Orissa Alloy Steel Private Limited Vs S M Steels And Power Limited (NCLAT Delhi)
NCLAT Delhi held that in terms of regulation 33(2)(d) of the Liquidation Process Regulations [LPR], liquidator is required to obtain prior permission of the Adjudicating Authority for conduct of private sale. Here, since prior permission is not obtained the same tantamount to an infraction of LPR.
Facts- The present is a set of two appeals filed under Section 61 of Insolvency and Bankruptcy Code 2016 which arises out of the Order dated 20.12.2024 passed by the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench, Court-I).By the impugned order, the Adjudicating Authority has disallowed the application filed by the Liquidator by directing the Liquidator to issue fresh Swiss Challenge Notice in the private sale of the assets of the Corporate Debtor with the bid of OASPL as the anchor bid and EMD fixed on standard norms. Aggrieved by the impugned order, two separate appeals have been preferred by Orissa Alloy Steel Pvt. Ltd. and SM Steels and Power Limited.
Conclusion- The expression used in Regulation 33(2)(d) of the LPR is “prior permission”. When the word “prior” has been prefixed to the word “permission”, it removes all ambiguity that this permission cannot mean post facto approval or be interchangeably used with ex-post facto approval. The use of the word “prior” prefixed to “permission” makes it clear that the word “prior” has to be given its full effect. The LPR being in the nature of subordinate legislation, they have an enforceable value and merits scrupulous compliance. The use of the word ‘prior’ in LPR has to be accorded due importance and cannot be obliterated or disregarded. That being so, it is implicit, that the Liquidator has to obtain the permission of the Adjudicating Authority on conduct of private sale before terms and conditions of the private sale are set up.
