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TMI Blog2022 (6) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... x Mart Limited & State Bank of India N.R.A. Trading Co., a proprietorship firm through its proprietor Sh. Naresh Kumar & Sons (HF) Versus Sh. Ravinder Kumar Goel, Liquidator of M/s Supreme Tex Mart Limited, State Bank of India HON'BLE MR. HARNAM SINGH THAKUR, MEMBER (JUDICIAL) And HON'BLE MR. SUBRATA KUMAR DASH, MEMBER (TECHNICAL) For the Applicants in : Mr. Sandeep Wadhawan, Advocate IA No.227/2021 & IA No.228/2021 For the Applicant in IA No.536/2021 : Mr. V.K. Sachdeva, Advocate For the Applicant in : Mr. Rakshit Gupta, Advocate IA No.285/2021 Mr. Rakesh Gupta, Advocate For the Respondent No.1 : Mr. Atul V Sood, Advocate in IA No.227/2021, Mr. Nahush Jain, Advocate IA No.228/2021, IA No.536/2021, IA No.285/2021, IA No.286/2022, IA No.287/2022 & IA No.288/2022 For the Respondent No.2 : Mr. Rakshit Gupta, Advocate in IA No.227/2021 Mr. Rakesh Gupta, Advocate For the Respondent No.3 : Mr. Anand Chibbar, Senior Advocate in IA No.227/2021 Mr. Vaibhav Sahni, Advocate For the Applicant in : Mr. Kuldeep Singh, Advocate IA No.286/2022, IA No.287/2022 & IA No.288/2022 For the Respondent No.2 : Mr. Rakshit Gupta, Advocate in IA No.286/2022, IA No.287/2022 & IA No.288/2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions have repeatedly failed. 8. The applicants have alleged that the Liquidator has put the entire assets of the corporate debtor at a reserve price of Rs.96 Crores with the date of the auction as 27.01.2021. On 25.01.2021, this Tribunal permitted the applicants to give a bid in the auction to be held by the Liquidator and further directed the Liquidator to consider the same and take an appropriate decision in accordance with the law. 9. Subsequent to the same order dated 25.01.2021, the applicants carried out a plant visit and submitted that some of the machinery parts and production accessories, auxiliary and spare parts were found missing by him from the factory. Despite such conditions, the applicant had given a bid price of Rs.80 Crores for STML as a going concern in pursuance of the order dated 25.01.2021. The copy of the bid submitted by the applicant is attached as Annexure A-10 of the application. 10. It is further submitted that when the applicants had given the bid for the purchase of corporate debtor, the Liquidator was in process of privately selling units to the other parties at a very less amount. The Liquidator ultimately sold the part of the corporate debtor i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard the learned counsel for the applicants and respondents and perused the record carefully. 15. At the outset, we may refer to Regulation 33 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 which is to the following effect: " 33. Mode of sale 33. (1) The liquidator shall ordinarily sell the assets of the corporate debtor through an auction in the manner specified in Schedule I. (2) The liquidator may sell the assets of the corporate debtor by means of private sale in the manner specified in Schedule I when- (a) the asset is perishable; (b) the asset is likely to deteriorate in value significantly if not sold immediately; (c) the asset is sold at a price higher than the reserve price of a failed auction; or (d) the prior permission of the Adjudicating Authority has been obtained for such sale: Provided that the liquidator shall not sell the assets, without prior permission of the Adjudicating Authority, by way of private sale to- (a) a related party of the corporate debtor; (b) his related party; or (c) any professional appointed by him. (3) The liquidator shall not proceed with the sale of an asset if he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IA No.227/2021 stands dismissed and disposed of. IA No.228/2021 This is an application filed by Mr. Ajay Gupta and Mr. Gautam Gupta, Ex-Promoters of M/s Supreme Tex Mart Limited in the case of Allahabad Bank Versus Supreme Tex Mart Limited under Rule 11 of the NCLT Rules, 2016. 2. The present application is filed seeking directions to be issued to liquidator for the sale of corporate debtor as a going concern and to consider the bid of the applicant. 3. The facts submitted by the applicants in this application are identical to that of IA No.227/2021 which is also filed by the same applicants. The sum and substance of this application is that the Liquidator be prevented from selling the assets of the corporate debtor at a lower price to any other bidder except for the applicants who are also Ex-promoters of the corporate debtor. The applicants claim the priority in the sale should be given to the original promoter and also claims that a different approach should be adopted for MSME. The applicants have submitted a financial bid of Rs.80 Crores which an offer to pay Rs.8 Crores as of upfront payment on approval of the bid by the Liquidator. 4. We have heard the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing concern and on 31.10.2020, 24.12.2020 and 27.01.2021 in lots/parcels. 5. The present IA is linked to IA No.227/2021 and 228/2021 relating to the sale of the corporate debtor-Supreme Text Mart Limited. M/s Bluechip Worldwide Yarn Private Limited proposes to buy the corporate debtor -Supreme Text Mart Limited as a going concern. It is stated that the benefits of sale of the corporate debtor as a going concern are; there will not be dissolution of the Corporate Debtor and the business of the Corporate Debtor will be carried out and the interests of employees would be protected. The applicant has cited the decision of the Hon'ble NCLAT in the matter of Mohan Gems & Jewels P. Ltd. Vs. Vijay Verma and Anr. Vide judgement dated 24.08.2021 and also the decision of the Hon'ble NCLT, Mumbai Bench, in the matter of Gaurav Jain Vs. Sanjay Gupta, vide judgment dated 09.03.2021, wherein the sale of the corporate debtor as a going concern has been held to be the preferred option to dispose of, to realise the value for maximize realization of the corporate debtor. 6. The applicants have prayed that the Liquidator be directed to make an attempt to sell the corporate debtor as a going concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o perform his duties on health grounds and Mr. Ravinder Kumar Goel was appointed as Liquidator w.e.f 01.11.2019. When the liquidation order was passed, the Liquidator was required to make the list of stakeholders, and said list was prepared by Sh. Bhupesh Gupta (Erstwhile Liquidator). The Liquidator was required to constitute a Consultation Committee within 60 days from the liquidation commencement date based on the list of stakeholders prepared under Regulation 31. The amended Regulation 31A stood incorporated in the Liquidation Regulations vide notification dated 25.07.2019. However, Sh. Bhupesh Gupta (Erstwhile Liquidator) did not implement the same. The newly appointed Liquidator - Mr. Ravinder Kumar Goel did not constitute the said Committee on the ground that the liquidation process commence prior to the amendment in the liquidation Regulations. The Joint Lender meeting of all the financial institutes had requested the Liquidator to constitute the Committee but the same was declined vide a letter dated 12.02.2021. The said communication is attached as Annexure A-6 of the application. 3. The Respondent has filed reply and short written submission vide Diary No.00625/1 dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittee as mentioned in Regulation 31A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 introduced by Notification dated 25.07.2019 needs to be constituted in the present case where the liquidation process commenced on 08.08.2018, i.e. much prior to the date of introduction of the said Regulation. 9. The Insolvency and Bankruptcy Board of India, in exercise of the powers conferred by Clause (t) of sub-Section (1) of Section 196 read with Section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016) has introduced Regulation 31A in the Liquidation Process Regulation, 2016. It is also noted that there is no mention of the retrospective application of the provisions in the relevant notification. It is also settled law that all laws are presumed to be prospective unless the Legislature unequivocally expresses its intent for the operation of such provisions retrospectively. Furthermore, Regulation 31-A has the effect of a substantive law as it creates new procedure, duties, rights and obligations which did not exist earlier and thus has to be applied prospectively. Though, in the present case, there is a change in the present Liquidator who w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idation cost. The total claims submitted by the applicants are as under:- Sr. No. Party Name CIRP Cost Liquidation Cost 1 Juneja Woollen Mills 3,68,358.00 50,58,905.00 2 V.N. Yarns 6,52,555.00 NIL 3 N.R.A. Trading Co. 1,01,43,406.15 NIL 5. It is further submitted by the applicants that their claims have been approved in liquidation cost but the same amount is not released till now. The Erstwhile Liquidator was relieved from its duties vide order dated 01.11.2019, however, no transaction audit or forensic audit was conducted during the CIRP or by new Liquidator. 6. It is alleged that the Erstwhile Liquidator has misappropriated the funds and has also sold the stocks unofficially. It is further alleged that the current Liquidator has sold one unit of the corporate debtor by way of the private sale to some third party. The said sale has been conducted at a very low price which may result in no recovery of amount of applicants. It is also stated that one of the units of corporate debtor is sold by the liquidator to the third party who is in steel business, whereas a price much more than the sold price can be fetched by selling the same to some other entity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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