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Judgment
(Hybrid Mode)
Per: Justice Sharad Kumar Sharma, Member (Judicial):
These two Company Appeals have been preferred by the Appellant, invoking the provisions contained under Section 61 of I&B Code, being aggrieved as against the impugned order of 13.06.2024 that was passed by the Learned National Company Law Tribunal, Hyderabad Bench. Company Appeal (AT) (CH) (Ins) No. 243/2024 challenges the common order dated 13.06.2024 passed in IA No. 294/2020, 365/2021, 1094/2019 & 726/2022, as it stood preferred in CP (IB) No. 206/10/HDB/2019, in which the prayer of the Appellant to direct the Committee of Creditors (CoC) to consider the resolution plan submitted by him was rejected. The other Company Appeal i.e, Company Appeal (AT) (CH) (Ins) No. 255/2024 seeks to challenge the order passed in IA No. 245/2021 as preferred in CP(IB) No. 206/10/HDB/2019, by virtue of which the liquidation of the Corporate Debtor (CD) has been ordered.
The Appellant who happens to be the Suspended Director of the Corporate Debtor, has challenged the order of liquidation passed by the NCLT, alleging that it was rendered without the Appellant being made as a party to the proceedings and without considering the merits of the submissions made by him before Ld. NCLT. He has submitted before this Appellate Tribunal that the Corporate Debtor, who was admitted into Corporate Insolvency Resolution Process (CIRP) under Section 10 of I&B Code and thereafter, the Appellant who had submitted the Resolution Plan, which came to be approved by the CoC in its 9th CoC meeting. But however, the Resolution Professional (RP) who was thus appointed, pointed out certain procedural lapses and raised objections, which he took steps to comply with. However, the same could not be completed owing to the Covid-19 situation, as a result of which the CoC refused to adhere to its earlier acceptance of the terms and conditions of the Resolution Plan. As a result of the same, the aforesaid Interlocutory Applications being IA No. 294/2020, 365/2021, & 726/2022 were preferred by him and they were rejected by the common impugned order. which is under challenge in Company Appeal (AT) (CH) (Ins) No. 243/2024.
He has further submitted that the RP also filed an application IA no.245/2021 praying for the order of liquidation of the CD, M/s Shivaani Alloy Steel Casting Limited which was allowed by the Ld. NCLT by an order dated 13.06.2024. He has alleged that the said order of liquidation was passed despite several irregularities committed during the CIRP process, which were not considered by Ld. NCLT, because of which he has also filed an appeal against the said order.
These Company Appeals were taken up before this Appellate Tribunal on 15.07.2024 and we had issued notices to the Respondents. The facts and law involved in both the Company Appeals are almost akin.
But when the Appeal was taken up today, the Ld. Counsel for the Respondent has placed before this Tribunal an order that was passed by the NCLT on 03.12.2025 as passed in IA (IBC) No. 1587/2025 in CP(IB) No. 206/10/HDB/2019. He has submitted that Ld. Tribunal while considering the implications of Section 35(1)(n) to be read with Section 60 (5) (c) of I&B Code, to be read along with Regulation 45 (3) (a) of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, after recording the fact that the Corporate Debtor i.e., M/s. Shivani Alloy Steel Castings Ltd. Since has now been sold as a going concern, ordered closure of liquidation proceeding against Corporate Debtor. He has further submitted that the Liquidator has also been relieved of his duties as a result of the said order, which has been passed by the Learned Tribunal on 03.12.2025. Since the liquidation process.has been closed and the liquidator has been relieved, the the impugned order, directing commencement of liquidation, which is the subject matter of challenge in the instant Company Appeals has lost its significance, because of the fact that the Corporate Debtor has already been "sold as a going concern" in accordance with the provisions contained under the Regulations of 2016. The order as passed by the Learned Tribunal on 03.12.2025, which reads as under:
We heard the Counsel for the Liquidator and have gone through the entire records; we find it appropriate to grant only the following reliefs:
On perusal of the Final Report, it is evident that the Liquidator has sold the Corporate Debtor as a going concern, as such, it is a fit case for closure of Liquidation process.
As a sequel to the above, we hereby order closure of the Liquidation proceedings against the Corporate Debtor namely M/s. SHIVANI ALLOY STEEL CASTINGS LIMITED from the date of this Order, in terms of Regulation 45 (3) of Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016. Consequently, the Liquidator stands relieved.
The entire sale consideration paid by the Successful Bidder of the Company as a going concern along with total assets be permitted to be infused into the Corporate Debtor in the form of equity/capital/unsecured loans in the ration decided by the Successful Bidder/Purchaser.
The board of directors of the Corporate Debtor should be reconstituted as per Companies Act, 2013 by inducting individuals recommended by the Successful Bidder/Purchaser as Directors of the Corporate Debtor and direct the Registrar of Companies to do all such acts deeds and things that are necessary to appoint the individuals recommended by the Successful Bidder/Purchaser, in order to enable the Company to file relevant returns required by applicable law.
The existing shares of the Corporate Debtor (CD) shall be extinguished without any consideration, and all rights and liabilities associated with the shares shall be extinguished. Permission is granted for the reconstitution of the Board of Directors of the Corporate Debtor by the Successful Bidder. The Registrar of Companies (ROC), Hyderabad, is directed to update the status of the Corporate Debtor from 'under liquidation' to 'active' in their records.
Any proceedings pending against the CD (other than against the erstwhile promoters or former members of the management of the CD) as on the date of 'Certificate of Sale' with respect to its liabilities/inquiries/investigations/assessment/claims/disputes/ litigations etc. shall not have any bearing against the assets sold in the process. The said assets are free from any financial implications arising out of any pending proceedings before relevant authorities, if any.
The Applicant shall have the right to review or continue or terminate any contract that was entered into prior to the date of 'Certificate of Sale', without any liability and obligation on the part of the CD/Successful Bidder and the CD shall be deemed to have been discharged and extinguished in full.
Since it is sale as a going concern in Liquidation, the Applicant is not to be saddled with the liabilities existing prior to the date of 'Certificate of Sale', other than those identified or part of the group of assets and liabilities which according to its commercial consideration, have been sold as part of the going concern, w.r.t Regulation 32A(2) of IBBI (Liquidation) Regulations read with Regulation 39(c) (2) of IBBI(CIRP) Regulations.
With regard to any other concessions and reliefs sought by the Applicant under any other law, which are not specifically granted herein, the Applicant may approach the authority concerned who would consider such request under the applicable law keeping in view of Section 32A of IBC, 2016.
The Liquidator is directed to send the copy of this Order within 7 days from the date of pronouncement to the Registrar of Companies, Hyderabad and the concerned authorities and hand over all the books and files of the Corporate Debtor M/s. SHIVANI ALLOY STEEL CASTINGS LIMITED to the Successful Bidder M/s. Metsmith Innovation Private Limited, which are in possession of the Liquidator.
The Registry is directed to communicate this order to the Registrar of Companies, Hyderabad and concerned authorities for updating the master data.
A copy of this order be also forwarded to the Insolvency & Bankruptcy Board of India, New Delhi.
Certified Copy of this order may be issued, if applied for, upon compliance of all requisite formalities.
In terms of the above, I.A. No 1587 of 2025 in CP (IB) No.206/10/HDB/2019 is allowed and stands disposed of accordingly.
Thus, owing to the order passed by the Learned Tribunal on 03.12.2025, the instant Company Appeals for all practical purposes have been rendered infructuous. Accordingly the said Appeals are hereby dismissed as having been rendered infructuous, without prejudice to the rights available to the parties to the Appeal, if any, to be agitated before an appropriate forum in accordance with law.