NCLT Grants Consequential Reliefs To Successful Bidders
Reliefs are subject to no specific order or ratification of the sale since the Liquidator has already accepted the bid and
NCLT Grants Consequential Reliefs To Successful Bidders Reliefs are subject to no specific order or ratification of the sale since the Liquidator has already accepted the bid and the auction sale is completed The National Company Law Tribunal (NCLT) allowed an application by the successful bidders seeking consequential reliefs in the auction sale of the Corporate Debtor as a going...
NCLT Grants Consequential Reliefs To Successful Bidders
Reliefs are subject to no specific order or ratification of the sale since the Liquidator has already accepted the bid and the auction sale is completed
The National Company Law Tribunal (NCLT) allowed an application by the successful bidders seeking consequential reliefs in the auction sale of the Corporate Debtor as a going concern.
The Division Bench of the National Company Law Tribunal at Mumbai, comprising of Justice Janab Mohammed Ajmal and V. Nallasenapathy dealt with this application, which was filed by Janhavi Dixit and M/s Hi-Tech Services in the matter of M/s Elecon Engineering Company Ltd v M/s Enviiro Bulkk Handling Systems Pvt Ltd & Anr.
The factual scenario of the matter is that the Liquidator published an announcement of e-auction of the Corporate Debtor as a going concern on 3 Marc 2021 as per Regulation 12(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Liquidation Regulations), inviting bids for the Corporate Debtor. The Applicants were declared as the successful bidders/the sole eligible bidder in the e-auction as they submitted a bid amount of ₹15,30,00,000. The Applicants paid 20 per cent of the bid amount on 23 March 2021, aggregating the payment to 25 per cent of the bid amount, which is ₹3.825 crore.
The present application dealt with the consequential reliefs in the Applicant's offer for a smooth and successful sale of the Corporate Debtor as a going concern. It was submitted by the Applicants that the consequential reliefs should be considered and granted as they are in administrative nature and for the resumption and restructuring of the company after the auction sale as well as for the compliance of the statutory regulations subsequent to the auction sale. The Liquidator did not oppose the application by stating that the Applicants have since then paid the entire bid amount of ₹15.30 crore and accordingly, the e-auction process was successfully completed. It was further contended by the Applicants that unless the reliefs are granted, the Corporate Debtor cannot function as a going concern and the revival and working of the Company as a going concern would be adversely affected post its release from the liquidation.
The bench after going through the pleadings and submissions, allowed the application by granting the consequential reliefs subject that no specific order or ratification of the sale is required since the Liquidator has already accepted the bid for ₹15.30 crore and the auction sale of the Corporate Debtor as a going concern is completed on 18 March 2021. It concluded by stating that the action of the Liquidator was in accordance with the relevant provisions of the Code and consequences thereof would follow according to law and that the reiteration by the Tribunal is neither contemplated nor necessary.