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2021 (8) TMI 1000 - AT - Insolvency and BankruptcySeeking for closure of the Liquidation Process - Corporate Debtor was being sold as a going concern in the e-Auction - Whether the Liquidator is authorized to sell the ‘Corporate Debtor’ as a going concern pursuant to Regulation 32 of IBBI (Liquidation Process) Regulations, 2016? - Regulations 39C of CIRP Regulations and 32A, 45(3) of the Liquidation Process Regulations are inconsistent with Section 54 of the Code or not - interpretation by the Adjudicating Authority of the provisions of the Code and ‘Liquidation Process Regulations’ in the Order impugned is contrary to the scope and spirit of the I&B Code or not - HELD THAT:- It is seen that the Hon’ble Apex Court in a catena of Judgements has time and again observed that ‘Liquidation’ should be the last resort only if the Resolution Plan submitted is not up to the mark and even in Liquidation, the Liquidator can sell the business of the ‘Corporate Debtor’ as a ‘going concern’ - Regulations 32A and 45(3) which were inserted in the Liquidation Process Regulations subsequent to ARCELORMITTAL INDIA PRIVATE LIMITED VERSUS SATISH KUMAR GUPTA & ORS. [2018 (10) TMI 312 - SUPREME COURT] and SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [2019 (1) TMI 1508 - SUPREME COURT] specifically define the process for sale of ‘Corporate Debtor’ or its business as a going concern. IBBI in furtherance of its delegated power has framed the regulations in accordance with the objectives and also as empowered under Section 240 of the Code. As per Section 241 of the Code, every rule and regulation made under the Code will be placed before the Parliament. For a total period of 30 days for both Houses to make any modification or annulment - Regulation 32-A(1) emphasizes the importance placed on the transfer of the ‘Corporate Debtor’ or its business on a going concern basis. Regulation 39C of CIRP Regulations read with Regulations 32, 32A and 45(3) of Liquidation Process Regulations, it is clear that under Regulation 39C, the CoC may recommend that the Liquidator may first explore sale of the ‘Corporate Debtor’ as a going concern under Clause (e) of Regulation 32 or Sale of the business of the ‘Corporate Debtor’ under Clause (f) of Regulation 32. 32A provides that if the Liquidator is of the opinion that sale under Clause (e) or (f) of Regulation 32 shall maximize the value of the ‘Corporate Debtor’, he shall endeavor to sell under the said Clauses 32-(A)-2 provides that for the purpose of sale under Sub-Regulation (1) the group of assets and liabilities of the ‘Corporate Debtor’, as identified by the CoC under Sub-Regulation (2) of Regulation 32C of the CIRP Regulations, shall be sold as a going concern - the Liquidator has rightly followed the procedure specified in Regulation 32A of the Liquidation Process Regulations. It is a well settled proposition that the legality and propriety of any Regulation/Notification/Rules/Act cannot be looked into by NCLT or NCLAT. The Tribunal can only ascertain whether the procedures provided for under the Code/Companies Act, 2013 are being followed or not. The Adjudicating Authority cannot go beyond this. The sale of the ‘Corporate Debtor Company’ was carried out by the Liquidator in accordance with the Regulations and we are constrained to observe that the Adjudicating Authority, has, apart from travelling beyond its jurisdiction in making observations regarding the power and functions of framing of Regulations by IBBI - Appeal allowed.
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