2022 (1) TMI 768 - Tri - Insolvency and Bankruptcy

Seeking sale as a going concern - Section 35(1) (f) 60(5) of the Insolvency Bankruptcy Code 2016 r/w Reg. 32(f) and 32A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations Rule 11 of the NCLT Rules 2016 - HELD THAT - Since the interests of all the stakeholders have been taken care of and the Secured Financial Creditor (Erstwhile CoC) has also approved it was submitted that this Tribunal may be pleased to pass necessary orders for sale of the corporate debtor as going concern. IA/463/C HE/2021 is the amendment Application seeking modification in the prayers in IA/199/CHE/2021 and the same is hereby allowed. The Liquidator is permitted to sell the assets of the Corporate Debtor as a going concern to the Respondent as per Regulation 32A of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation 2016. The Liquidation period in respect of the Corporate Debtor is extended for a period of 6 months from the date of this order - Application disposed off.

Summary

Issues:
1. Application for sale as a going concern under the Insolvency and Bankruptcy Code.
2. Application for extension of the liquidation period.
3. Application for amending the initial application.
4. Approval of the sale of the Corporate Debtor as a going concern by the Secured Financial Creditor Meeting.
5. Consideration of interests of stakeholders and approval for sale by the Tribunal.

Analysis:

1. The Liquidator filed an application seeking sale as a going concern under Section 35(1)(f) & 60(5) of the Insolvency & Bankruptcy Code, 2016. The application aimed at selling the assets of the Corporate Debtor to a potential buyer for revival and rehabilitation purposes. The Liquidator highlighted the benefits of selling as a going concern, emphasizing the continuity of operations, value unlocking, settlement of dues, business realignment, and employment generation. The proposal included settling outstanding dues to the Financial Creditor and prioritizing CIRP and liquidation costs.

2. Another application sought an extension of the liquidation period by one year, indicating the need for additional time to facilitate the sale process and maximize the value of the assets. The Tribunal granted the extension to ensure a comprehensive liquidation process.

3. An application was made for amending the initial application to address specific requirements or modifications necessary for the sale as a going concern. The amendment was allowed to ensure the application aligned with the evolving circumstances and requirements of the process.

4. The approval of the sale of the Corporate Debtor as a going concern by the Secured Financial Creditor Meeting was a crucial step in the process. The meeting in-principally approved the proposal/resolution plan of the potential buyer, authorizing the Liquidator to seek necessary approval from the Tribunal. This approval signified the stakeholders' interests being considered and paved the way for the Tribunal's decision.

5. The Tribunal, considering the submissions, approved the sale of the Corporate Debtor as a going concern to the Respondent. The decision was based on the interests of stakeholders being addressed, especially the approval from the Secured Financial Creditor Meeting. Additionally, the Tribunal extended the liquidation period by six months to facilitate a smooth transition and ensure the effective implementation of the sale process.

In conclusion, the judgment addressed various applications related to the sale of the Corporate Debtor as a going concern, emphasizing stakeholder interests, approval processes, and the need for extensions to facilitate a comprehensive liquidation process in line with the provisions of the Insolvency and Bankruptcy Code.