IBC Laws - Even though the Clause (1C) and (1D) of Schedule I to Liquidation Regulations is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes - S M Steels and Power Ltd. Vs. Pankaj Dhanuka Liquidator of Corporate Power Ltd.

Even though the Clause (1C) and (1D) of Schedule I to Liquidation Regulations is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes – S M Steels and Power Ltd. Vs. Pankaj Dhanuka Liquidator of Corporate Power Ltd. – NCLT Kolkata Bench

January 3, 2025

The Hon’ble NCLT Kolkata Bench held that the essence of Regulation 33(3) of the IBBI (Liquidation Process) Regulations is that in case a collusion exists it would lead to an under recovery of the assets of the Corporate Debtor which is against the primary purpose of the IBC, 2016. As can be made out from Regulations 33 Schedule I is 1C and 1D that even though the Schedule I is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes.

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(2024) ibclaw.in 1181 NCLT

IN THE NATIONAL COMPANY LAW TRIBUNAL
Kolkata Bench

S M Steels and Power Ltd.
v.
Pankaj Dhanuka (Liquidator)

IA.(IB )No. 586/ KB/2024. & IA.(IB )No. 995/ KB/2024 & IA.(IB )No. 447/ KB/2024 in C.P.(IB) No. 23 /KB/2019
Decided on 20-Dec-24

Ms. Bidisha Banerjee (Judicial Member) and Shri Balraj Joshi (Technical Member)

Add. Info:

Corporate Debtor: Corporate Power Ltd.

For Appellant(s) and Respondent(s): Mr. S.N . Mookerjee, Senior Advocate, Mr. Mainak Bose, Advocate, Ms. Manju Bhuteria, Advocate, Mr. Avisek Swaroop, Advocate, Mr. Seaipayan Basy, Advocate, Mr. Anupam Prakash, Advocate, Mr. Naman Chaudhary, Advocate , Mr. S.C. Prasad, Advocate, Mr. Avijit Tewary, Advocate, Mr. Sumitra Sarkar, Advocate, Mr. S. Sengupta, Advocate, Mr. Souvik Ghosh, Advocate, Mr. Abhrajit Roy Choudhary, Advocate, Mr. Joy Saha, Senior Advocate, Ms. Urmila Chakraorty, Advocate, Mr. Siddhartha Sharma, Advocate, Mr. Rishav Dutt, Advocate, Mr.Arjun Asthana, Adv., Ms. Shalini Basu,Adv., Mr.Aman Kataruka,Adv., Mr.Ratnanko Baneji,Sr.Adv., Mr.Anirban Ray,Adv., Mr.Shaunak Mitra, Adv., Mr.Zulfiqar Ali Alquaderi,Adv., Mr.Saptarshi Mandal, Adv., Mr.Mainak Bose, Adv., Mr.Soorjya Ganguli, Adv., Ms.Kiran Sharma, Adv., Mr.Mainak Bose, Adv., Ms.Simran More, Adv

Brief about the decision:

Regulation 33(3) of the IBBI (Liquidation Process) Regulations itself is quite clear that liquidator will not proceed to sell the assets of the CD in liquidation, if there is a reason to believe that there was an indication of a collusion between the buyers or the Corporate Debtor’s related parties and buyers or the Creditors and the buyers. The essence of the regulation is that in case such a collusion exists it would lead to an under recovery of the assets of the Corporate Debtor which is against the primary purpose of the Insolvency Bankruptcy Code, 2016.(p118)
As can be made out from Regulations 33 Schedule I is 1C and 1D that even though the Schedule I is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes.(p125)

Judgment/Order:

Click here for Order

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