Sauria Construction Vs Kohinoor Pulp & Paper Private Limited (NCLT Kolkata)
NCLT Kolkata held that successful bidder of the Corporate Debtor is allowed to file application before Adjudicating Authority claiming reliefs and concessions, however, such reliefs and concessions cannot be too elaborate and general and must be in consonance with process document in the liquidation proceedings.
Facts- Adjudicating Authority, upon the filing of a petition u/s. 9 of the Code by Sauria Construction, the Operational Creditor, admitted the Corporate Debtor into Corporate insolvency Resolution Process (CIRP).
The Applicant participated in e-auction and made bid of an amount of Rs. 60,20,00,000/- for the purchase of the Corporate Debtor as a going concern. On 03.09.2022, the liquidator sent Letter of Intent and informed the Applicant that the E-Auction was completed on 31.08.2022 and as per the result of the process, the Applicant was the successful bidder. As of date the Applicant has paid the entire amount of consideration to the Liquidator along with interest and a sale certificate dated 14.12.2022 was also issued in favour of the Applicant.
The Applicant is a successful bidder for the sale of the Corporate Debtor as a going concern excluding the imported cooking plant and fibre line lying at CFS, Balmer Lawrie Kolkata and cash and cash equivalents.
The Applicant has filed the instant application, praying the Adjudicating Authority to grant various reliefs.
Conclusion- The primary goal of a resolution plan as well as the sale of a Corporate Debtor as a going concern remains the same i.e revival of the Corporate Debtor’s business. The struggles faced by the purchaser during the sale of a Corporate Debtor as a ‘going concern’ and that of the Successful Resolution Applicant are similar, if not the same. As such, comparable reliefs and concessions ought to be granted in both cases. As such, the law laid down in Ghanashyam Mishra ought to be made applicable to cases in which the Corporate Debtor has been sold as ‘going concern’.
Held that while the successful bidder is allowed the liberty to file application before the Adjudicating Authority claiming reliefs and concessions, the said reliefs and concessions cannot be too elaborate and general and must be in consonance with the process document in the liquidation proceedings.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
1. This Court convened through hybrid mode.
2. The interlocutory application being I.A. No. 1055/KB/2023 has been filed by the Applicant herein being the successful bidder of the Corporate Debtor under section 60(5)(C) of the Insolvency and Bankruptcy Code, 2016 (“ IBC”) with the following prayers:
a. To allow the present application;
b. To grant the reliefs/ concessions mentioned in Para 10 of the present application, to applicant as the corporate debtor is sold as going concern in liquidation; and
c. Any other order that the Hon’ble Tribunal may find fit in the facts and circumstances of the present case.
3. Submissions of the Applicant in I.A. no. 1055/KB/2023:
3.1 The case of the Applicants herein is that the Adjudicating Authority, upon the filing of a petition being CP (IB) 51 1/KB/201 8 under section 9 of the Code by Sauria Construction, the Operational Creditor, admitted the Corporate Debtor into Corporate insolvency Resolution Process (CIRP) on 21.08.2018. Thereafter, the Adjudicating Authority ordered the Corporate Debtor to be liquidated vide order dated 01.07.20191.
3.2 In compliance with the Code and in accordance with the Insolvency and Bankruptcy Board of India (Liquidation Process Regulation) 2016 (hereinafter referred to as the “Liquidation Process Regulation”), public announcement for E- Auction of the Corporate debtor as a going concern was published on 22.08.2022. The E-auction was decided to be conducted on 31.08.2022. The reserve price was set as Rs. 48,00,00,000/-. The Earnest Money Deposit (EMD)was set as Rs. 4,80,00,000/-.
3.3 The Applicant participated in e-auction and made bid of an amount of Rs. 60,20,00,000/- for the purchase of the Corporate Debtor as a going concern. On 03.09.2022, the liquidator sent Letter of Intent and informed the Applicant that the E-Auction was completed on 31.08.2022 and as per the result of the process, the Applicant was the successful bidder.
3.4 As on date the Applicant has paid the entire amount of consideration to the Liquidator along with interest and a sale certificate dated 14.12.2022 was also issued in favour of the Applicant.
3.5 The Applicant is a successful bidder for the sale of the Corporate Debtor as a going concern excluding the imported cooking plant and fibre line lying at CFS, Balmer Lawrie Kolkata and cash and cash equivalents.
3.6 In light of the aforementioned circumstances, the Applicant has filed the instant application, praying the Adjudicating Authority to grant the following reliefs:
