Jindal Power Ltd. Vs Dushyant Dave Liquidator of Shirpur Power Pvt Ltd.
IA/561(AHM)2022 in CP (IB) No 487 of 2018
Facts:
1.State Bank of India had filed a petition under petition Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), seeking initiation of CIRP against corporate debtor which was admitted by the Hon’ble NCLT on 04.03.2020.
2.On 03.02.2021, the CoC passed a resolution recommending the order of liquidation of the corporate debtor. On 15.03.2021, the liquidation process of the corporate debtor was started.
3.Liquidator published the first notice dated 05.04.2021 for the sale of the corporate debtor as a going concern. The reserve price was fixed as Rs. 5,66,23,00,000/-. The liquidator did not get a response from any bidder, When no prospective buyers turned up to purchase the Corporate Debtor as a going concern, the Liquidator published a fresh notice dated 20.07.2021 declaring the slump sale of the corporate debtor. The reserve price for slump sale was fixed for Rs. 4,77,84,50,000/-.
4.Applicant accepted the bid of the corporate debtor as a slump sale for a sum of Rs. 3,14,38,49,770/- i.e., the minimum price fixed by the liquidator.
5.Applicant filed this application requesting this Adjudicating Authority to convert the slump sale of the corporate debtor into the sale as a going concern and direct the liquidator to issue the sale certificate accordingly.
Issue: Whether having accepted the corporate debtor in a slump sale, the bidder can request to treat that sale as a
sale of the corporate debtor as a going concern?
Arguments:
For Applicant:
1.Counsel submitted that the applicant is a successful bidder. He has now deposited the bid amount. His request is only to direct the liquidator to sell the corporate debtor as a going concern instead of confirming the sale as a slump sale.
2.He would further submit that it is the main object of the Insolvency and Bankruptcy Code, 2016 to promote entrepreneurship and preserve the existence of the corporate debtor. If the liquidator is directed to treat this sale as a going concern then all stakeholders would be benefited, and employment will be generated.
3.He contends that if the liquidator is directed to treat the slump sale as sale as a going concern, no one, even the stakeholders’ committee, will not be affected prejudicially.
For Respondents:
1.Counsel submitted that liquidator had published the notice of the sale of the corporate debtor as slump sale and in response thereto the applicant accepted the bid for a sum of Rs. 3,14,38,49,770/- which is the minimum price for a slump sale. The sale is concluded.
2. The liquidator has consulted the stakeholders’ committee and the stakeholders’ committee suggested that let the purchasers deposit the bid amount then the committee will take a call on the applicant’s request. According to learned counsel for the liquidator, the liquidator has no authority to convert the slump sale into the sale as a going concern and this application is not maintainable, hence, may be rejected.
3.Further Counsel for Stakeholder Committee submitted that initially when the liquidator published the sale notice of the corporate debtor as a going concern for the reserve price of Rs. 5,66,23,00,000/-, the applicant did not opt for the same. Now, having reduced the price, as there was no buyer, the applicant has conveniently accepted the bid for less amount under the slump sale but now requesting this Adjudicating Authority to treat the sale of the corporate debtor as a going concern.
Decision: NCLT Held that bidder having accepted the corporate debtor in slump sale, can’t request to treat that sale as a sale of the corporate debtor as a going concern.
Rationale:
1.NCLT noted that the material on record shows that the liquidator took all possible steps to sale the corporate debtor as a going concern but he did not get any response. The applicant herein also missed that opportunity, we do not know the reasons as to why the applicant did not accept the bid of the corporate debtor as a going concern at the first point of time.
2.The applicant had not put any condition when he accepted the bid to purchase the corporate debtor as a slump sale. The price of the corporate debtor in the sale as a going concern was fixed at Rs. 5,66,23,00,000/- as maximum and Rs. 4,33,16,59,500/- as a minimum whereas the price of slump sale of the corporate debtor was fixed at Rs. 4,77,84,50,000/- as maximum and Rs. 3,14,38,49,770/- as a minimum. The applicant accepted the corporate debtor in slump sale for a minimum price of Rs. 3,14,38,49,770/-. There is a vast difference between the sale price of the corporate debtor as a going concern and the sale price of the corporate debtor in a slump sale.
Order Copy:
