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Judgment
O R D E R
In the instant Appeal, the Appellant seeks to challenge the order dated 05.08.2024 of NCLT, Chennai Bench in IA/IBC/1660/CHE/2024 in CP(IB)/988(CHE)/2018 rejected the application of the Appellant herein praying to direct the respondent to consider his proposal dated 25.07.2024 to purchase the Corporate Debtor as a going concern.
The Appellant states that through his business connection he came to know of e-auction Notice dated 28.05.2024 issued by the Liquidator/2nd Respondent, wherein the liquidator had invited bids for purchase of the Corporate Debtor as a going concern for a reserve price of Rs.10 Crore. He states that he contacted the liquidator on 22.07.2024 who informed him that e-auction has been conducted on 14.06.2024, that land alone has been sold and the sale is yet to be confirmed by Hon’ble NCLT, Chennai Bench. Based on this information, he gave his proposal vide letter dated 25.07.2024 to take over the Corporate Debtor as a going concern for Rs.10,01,00,000/- and deposited Rs.1,00,10,000/- in liquidator’s account towards 10% EMD. However, the liquidator did not consider his proposal.
He further states that deposited the EMD only at the instance of the liquidator, he filed the IA No.1660/2024 in CP 988/2018 before NCLT, Chennai Bench for directions to consider his proposal. However, on 05.08.2024, when the matter came up for hearing, the respondents submitted before NCLT that his proposal was considered by Stakeholders’ Consultations Committee (SCC), that all assets have been sold on piecemeal basis on the auctions held on 14.06.2024 and 02.08.2024 and the aggregate value of such sale proceeds is higher than the offer of the Appellant and hence it was rejected. Based on such submission, NCLT, Chennai Bench dismissed the application, with the observation that considering the above facts and in view of the decisions taken by the Respondents, nothing survives in this application.
The Appellant contends that the SCC meeting was conducted without any notice to him, thus denying him the opportunity to raise the value of his offer, that the Corporate Debtor was sold on a piecemeal basis rather than as a going concern against the direction of the NCLT, Chennai Bench as a going concern and therefore when he has offered to purchase the Corporate Debtor as NCLT ought to have allowed the application.
It is seen that the application, as preferred by the appellant being IA(IBC)/1660/CHE/2024 in CP (IB)/988(CHE)/2018, dated 31st July 2024, before NCLT, Chennai was rejected on the ground that, in view of the decision of SCC, when it had deliberated upon the offer of the Appellant on 2nd August 2024, no cause of action survives for considering the Application IA(IBC)/1660/CHE/2024 in CP (IB)/988(CHE)/2018.
Besides this, the bona fides of the appellant is also not very clear. According to his own case, he had the knowledge of the e-auction notice, much prior to filing of his expression of interest on 24th July 2024 and his letter to liquidator dated 25.07.2024. There is no explanation as to why he could not participate in the e-auction. Further, the Stakeholder’s Consultation Committee has already taken a call and decision has already been taken on 2nd August 2024, on his offer contained in his letter and expression of interest. That is not subject of challenge here. As regards his other contention that the Corporate Debtor should have been sold as a going concern, he does not dispute the fact that vide the auction notice the Corporate Debtor was offered for sale as a going concern. However, the liquidator and the respondents have taken a decision based on the bids received and he has not challenged that.
The Learned Adjudicating Authority by the Impugned Order, while deliberating upon IA(IBC)/1660/CHE/2024 in CP(IB)/988(CHE)/2018, agitating to has held that, the said application is not tenable owing to the fact that, the auction has attained its finality, with its confirmation. However, at the same time liberty has been granted to the appellant to resort to any appropriate remedies as available to him, as against the decision of confirmation of the Auction, as already which stood conducted on 14th June 2024.
Owing to what has been observed in the impugned order and the facts as narrated in the Company Appeal and also as admittedly expressed by the Counsel for the Appellant, we are of the view that, as of now the relief prayed for by the Appellant in the instant Appeal that is to set aside the order of NCLT, Chennai Bench on IA No.1660/2024 cannot be accepted, because he has not challenged, the auction proceeding itself before any Competent Forum, the liberty of which has already been reserved by the Impugned Order under challenge.
As it has already been held that, there survives no cause of action and as the liberty for resorting to an appropriate remedy has been granted to the Appellant, we decline to interfere in the Appeal in question. As far reserving the rights to the Appellant is concerned, as it has already been reserved by the Impugned Order under challenge and if the Appellant resorts to the same, the same may be adjudicated, in accordance with Law.