9911796707
TMI Blog2020 (10) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of the Corporate Debtor shall be renewed/extended by the concerned Government authorities to enable the Corporate Debtor to operate its business as a going concern and all consequences for non-compliances in the past under various laws in the period prior to this private sale shall stand waived. It has also been prayed that all incentives and benefits granted to the Corporate Debtor shall continue to remain valid and the Government authorities will not be entitled to withdraw such benefits and incentives due to change in ownership. It has also been stated that existing equity shares shall stand extinguished and fresh shares shall be allotted to Geosoft Distributors Private Limited. 2. The relevant facts are that Corporate Insolvency Resolution Process ("CIRP") was initiated on 12th April, 2017. Present Liquidator had been appointed as Resolution Professional ("RP"). On failure of CIRP, Liquidation Order was passed on 15th December, 2017. Eight Progress Reports have been filed by the Liquidator. Valuation was done and report from both the Valuers were received on 12th April, 2018. Stakeholders' meetings were also held. In the meantime, on 25th April, 2019, a letter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were sought: "(1) Intangible assets, if any, such as manufacturing licences, trading licences etc. owned by the company. If so what is the valuation thereof ? (1) As per valuation report, there was an advance income tax of Rs. 1,72,04,095/- as on 6th January, 2018. This amount is net of provision. Whether return had been filed or this amount has been received as a refund ? (2) There are investments in equity of various private limited companies and in gold coins -what is current status and valuation of these as liquidation value has been taken as NIL ? (3) There were short term advances to be recovered in cash and kind unsecured but considered good. The value has been stated as Rs. 36,29,00,683/- as on 6th January, 2018 -what is current status ? (4) Financial statements for 31.03.2018, 31.03.2019 and provisional financial statement as on 30.09.2019. (5) Evidence regarding contacts with other business entities engaged in similar business. (6) Capability of prospective bidder to run the Corporate Debtor as going concern." 5. The Ld. Liquidator submitted that outstanding balances including trade receivables were based on last audited Annual Accounts for financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 4 Pradeep Saraf (Through his Advisor) Several Meetings From the perusal of the above chart, it is noted that no evidence of communication with party no. 3 and 4 has been produced. Only one communication from party no. 1, i.e. letter dated 21st December, 2017 has been attached. No response of the liquidator has been attached, particularly, when the said party showed interest to purchase the Corporate Debtor because the Corporate Debtor was having three liquor licences in Kolkata and adjoining areas. As regards the correspondence with the second party, only a mail sent on behalf of the liquidator dated 10th October, 2018 has been attached. Response of the said party, if any, has not been provided. 7. We have also perused the Valuation Reports. As per the valuation report of M/s. Adroit Technical Services Private Limited, copy of which has been placed at page no. 65, following valuation has been done in respect of various assets: Particulars Fair Market Value (INR) Liquidation Value (INR) Shops located at Kolkata 1,35,44,600 1,03,73,200 Stock of Goods 4,59,036 3,81,040 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; period exceeding six months from the date they were due for payment 539898725 16196962 11. The valuation of short term loan & advances at page no. 87 had been shown as under:- S. No. Short term loans and advances Book value as on 6th January 2018 (In INR) Liquidation value (in INR) (Unsecured but considered good) 1 Balance with Govt. Authorities 6,09,609 - 2 Advances to be recovered in cash or kind 36,23,09,074 - Total 36,29,18,683 NM 12. The other report has been prepared by M/s. Engineers & Valuers Collaborated. The valuation of Flat at page 97 had been arrived at as under:- Item Area in sft Rate/sft (In Rs) Value (Rs. In lakhs) Flat on ground floor 683 10920.00 74.58 Flat on 1st floor 473 7644.00 36.16 2nd floor (Terrace) 756 7644.00 57.79 Total 110.74 13. The valuation of other assets has been arrived as mentioned at page no. 99 as under:- Nature of other Curr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of sale under sub-regulation (1), the group of assets and liabilities of the corporate debtor, as identified by the committee of creditors under sub-regulation (2) of regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 shall be sold as a going concern. (3) Where the committee of creditors has not identified the assets and liabilities under sub-regulation (2) of regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the liquidator shall identify and group the assets and liabilities to be sold as a going concern, in consultation with the consultation committee. (4) If the liquidator is unable to sell the corporate debtor or its business under clause (e) or (f) of regulation 32 within ninety days from the liquidation commencement date, he shall proceed to sell the assets of the corporate debtor under clauses (a) to (d) of regulation 32. 33. Mode of Sale. (1) The liquidator shall ordinarily sell the assets of the corporate debtor through an auction in the manner prescribed in Schedule I. (2) The liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation 12(3)(a) keeping in view the value of the asset intended to be sold by auction. (6) The liquidator shall provide all assistance necessary for the conduct of due diligence by interested buyers. (7) The liquidator shall sell the assets through an electronic auction on an online portal, if any, designated by the Board, where the interested buyers can register, bid and receive confirmation of the acceptance of their bid online. (8) If the liquidator is of the opinion that a physical auction is likely to maximize the cealization from the sale of assets and is in the best interests of the creditors, he may sell assets through a physical auction after obtaining the permission of the Adjudicating Authority. The liquidator may engage the services of qualified professional auctioneers specializing in auctioning such assets for this purpose. (9) An auction shall be transparent, and the highest bid at any given point shall be visible to the other bidders. (10) If the liquidator is of the opinion that an auction where bid amounts are not visible is likely to maximize realizations from the sale of assets and is in the best interests of the creditors, he may apply, in writing, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending 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. 17. It is further noted that 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
