AA Rightly Orders Liquidation as Corporate Debtor Having One Valuable Asset Couldn’t Be Sold as a Going Concern | NCLAT
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- Last Updated on 4 July, 2024
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Case Details: Amit Ahirrao v. Anagha Anasingharaju - [2024] 164 taxmann.com 63 (NCLAT-New Delhi)
Judiciary and Counsel Details
- Ashok Bhushan, Chairperson & Barun Mitra, Technical Member
- Rahul Totala & Rajat Malu, Advs. for the Appellant.
- Avinash R. Khanolkar, Sandeep Bajaj, Rautam Singh, Manvendra Kumar, Swetab Kumar, Ayush Tyagi & Ms Priyanka Vora, Advs. for the Respondent.
Facts of the Case
In the instant case, the Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor based on an application filed by respondent no.2 (i.e. financial creditor).
Thereafter, the Committee of Creditors (CoC) issued Form G through Resolution Professional (RP); however, no resolution plan was submitted, and the CoC unanimously resolved to liquidate the corporate debtor, leading to RP filing for liquidation, which the NCLT had approved.
The appellant challenged the NCLT’s order, arguing that they attempted to settle with financial creditors. However, the creditors were only interested in liquidation. Further, the appellant alleged that the liquidator should take steps to sell the asset as a going concern.
It was noted that the last date for submitting the resolution plan was 26.02.2022, which was extended until 09.03.2022. However, RP did not receive any plan until the meeting. Thus, the CoC did not commit an error in taking the decision of liquidation when RP received no resolution plan in spite of extending the the date.
NCLAT Held
The NCLAT held that the claim of the appellant that the sale should be conducted as a going concern could not be accepted, as CoC, in its meeting, had categorically noted that the corporate debtor was not a going concern. Further, Immovable property, which had been valued by valuers, was the only asset of the corporate debtor.
Therefore, the liquidator was to proceed to sell the corporate debtor’s assets and fix the reserve price based on the average of two valuation reports received during the CIRP process. Accordingly, the impugned order passed by the NCLT was to be upheld.
List of Cases Reviewed
- CS Anagha Anasingaraju v. Virtue Infra and Entertainment (P.) Ltd. [2024] 164 taxmann.com 62 (NCLT -Mum.) (para 19) affirmed See Annex
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