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2020 (10) TMI 769 - NATIONAL COMPANY LAW TRIBUNAL , KOLKATA BENCHApproval of the sale of Corporate Debtor as a going concern to M/s. Geosoft Distributors Private Limited by way of private sale without any liabilities and with immunity from existing litigations, if any, against the Corporate Debtor - private sale be allowed to be distributed as per order of priority specified in Section 53 of the Insolvency and Bankruptcy Code, 2016 and remaining outstanding liabilities be extinguished - HELD THAT:- It is worth noting that no valuation by any of the valuers of licences/brand owned by the Corporate Debtor has been done although it is being sought to be transferred. Legal validity of the proposal made by the liquidator - HELD THAT:- First of all, sale of Corporate Debtor as a going concern without transfer of liabilities is not in consonance with the provisions of Regulation 32A(3) read with Regulation 32(e) & (f), hence, for this reason alone it is not acceptable and thus, rejected. The pleas made by the Liquidator as regards the continuance of licences in the name of the Corporate Debtor, waiver of penalties/other penal actions in relation to non-compliance by the Corporate Debtor etc. are outside jurisdiction of Adjudicating Authority - Further, there are no specific provisions like Section 30 of IBC, 2016 as applicable to approval of resolution plan, hence, in liquidation, approval of sale of assets by Adjudicating Authority cannot empower the buyer of the assets to have such benefits. In this regard, we are further of the view that the moment liquidation is ordered, any proceedings under any law can continue which had been pending before the order of liquidation being passed. This is as per the provisions of Section 33(5) of IBC, 2016. Hence, such pleas made by liquidator are rejected. Sale as a going concern involves transfer of both assets and liabilities or group of assets or liabilities which are clubbed together. The purpose of such clubbing is that the business entity should continue along with its employees. Further, sale of a going concern essentially involves slump sale wherein no specific values are assigned to individual assets and undertaking is sold as a whole along with the liabilities. However, in the present case, only tangible assets have been valued on individual basis. Thus, from this angle also, the proposal made by the Ld. Liquidator is not in accordance with the generally accepted practices, hence, rejected. Further, if the liabilities are excluded and the valuation of the Corporate Debtor is done on the basis of only tangible assets, then, even though the consideration is apparently more than the reserve price, but in real sense, it is equivalent to giving the entity on a platter to the prospective buyer. In the present case, it is not in dispute that the valuation of the intangible assets i.e. licences has not been done at all. Considering the fact that no valuation has been done over intangible assets and proposal based upon the valuation of tangible assets and its reserve price to transfer the Corporate Debtor as a going concern when associated liabilities is not in consonance with the provisions of the IBC, 2016 read with Regulation made thereunder, this application filed by the Liquidator is rejected.
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