Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2022 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 96 - AT - Insolvency and BankruptcySale of the Corporate Debtor as a Going Concern - Correctness of e- Auction Process conducted by the Liquidator - direction for initiation of fresh bidding process for sale of the Assets of Corporate Debtor - direction to complete the entire process within specified time from the date of Order, inviting fresh bids and according an opportunity to the interested bidders - whether the Appellant-Liquidator committed any material irregularity in conducting e-Auction of Corporate Debtor as a going Concern, if so the irregularity is material which vitiates the entire Auction process and whether the Auction is liable to be set aside? HELD THAT:- In the present facts of the case, the Liquidator/Appellant issued corrigendum extending time not an addenda. Irrespective of nomenclature of the Notification, the purport of the Notification if taken as it is, the Notification dated 24.08.2021 i.e., by the corrigendum is intended to extend time for submission of documents of EMD and change of date and time of Auction. Admittedly, the Liquidator received no documents of EMD till expiry of time limited in the Original Notification dated 24.06.2021 and thus nobody intends to participate in the e-Auction Process. Therefore, it is the duty of the Liquidator to afford an opportunity to inspect the Corporate Debtor enabling the participant or interested bidders to submit the EMD Application, as participation in the e-Auction Process is to maximize the Assets of the Corporate Debtor. On account of failure to fix date and time for inspection of ‘Corporate Debtor’ by the interested bidders before conducting the Auction, possibility for submission of documents of EMD to participate in the e-Auction would not arise normally, thereby the questions of maximization doesn’t arise hence it is a matter of serious material irregularity, which vitiates the entire e-Auction Process. In the present case, the Liquidator made an attempt to sell the Corporate Debtor as a Going Concern by Public Auction but committed a serious material irregularity in issuing corrigendum for extension of time for both submission of EMD documents and date and time for Auction, without specified date and time of inspection of ‘Corporate Debtor’ which vitiates the entire process. Time Limitation - HELD THAT:- The completion of Liquidation Process within one year in terms of Regulation 32A(4) is not mandatory. The main endeavor of the Liquidator must be value of maximization of the ‘Corporate Debtor’ in case of holding the Auction in a hurried manner without complying the procedure, it would vitiate the entire proceedings. The Appellant has thus committed a material irregularity which resulted in reduction of amount to be distributed among the Creditors and against the interest of the Committee of Creditors and so also failed to maximize the value of the ‘Corporate Debtor’. Though, Regulation 32A(4) is not mandatory - there are no ground to interfere with the well- considered Order of the Adjudicating Authority, warranting interference of this Tribunal. Appeal dismissed.
|