proposed sale. There is nothing wrong if the successful bidder approached the Hon’ble NCLT for various reliefs and concessions with respect to ‘clean slate’ and for transfer of assets without encumbrances and if the appropriate reliefs and concessions were granted as per the settled law.
(iii) A successful bidder of a property in liquidation proceedings under the IBC is always at liberty to seek certain reliefs and concessions on the principle of clean slate.

At belated stage, after the sale of Corporate Debtor under Liquidation confirmed, the objections raised by a Prospective Bidder cannot be entertain especially when there is no allegation of fraud – JSK Estate Pvt. Ltd. Vs. Mr. Sundaresh Bhat, Liquidator of EMCO Ltd. and Anr. – NCLT Mumbai Bench Read Post »

NCLT allows distribution of Intangible Assets being Book Debts which remain unsold (Unsold Assets), amongst the stakeholders under Regulation 38 of Liquidation Process Regulations – Pratap Mukherjee Liquidator of Janpragati Commodities Pvt. Ltd. – NCLT Kolkata Bench

Hon’ble NCLT Kolkata Bench observed that in the instant matter the intangible assets being the book debts remain unsold and hence the Liquidator is seeking to distribute the same amongst the stakeholders. Since the efforts of the Liquidator in realizing the intangible assets have borne no fruit, the options remaining with the SCC are to either identify the asset as not readily realizable assets under Regulation 37A of the Liquidation Process Regulations or to distribute the aforesaid unsold assets among the stakeholders under Regulation 38 of the Liquidation Process Regulations. The Liquidator, with the consent of the SCC in the 6th SCC Meeting, has decided to take the latter route.

NCLT allows distribution of Intangible Assets being Book Debts which remain unsold (Unsold Assets), amongst the stakeholders under Regulation 38 of Liquidation Process Regulations – Pratap Mukherjee Liquidator of Janpragati Commodities Pvt. Ltd. – NCLT Kolkata Bench Read Post »

No TDS is deductible from payment made towards liquidation sale of assets of the Corporate Debtor and any such deduction is to be refunded to the Corporate Debtor – Shri Kanekal Chandrasekhar Liquidator of Southern Batteries Pvt. Ltd. Vs. Chief Commissioner of Income Tax, Bengaluru – NCLT Bengaluru Bench

In this case, the Successful Auction Purchaser deducted TDS amount of Rs. 1,20,50,000 being 1% of the consideration of the immovable property.

Hon’ble NCLT Bengaluru Bench referring the order passed by the Hon’ble NCLAT in the matter of Om Prakash Agrawal Liquidator v. Chief Commissioner of Income Tax (TDS) and Anr. (2021) ibclaw.in 54 NCLAT, which has been followed by co-ordinate Benches, i.e., NCLT Mumbai in the matter of Nico Extrusions Ltd. Vs. Nicomet Industries Ltd and NCLT Ahmedabad in the matter of Sunil Kumar Agarwal Liquidator of Varia Engineering Works Pvt. Ltd. vs. Chief Commissioner of Income Tax (TDS) (2023) ibclaw.in 1030 NCLT, disposed of by directing the Income Tax Department to refund the amount of TDS into the account of Corporate Debtor, within one month from the date of this order.

No TDS is deductible from payment made towards liquidation sale of assets of the Corporate Debtor and any such deduction is to be refunded to the Corporate Debtor – Shri Kanekal Chandrasekhar Liquidator of Southern Batteries Pvt. Ltd. Vs. Chief Commissioner of Income Tax, Bengaluru – NCLT Bengaluru Bench Read Post »

No exception can be taken to the action of the Liquidator in cancelling the sale and forfeiting the amount deposited by Successful Auction Bidder having failed to deposit the balance amount – BRS Refineries Vs. Mr. Supriyo Kumar Chaudhari, Liquidator, JVL Agro Industries Ltd. – NCLAT New Delhi

Hon’ble NCLAT affirmed the decision of NCLT Allahabad Bench holding that when the Process Document itself contemplate issuance of Sale Certificate subject to order passed by NCLT, all bidders were clearly informed about the said contingency. When the bidder in any auction participate it is subject to all terms and conditions as provided in the E-auction Process Information Document and all bidders are binding to all terms and conditions of the Process Document.

No exception can be taken to the action of the Liquidator in cancelling the sale and forfeiting the amount deposited by Successful Auction Bidder having failed to deposit the balance amount – BRS Refineries Vs. Mr. Supriyo Kumar Chaudhari, Liquidator, JVL Agro Industries Ltd. – NCLAT New Delhi Read Post »

Whether Successful Auction Purchaser is entitled interest on sale consideration, in case delay in issuance of Sale Certificate by Liquidator – Gokul Agro Resources Ltd. Vs. Mr. Supriyo Kumar Chaudhuri Liquidator of JVL Agro Industries Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that the present is a case where assets have been handed over to the Appellant. Present is not a case where due to any reason, the Appellant is entitled for refund of sale consideration. In event the Appellant may be entitled for refund of sale consideration the prayer for refund of the sale consideration along with interest could have been considered. But, here the sale consideration, which was deposited and which has earned interest is in lieu of the assets, which have been ultimately sold to the Appellant and handed over to him. There is no merit in the submission of the Appellant that Liquidator should be directed to make payment of interest on the sale consideration, which was deposited by the Appellant due to delay in handing over of assets to the Appellant, which assets could not be handed over earlier due to restraint order of the Adjudicating Authority dated 04.04.2022, which could be vacated only on 01.06.2023.

Whether Successful Auction Purchaser is entitled interest on sale consideration, in case delay in issuance of Sale Certificate by Liquidator – Gokul Agro Resources Ltd. Vs. Mr. Supriyo Kumar Chaudhuri Liquidator of JVL Agro Industries Ltd. – NCLAT New Delhi Read Post »

Schedule-I of Liquidations Process Regulations, 2016 is directory in nature and not mandatory – Mr. Bhanu Pratap Singh Vs. Mr. Rakesh Jindal (Liquidator) – NCLAT New Delhi

Hon’ble NCLAT held that in any case the Schedule-I of Liquidations Regulations is directory in nature and not mandatory as is evident in the use of the word “shall ordinarily” in Regulation 33(1). When the mechanism of sale as specified in Regulation 32 is changed, the Schedule-I has to be followed afresh after every such change.

Schedule-I of Liquidations Process Regulations, 2016 is directory in nature and not mandatory – Mr. Bhanu Pratap Singh Vs. Mr. Rakesh Jindal (Liquidator) – NCLAT New Delhi Read Post »

[Joint sale of assets of Corporate Debtor and a Third Person/Guarantor] When subsequent E-auction Notice had come into existence then the Appellant is only to assail the subsequent E-auction Notice, if it so desires/advised – Ansio Industries Pvt. Ltd. Vs. Venkat Ram Spinners Pvt. Ltd. and Ors. – NCLAT Chennai

In this case, NCLAT pertinently points out, that obviously, the Learned Counsel for the Appellant/Petitioner is not desirous of assailing the subsequent E-auction Notice dated 15.02.2024, (being the later development, after the earlier Auction Notice dated 16.09.2023) and in the absence of any challenge to the subsequent E-auction Notice dated 15.02.2024, then in law, it amounts to waiver, Acquiescence and also Estoppel By Conduct of the Appellant/Petitioner.

[Joint sale of assets of Corporate Debtor and a Third Person/Guarantor] When subsequent E-auction Notice had come into existence then the Appellant is only to assail the subsequent E-auction Notice, if it so desires/advised – Ansio Industries Pvt. Ltd. Vs. Venkat Ram Spinners Pvt. Ltd. and Ors. – NCLAT Chennai Read Post »

If Auction sale notice was issued initially prior to the insertion of provision of Regulation 32A of IBBI Liquidation Process Regulations, 2016, Regulation 32A(4) cannot be pressed in service – Haravtar Singh Arora, Erstwhile promoter of James Hotel Vs. Navneet Gupta, Liquidator of James Hotel and Anr. – NCLAT New Delhi

Hon’ble NCLAT observed that submission is that under Regulation 32A sub-clause 4, auction did not take place within 90 days hence assets ought to have been sold under Clause ‘a’ to ‘d’. It is not denied that auction sale notice was issued initially prior to the insertion of provision of Regulation 32A, hence we are of the that in the auction, regulation 32A sub-clause (4) cannot be pressed in service.

If Auction sale notice was issued initially prior to the insertion of provision of Regulation 32A of IBBI Liquidation Process Regulations, 2016, Regulation 32A(4) cannot be pressed in service – Haravtar Singh Arora, Erstwhile promoter of James Hotel Vs. Navneet Gupta, Liquidator of James Hotel and Anr. – NCLAT New Delhi Read Post »

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