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Judgment
Per: Justice Rakesh Kumar Jain:
This appeal is directed against the order dated 31.10.2023, passed by the Adjudicating Authority (National Company Law Tribunal, Court No. IV, New Delhi) by which an application bearing I.A. 3049/2023 filed in Company Petition No. (IB) – 117/(PB)/2019 by Respondent No. 2 with a prayer to direct the liquidator (Respondent No. 1) to grant an opportunity of competitive bidding to it against the other entity whose bid has been accepted by the Liquidator towards the purchase of property in question and also to direct Respondent No. 1 to disclose the financial bid of the entity that has been accepted by the liquidator towards the purchase of property in question and further to direct Respondent No. 1 to supply a copy of the I.A. filed by the Liquidator seeking approval of this Tribunal towards the sale of property in question, has been disposed of with a direction to Respondent No. 1 and SCC to reconsider the matter between both the parties i.e. Appellant and Respondent to meet the objective of the Code and maximization of value.
Briefly put, Punjab National Bank filed an application under Section 7 of the Code bearing I.B-117/PB/2019 for initiation of Corporate Insolvency Resolution Process against the Corporate Debtor (M/s Beta Infratech Pvt. Ltd.). The said application was admitted by the Adjudicating Authority on 14.06.2019. S.V. Satyanarayana was appointed as Interim Resolution Processional.
Since, no prospective and viable resolution plan was received by the RP, therefore, the Adjudicating Authority, on the recommendation of the CoC, ordered liquidation of the Corporate Debtor on 24.07.2020 and appointed TSN Raja as the liquidator/Respondent No. 1. The property in question is 77MWx2 Gas Turbine GE Make Frame 6, 74 MW Steam Turbine GE Heat Recovery Generator – Thermax Make. Electricals ABB of the Corporate Debtor located at Uttrakhand. Respondent No. 1 made various efforts for the sale of the property in question. The same is being depicted by the following chart which is reproduced as under:-
The last failed auction dated 27.02.2023 of Rs. 202 Cr. was held on 15.03.2023. The property in question was then offered by way of private sale and on 23.04.2023 the Appellant submitted an offer of 202.01 Cr., higher than the reserve price of the last failed auction advertised on 27.02.2023. On 24.04.2023 Respondent No. 1 accepted the proposal of the Appellant and invited the Appellant to submit tender documents alongwith deposit of EMD. The Appellant deposited Rs. 20,20,89,958.00/- towards 10 per cent (EMD) in multiple tranches from 24.04.2023 to 06.05.2023. However, case of Respondent No. 2 is that it carried out physical inspection of the property in question on 02nd and 03rd May, 2023 and showed their interest to purchase the property in question through email dated 05.05.2023.
The SCC convened its 21st meeting on 09.05.2023 to consider the proposal of the Appellant but it was adjourned to 15.05.2023 due to paucity of time. It is alleged that Respondent No. 2 submitted its offer of Rs. 202 Crores on 10.05.2023 but Respondent No. 1 informed Respondent No. 2 that the sale of the property in question is being finalized with the Appellant, therefore, it should not make proposal without EMD. Respondent No. 2 through email dated 13.05.2023 asked for more time to make binding/concrete offer but Respondent No. 1 reiterated its earlier stand that it cannot be possible until and unless EMD of Rs. 20.20 Cr. is immediately sent. On 14.05.2023 Respondent No. 2 revised its non-binding offer to Rs. 212.1 Cr. and promised that it would deposit EMD on 15.05.2023 but it did not happen. On 15.05.2023 Respondent No. 1 informed Respondent No. 2 again stating that without EMD, there cannot be a binding proposal and thus no cognizance shall be taken of the same. On 15.05.2023 adjourned 21st SCC meeting was held approving the issuance of sale letter by Respondent No. 1 and on 16.05.2023 the Appellant completed all legal formalities by submitting the tender documents.
As a consequence thereof, Respondent No. 1 issued sale letter/confirmation to the appellant as private sale with other terms and conditions stipulated therein on ‘as is where is basis and as is what is basis and without recourse’ after consultation with the SCC in its 21st meeting on 09.05.2023 and adjourned meeting on 15.05.2023. The Appellant accepted the sale letter on 18.05.2023 through its email and formed a concluded contract between the parties.
On the other hand, Respondent No. 2 again made the offer of Rs. 212.1 Cr. but did not deposit the EMD alongwith it and had rather transferred a sum of Rs. 20.64 Cr. to the account of Respondent No. 1 on 22.05.2023. The offer of Respondent No. 2 was put inthe 22nd meeting of SCC held on 26.05.2023 and after deliberations it was not taken to be considered since the same was received well after the confirmation of sale in favour of the Appellant.
As a result thereof, Respondent No. 2 filed the application I.A. No. 3049 of 2023 under Section 60(5) of the Code for seeking various directions, mentioned hereinabove, for a competitive bidding between the Appellant and Respondent No. 2. The Adjudicating Authority passed the impugned order and in pursuance of the direction contained, Respondent No. 1 gave a notice dated 03.11.2023 for holding e-auction between the Appellant and Respondent No. 2. However, the said auction has been stayed by this Tribunal vide its order dated 08.11.2023 and after hearing the arguments,while reserving the judgment, directed that the interim order shall continue till pronouncement of the judgment.
Counsel for the Appellant has submitted that the Adjudicating Authority has committed a patent error in allowing the application of Respondent No. 2 without appreciating the fact that the property in question has been sold by Respondent No. 1, after the approval of SCC, by way of private sale by negotiation and since the Appellant has given offer higher than the reserve price way back on 23.04.2023 and the proposal was accepted by Respondent No. 1 pursuant to which the Appellant deposited the EMD between 24.04.2023 to 06.05.2023 of an amount of Rs. 20,20,89,958.00/- and there has never been a proposal by Respondent No. 2 with EMD, which was repeatedly asked for, by Respondent No. 1 though Respondent No. 2 kept on interacting with Respondent No. 1, to gain time, but it had never given a binding offer and when the SCC approved the issuance of sale certificate to the Appellant on 15.05.2023 and the Appellant completed all the formalities by submitting the tender documents as a consequence to which the sale letter was also issued on 17.05.2023 and accepted by the Appellant on 18.05.2023, Respondent No. 2 sent the offer of 212.1 Cr. on 19.05.2023 and on 22.05.2023 deposited the EMD of Rs. 20.64 Cr. in the account of Respondent No. 1 unauthorizedly much after the completion of the sale. It is thus submitted that the Adjudicating Authority has committed an error in reopening the concluded sale between the Appellant and Respondent No. 1 by the impugned order observing that Respondent No. 2 made the non-binding offer on 14.05.2023 whereas the sale letter was issued on 17.05.2023. It is submitted that on 14.05.2023, Respondent No. 1 made the non-binding offer and promised to deposit EMD on 15.05.2023 which was never deposited and in the meantime on 15.05.2023 21stSCC meeting took place approving the issuance of sale letter and on 16.05.2023 all the formalities were completed and the sale letter was issued on 17.05.2023 whereas the offer was made again by Respondent No. 2 on 19.05.2023.
On the other hand, the liquidator (Respondent No. 1) who has appeared in person has submitted that the private sale has been conducted on the basis of the terms of sale mentioned in the failed sale published on 27.02.2023. It is further submitted that the Appellant made the deposit of EMD on 06.05.2023 but since it failed to deposit the tender documents till 16.05.2023 the contract of sale was not completed without it and as soon as the tender documents were submitted on 16.05.2023, sale letter was issued on 17.05.2023. He also submitted that Respondent No. 2 had been repeatedly asked to deposit EMD but the same was never deposited, therefore, it was only an interest which was being shown by Respondent No. 2 without making a binding offer. It is also submitted that the offer was made by Respondent No. 2 after the sale certificate was issued to the Appellant on 19.05.2023 much after the issuance of sale letter on 17.05.2023 and the EMD was deposited on 22.05.2023 which was of no avail at that time.
On the other hand, Counsel for Respondent No. 2 has argued that for the purpose of private sale, Respondent No. 1 has to prepare a strategy to approach the interested buyers and the sale has to be completed with terms of sale. In this regard, she has referred to Schedule 1 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016which deals with the issue of private sale. It is further submitted that the offer made by Respondent No. 2 is more than the price on which the property in question has been sold because the Appellant has given the Price of Rs. 202.01 Cr. whereas Respondent No. 2 has given Rs. 212.1 Cr., therefore, the Adjudicating Authority has rightly allowed the application and directing Respondent No. 1 and the SCC to reconsider the matter between both the parties i.e. Appellant and Respondent No. 2 to meet the objective of the Code and maximization of the value.
In rebuttal, Counsel for the Appellant has submitted that the liquidator had planned the strategy by inviting the offer from the interested parties as the private sale was to be conducted through negotiation. Respondent No. 2 was repeatedly askedby Respondent No. 1 to make a binding offer by depositing EMD because according to their own letter dated 19.05.2023, Respondent No. 2 has mentioned that the terms and conditions for sale advertisement dated 27.02.2023 had to be followed and in the advertisement dated 27.02.2023 the sale was to be conducted ‘as is where is as is what is whatever there is basis’ and deposit of EMD was one of the Condition precedent. It is further submitted that the Appellant had filed an application before the Adjudicating Authority only for the waiver of the interest in terms of the sale letter. Respondent No. 1 has also reiterated its stand that it had made clear to both the parties that the terms of sale would be the same as published on 27.02.2023. He has also submitted that it had tried to sell the property in question through e-auction many times but when it ultimately failed, he offered the property for sale by private sale and was constantly in touch with the Appellant and Respondent No. 2 out of which the Appellant made the binding offer by depositing the EMD and the offer was accepted by the SCC and after submission of tender documents, the sale was completed and closed.
We have heard Counsel for the parties and perused the record with their able assistance.
There is no dispute that the property in question was tried to be sold by Respondent No. 1, firstly, through e-auction in which the reserve price was reduced as permitted in clause 4A and 4B of Schedule 1 pertaining to mode of sale and was ultimately reduced to Rs. 202 Cr. when it was offered on 27.02.2023. The Appellant submitted an offer on 23.04.2023 of Rs. 202.01 Cr., higher than the amount mentioned in the advertisement dated 27.02.2023, which was accepted by Respondent No. 1 asking them to submit tender documents alongwith deposit of EMD. According to Respondent No. 2 it conducted physical inspection of the property in question on 02.05.2023/03.05.2023 and Respondent No. 1 informed Respondent No. 2 that he has received part of EMD from another prospective investor (Appellant) who is likely to complete the process and advised Respondent No. 2 to take a quick call if they are really interested. The EMD was deposited by the Appellant in various tranches from 24.04.2023 to 06.05.2023 which has been recorded in the sale letter and is reproduced as under:-
Sl. No. | Date of Transfer | Details of Transfer | Date of Credit | Amount Credited (Rs) |
| 1. | 24.04.2023 | 222,222 -Euro | 27.04.2023 | 1.93,12,773 |
| 2. | 27.04.2023 | 1,010 - Euro | 01.05.2023 | 89,811 |
| 3. | 04.05.2023 | 666,100 - Euro | 08.05.2023 | 595,77,916 |
| 4. | 05.05.2023 | 750,000 - USD | 08.05.2023 | 610,76,110 |
| 5. | 06.05.2023 | 751,250 - USD | 09.05.2023 | 614,33,348 |
| Total | 20,20,89,958 | |||
The first email of Respondent No. 2 is dated 05.05.2023 by which it communicated its interest to Respondent No. 1 for purchasing the property in question. The said letter is reproduced as under:-
ANNEXURE-24”
From: Sameer Jain [email protected]
Date: Friday, 5 May 2023 at 11:28 PM
To: [email protected] [email protected] Cc:[email protected]<[email protected]>, SuvigyaAwasthy<[email protected]>,Saudamini Sharma [email protected] Subject: Asset Sale: M/s Beta Infratech Pvt Ltd Hello Pratiksha, This is in connection with our conversation yesterday. I write to you on behalf and under the instructions of Aksa Energy, established in 1997, which is Turkey's largestpublicly listed independent power producer. Aksa is a subsidiary of Kazanci Holding which is a global powerhouse,engaging in production activities on fourcontinents, operating in 21 countries. We are instructed to approach you to express our client's interest to purchase the plant and machinery of M/s BetaInfratech Pvt Ltd ('BIPL) which was put up for sale vide advertisement dated 27.02.2023 by Mr. T.S.N Raja,Liquidator of BIPL. As requested by you, all the details of our client can be accessed at: https://www.aksainvestorrelations.com/en/about-aksaenergy/company-profile/ Once you have perused the details of our client, please let me know a good time to speak with you and Mr. Raja tofurther set-up a meeting in this regard. I look forward to hearing from you Best Regards, Sameer Jain Managing Partner”
Respondent No. 2 again sent an Expression of Interest on 09.05.2023 in which it showedwillingness to purchase the property in question at the reserved price of Rs. 202 Cr., the said letter is also reproduced as under:-
EXPRESSION OF INTEREST
09.05.2023
To, Mr. T.S.N. Raja (SivanagarajaTaduvar), Liquidator of Beta Infratech Pvt. Ltd. (Under Liquidation) Registered Address: B-4/45, Safdarjung Enclave, New Delhi – 110029, India
Subject: Submission of Expression of Interest ('EoI') for purchase of Plant & Machinery of Beta Infratech Pvt. Ltd. (under liquidation)
Dear Sir,
We, Aksa Enerji Uretim A.S, Turkey ('Aksa'), are Turkey's largest publicly listed independent power producing company. Aksa is a subsidiary of Kazanci Holding which is a global powerhouse, engaging in production activities on four continents and operating in 21 countries.
This letter is in furtherance to the email dated 05 May 2023, sent on instructions by our Legal Counsel and our conference call with you on 08 May 2023, in connection with the purchase of the following assets of M/s Beta Infratech Pvt. Ltd. ('BIPL') for which we wish to submit our EoI:
S.No. Description of Asset 1. Plant and Machinery (75MWx2 Gas Frame 6GE make Turbines, 74MW GE Steam Turbine, Thermax make Boiler, ABB elec.(as mentioned in Auction notice dated 27.02.2023). We note that pursuant to the public notice dated 27.02.2023 whereby bids were invited by you for the sale of assets of BIPL there has been no successful applicant and consequently the auction has failed. Since, the information in connection with the auction of BIPL's assets was not available with us in Turkey, we could not participate in the said bidding process at the time.
We understand that the afore-stated asset forms a part of the liquidation estate of BIPL and accordingly, the undersigned, on behalf of Aksa hereby submits the present EoI demonstrating our strong willingness towards purchasing the Plant and Machinery as described hereinabove.
Respondent No. 1 sent an email dated 11.05.2023 to Respondent No. 2 intimating that sale is being finalised with another investor and without binding proposal, no correspondence is possible. The said letter is also reproduced as under:-
“Re: Asset Sale:M/s Beta Infratech Pvt Ltd tsnraja<[email protected]> Thu 5/11/2023 12:05 PM To: Sameer Jain <[email protected]> Cc: SuvigyaAwasthy<[email protected]>;Saudamini Sharma <[email protected]>;VivekJoshi <[email protected]>;SELIM DONMEZ ＜[email protected]>;OZGE EKEN <[email protected]> CAUTION: External Email. Mr Samir, It was clarified to you and to the AKSA representatives Mr Korkut, Mr Basar and their EPC contractor or agent Mr Michaellohrmann that the sale is being finalised with another investor and without a binding proposal no correspondence in this regard will beentertained. Regards raja tsn TSN RAJA M COM, FCMA & INSOLVENCY PROFESSIONAL”
On 13.05.2023 Respondent No. 2 sent an email to Respondent No. 1, through counsel, that Respondent No. 2 is in the process of making a binding/concrete offer. The said letter is reproduced as under:-
On 13.05.2023 itself Respondent No. 1 apprised Respondent No. 2 that he will not accept any more correspondence on the issue concerned as according to him Respondent No. 2 was trying to alibi for litigation because it has not sent a proper offer supported with EMD nor any binding agreement, he rather asked Respondent No. 2 that if interested then transfer immediately Rs. 20.20 Cr.. The said email is also reproduced as under:-
“Re: Asset Sale:M/s Beta Infratech Pvt Ltd tsnraja<[email protected]> Thu 5/13/2023 1:02 PM To: Sameer Jain <[email protected]> Cc: SuvigyaAwasthy<[email protected]>;Saudamini Sharma <[email protected]>;VivekJoshi <[email protected]>;SELIM DONMEZ ＜[email protected]>;OZGE EKEN [email protected];p[email protected] <[email protected]> CAUTION: External Email. Sir, No more correspondence will be entertained on this issue. You are trying to create a sort of alibi for litigation, I imagine. There is neither a proper offer supported by the EMD nor any binding agreement. We regret, we do not promise or hold anything based on some baseless proposal, despite the undersigned trying to explain the provisions of law, by inviting you all to a virtual meet. Thank you please do not drag the issue, if interested transfer immediately Rs. 20.20 cr. and furnish your proposal. Regards raja tsn TSN RAJA M COM, FCMA & INSOLVENCY PROFESSIONAL”
Vide letter dated 14.05.2023, Respondent No. 2 revised its offer to Rs. 212.1 Cr. and promised to deposit EMD on 15.05.2023. The said letter is reproduced as under:-
To,
Dated: 14.05.2023
The Liquidator M/s. Beta Infratech Private Limited (In Liquidation) B-4/45, Safdarjung Enclave, New Delhi-110029, India
Subject: Binding Offer for purchase of Assets of M/s Beta Infratech Pvt Ltd (In Liquidation)
Dear Sir,
Please Refer the following:
1.SALE ADVERTISEMENT published on 27.02.2023 in Business Standard (English - All India editions) & Amar Ujala (Hindi edition) FOR THE DISPOSAL OF ASSETS - a 225 MW (GE MAKE ZERO HOUR OPERATED) Gas Based Power Plant located at Nand Nagar, Mahuakhera Ganj, Kashipur, Uttarakhand, , owned by M/s. Beta Infratech Private Limited (In Liquidation) by THE LIQUIDATOR OF M/s. Beta Infratech Private Limited (In Liquidation);
2.Our representative's calls/ communications with you in March and April 2023;
3.Our representatives' travel from Istanbul and to Kashipur, Uttarakhand to inspect the Assets on 2-3 May, 2023;
4.Our Legal Counsel's email dated 5 May 2023;
5.Our representative's various subsequent interactions with you including conference calls on 8 & 9 May, 2023;
6.Our Legal Counsel's email dated 10 May 2023 containing a formal Expression of Interest ('EOI');
7.Your email dated 11 May 2023;
8.Our Zoom Call dated 11 May 2023 at 2 PM – IST, recorded by you
In furtherance thereof, wherein you directed us to submit to you a binding offer, We, the Prospective Buyer, do hereby state that, we have read the following documents available on the website of M/s Beta Infratech Pvt Ltd (www.betainfra.com) and understood them fully, as directed by you:
a. Handouts in relation to 225 MW Plant and Machinery Available for Sale;
b. List of Machinery available for sale;
c. Section 29A Undertaking;
d. Confidentiality Undertaking;
e. Terms & Conditions for Sale Advertisement dated 27.02.2023.
We request you to provide us with the Terms and Conditions applicable for the present private sale, since the same are not available on the website. The one available on the website are the Terms & Conditions for auction sale, which had failed. Our offer for purchase of the following assets, as appearing in the Handout and List on the website, as under:
Plant and Machinery: (75MW×2 Gas Frame 6GE make Turbines, 74MW GE Steam Turbine, Thermax make Boiler, ABB elec.(as mentioned in public notice dated 27.02.2023).
| 2 | Constitution (in | Company Names of Directors with Phone Numbers are as under: |
| 2 | Constitution (in | Company Names of Directors with Phone Numbers are as under: |
| case of company/firm, also give names of Directors/partners/phone numbers) | 1.Murat Çaptuğ Phone Number: +233 26 139 93 62 2.Selim Dönmez Phone Number: +90 533 468 17 68 |
| 3 | Details of EMD | ||
| (i) | Mode of Payment | RTGS/ SWIFT | |
| (ii) | SWIFT Transfer Number | To be shared | |
| (iii) | Date | To be shared | |
| (iv) | Bank & Branch Name | To be shared | |
| (v) | Amount Deposited | USD 2.5 million | |
Please note that while on the recorded conference call dated 11.05.2023 you asked us to make a competitive offer to you, you did not disclose to us the existing offer being considered by you in order for us to make a clear offer being higher of that amount. Nevertheless, we are, in anticipation, currently making an offer to purchase the assets mentioned above, for INR 2121 million being USD 25.8 million, which is subject to negotiation after the existing binding offer amount is disclosed by you. Thus, we request you to disclose the binding offer available with you, in order for us to revise the present offer, if required. We are depositing the EMD on the (15th) of May and share the swift details as soon as the bank transfer is made.
We further declare that We intend to purchase the above referred assets from the Liquidator for our own company (or subsidiaries) use/business and that the information revealed by us using this Offer Form is true and correct to the best of our knowledge and belief.
We certify that We are not disqualified under Sec.35 of IBC 2016, and we are eligible to make this offer under the provisions of IBC, 2016.
We also agree that after our offer given in this document or such other offer of higher amount, for purchase of a property is accepted by the LIQUIDATOR, we will pay the balance sale consideration within 16 (sixteen) weeks or any such time
It is pertinent to mention that in the aforesaid letter Respondent No. 2 itself has mentioned that the terms and conditions for this saleare of the sale advertisement dated 27.02.2023. Respondent No. 1 again wrote to Respondent No. 2 that without EMD it cannot take into consideration its offer and sent an email on 15.05.2023 in this regard. The said letter is reproduced as under:-
“From:tsnraja<[email protected]> Sent: Monday, May 15, 2023 6:51 AM To: OZGE EKEN <[email protected]> Cc:SELIM DONMEZ <[email protected]>; KORKUT OZTURKMEN ＜[email protected]>; CEVDET YALCIN <[email protected]>; MURAT CAPTUG ＜[email protected]>; CUNEYT UYGUN <[email protected]> Subject:Re: Asset Sale:M/s Beta Infratech Pvt Ltd Ma'am, At the outset once again it is reiterated that this letter will not giveany commitment nor any right or preference to the Plant and Machinery put for sale. As detailed the sale is under finalisation without any bindingproposal supported by EMD, we will not take cognizance of yourmail. Please refer to trailing mail where it was categorically informed we will not entertain any mail unless there is a binding proposal. We are not in receipt of any transfer of EMD hence there is nobinding proposal from your end. Please find attached draft sale letter which will be in the formatattached subject to mutual agreement on certain points. Also for information sake the undersigned invites your attention tothe following issues of your trailing mail: 1.ref to page 3 item 1 line 6
2.which is subject to negotiation after the existing binding offer amount is disclosedbyyou.Thus,we request you to disclose the binding offeravailable withyou, inorder for us to revise the present offer, ifrequired 3.thus you are making your offer conditional. you are atliberty to add that 'since the present offer is notrevealed, you reserve the right to enhance to be in thecompetition' 4.Please note a conditional offer is not acceptable. 5.Further AS PER IBC 2016, only 90 days period ispermitted hence we cannot consider your request for16 weeks which goes beyond the stipulated 90 days. 6.When you send the final proposal please send it onletterhead. 7.Also share other documents and affidavits which arethere on the website Please note this reply itself is unwarranted since there is no binding offer To keep the spirit of IBC 2016, we are entertaining.
Regards raja tsn PS:Please restrict the number of recipients, you may internally circulate toeveryone concerned TSN RAJA M COM, FCMA & INSOLVENCY PROFESSIONAL”
Thereafter on 15.05.2023 21st SCC meeting took place and approved the issuance of sale letter to the Appellant who has completed the formalities on 16.05.2023 and ultimately on 17.05.2023 the sale letter was issued which is also reproduced as under:-
OFFICE OF THE LIQUIDATOR BETA INFRATECH P LTD (In liquidation)
Ref: Beta/05-2023/
17th May 2023
To
Mr. Praveen Pai, COO, Solen Renewable Energy DMCC
Corporate Office:
1202-1204
Emirates Financial Tower, DIFC Dubai, UAE
Reg Office:
Unit no 257, DMCC Business Centre, Level No. 1, Jewellery & Gemplex 3 Dubai, UAE
Dear Sirs,
Sub: M/s Beta Infratech (P) Ltd (in Liquidation) – Sale of Plant and Machinery – on “As is Where is Basis and as is what is basis and without recourse” -under IBC 2016- Acceptance of BID – Reg.
Ref: 1. Our advt dt 27.02.2023
Your Offer (mail) dt 23.04.2023
Your Tender dt 16.05.2023
With reference to the above, we are pleased to inform that the Office of Liquidator Beta Infratech P Ltd, India, has approved your offer to purchase the Plant and Machinery of M/s Beta Infratech (P) Ltd, comprising the GE 225MW power plant located at Nand Nagar, MahuakheraGanj, Kashipur, Uttarakhand (the “Equipment”), India for a sum of Rs. 202,01,00,000 (Rupees Two hundred two crore and one lakh only) on “As is Where is Basis and as is what is basis and without recourse” as a “Private Sale” as permitted under the provisions of IBC 2016, with the consent of the Stakeholders Consultation Committee in its 21st meeting held on 9th May 2023 and this letter is issued as a token of acceptance of your bid.
You paid an amount of Rs 20,20,89,958 (Rupees Twenty crore twenty lakhs Eighty- Nine Thousand Nine Hundred and Fifty-Eight Only being 10% of the Sale consideration as EMD) (Credit confirmed by PNB), from Solen Renewable Energy
B4, 45, Safdarjung Enclave, New Delhi, Delhi 110029
Plot no 16, SHOP-CUM-FLAT, HUDA COMPLEX, KOTHAPET, HYDERABAD-500035 +914024140607: [email protected]
OFFICE OF THE LIQUIDATOR BETA INFRATECH P LTD (In liquidation)
DMCC, Details of remittances being:
| Sl. no | Date of transfer | Details of transfer | Date of credit | Amount Credited (Rs) |
|---|---|---|---|---|
| 1 | 24.04.2023 | 222,222 -Euro | 27.04.2023 | 1,99,12,773 |
| 2 | 27.04.2023 | 1,010 - Euro | 01.05.2023 | 89,811 |
| 3 | 04.05.2023 | 666,100 - Euro | 08.05.2023 | 595,77,916 |
| 4 | 05.05.2023 | 750,000 - USD | 08.05.2023 | 610,76,110 |
| 5 | 06.05.2023 | 751,250 - USD | 09.05.2023 | 614,33,348 |
| Total | 20,20,89,958 |
You are advised to pay the balance sale consideration amounting to Rs1,81,80,10,042/- within 15 days from the date of confirmation of sale under IBC 2016 i.e. this letter, subject to the following terms and conditions:
You shall pay the entire sale consideration of Rs.202,01,00,000/- (Rupees Two hundred two crore and one lakh only) including Rs. 20,20,89,958/- (Rupees Twenty crore twenty lakhs Eighty-Nine Thousand Nine Hundred and Fifty-Eight Only) already paid by you, within 15 days from the date of this letter and take possession
The Payment shall be made by Demand Draft/Pay Order/RTGS favouring M/s.Beta Infratech p Ltd (In Liquidation) payable:
BANK NAME : PUNJAB NATIONAL BANK ACCOUNT NO : 4437002100001350 ACCOUNT TYPE : CURRENT ACCOUNT IFS CODE : PUNB0443700 Swift Code : PUNBINBBHBS
If there is any delay in paying the balance sale consideration, as stipulated within 15 days from the date of this letter, interest at 12% p a, will be levied on the delayed amount for the delayed period after 30 days from the date of this letter, however not beyond 90 days from the date of this letter.
(At your request, the SCC authorised the undersigned to escalate the interest waiver request to the Hon'ble Adjudicating Authority by filing an application)
B4, 45, Safdarjung Enclave, New Delhi, Delhi 110029
OFFICE OF THE LIQUIDATOR BETA INFRATECH P LTD (In liquidation)
Unless otherwise, expressly permitted by the Hon'ble Adjudicating Authority, you shall pay interest as stipulated supra at 12% p.a).
In case the payments are not received within the stipulated period i.e., 90 days from the date of this letter, the amounts deposited by you till the stipulated period, shall be forfeited without further reference to you.
The Plant and Machinery is sold on "as is where is" and "as is what is basis and without recourse basis" hence no further clarifications/requests of any kind will be entertained about sale price, quality of assets sold etc.
On payment of the sale consideration in full, the Plant and Machinery of the CD will be handed over to you by the Office of the Liquidator, M/s. Beta Infratech P Ltd (In Liquidation).
Raising of Export shipping bills, preparation packing lists etc., shall be the responsibility of you, as we are handing over the plant and machinery in as is where is basis and dismantling and removal from the site is your responsibility. However, the office of the liquidator will authorise any designated person to prepare and sign the necessary documents.
From the date of handing over of Plant and Machinery:
a. It shall be your Risk and responsibility to protect, maintain and safeguard the machinery handed over to you, and you shall take care at your own cost.
b. You shall at your cost get the necessary Insurance Coverages done.
c. You shall indemnify the CD from any loss, claim or damage caused in the process of dismantling, removing, and shifting of the machines caused to your appointed employees or workers or any third party appointed workers employees etc.
d. Though the Plant and Machinery is handed over to you, you are being granted ingress and egress rights only, to enter, to dismantle and shift the machinery.
You Shall remove the Plant and Machinery, sold to you, without causing any damage to the Land and Buildings, within a period of eight months from the date of handing over.
B4, 45, Safdarjung Enclave, New Delhi, Delhi 110029
OFFICE OF THE LIQUIDATOR BETA INFRATECH P LTD (In liquidation)
Please note if you fail to remove the Plant and machinery beyond 8 months from the date of handing over, you shall be levied an amount of Rs 25 lakhs per month towards carrying cost & opportunity cost.
If you fail to remove the machinery within one year from the date of this letter, the liquidator reserves the right to resume the plant and machinery in whatever state and whatever stage it is and dispose the same as per the provisions of IBC 2016.
This sale attracts GST @ 18% as per GST norms, if the destination for the sale is within the territory of India. Since you are targeting to relocate the plant to Benin, it may not attract GST, provided proper approvals are obtained from the concerned. However, you shall shoulder if there is any tax liability on this sale, apart from the agreed sale consideration.
You shall at your own cost and expenses get executed and / or Register such Instruments / Legal Documents or do or cause to be done such acts and deeds as may be required for transfer of the assets in your favour.
The Office of the Liquidator shall not be liable to pay any dues either statutory or otherwise pending against the company.
In case of any contravention or breach of the terms of the sale, the Liquidator of the Corporate Debtor shall be entitled to exercise such other actions as it may deem fit under applicable law as well as under the terms of the sale.
As per the provisions of IBC 2016, only those who are not barred under sec 29A are eligible to bid for the assets. Normally, we get the due diligence done from independent practitioners viz., CA or CS, who search the information available on public domain like RBI websites, CIBIL databases, wilful defaulters list MCA records for strike off companies etc. Since you are based out of the country, you shall at your own cost furnish a report from Independent qualified professionals certifying that neither your directors nor directors of any of associated companies are ineligible as per the applicable norms in the countries you are operating, before the machinery is handed over to you.
B4, 45, Safdarjung Enclave, New Delhi, Delhi, 110029
Plot no.16, SHOP-CUM-PEAK HUDA COMPLEX, KOTHAPE HYDERABAD-500035 +014024140007: [email protected]
The sale letter was accepted by the Appellant vide email dated 18.05.2023. Thereafter, Respondent No. 2 sent a letter dated 19.05.2023in which he made the offer with EMD which was to be deposited on 22.05.2023. The said letter is also reproduced as under:-
ANNEXURE-31
To,
Dated: 19.05.2023
The Liquidator
M/s. Beta Infratech Private Limited (In Liquidation)
B-4/45, Safdarjung Enclave,
New Delhi-110029, India
Subject: Binding Offer for purchase of Assets of M/s Beta Infratech Pvt Ltd (In Liquidation)
Dear Sir,
Please Refer the following:
1.SALE ADVERTISEMENT published on 27.02.2023 in Business Standard (English - All India editions) & Amar Ujala (Hindi edition) FOR THE DISPOSAL OF ASSETS - a 225 MW (GE MAKE ZERO HOUR OPERATED) Gas Based Power Plant located at Nand Nagar, Mahuakhera Ganj, Kashipur, Uttarakhand, , owned by M/s. Beta Infratech Private Limited (In Liquidation) by THE LIQUIDATOR OF M/s. Beta Infratech Private Limited (In Liquidation);
2.Our representative's calls/ communications with you in March and April 2023;
3.Our representatives' travel from Istanbul and to Kashipur, Uttarakhand to inspect the Assets on 2-3 May, 2023;
4.Our Legal Counsel's email dated 5 May 2023;
5.Our representative's various subsequent interactions with you including conference calls on 8 & 9 May, 2023;
6.Our Legal Counsel's email dated 10 May 2023 containing a formal Expression of Interest ('EOI');
7.Your email dated 11 May 2023;
8.Our Zoom Call dated 11 May 2023 at 2 PM – IST, recorded by you
9.Your email dated 15 May 2023;
In furtherance thereof, wherein you directed us to submit to you a binding offer, We, the Prospective Buyer, do hereby state that, we have read the following documents available on the website of M/s Beta Infratech Pvt Ltd (www.betainfra.com) and understood them fully, as directed by you:
a. Handouts in relation to 225 MW Plant and Machinery Available for Sale;
b. List of Machinery available for sale;
c. Section 29A Undertaking;
d. Confidentiality Undertaking;
e. Terms & Conditions for Sale Advertisement dated 27.02.2023.
Our offer for purchase of the following assets, as appearing in the Handout and List on the website, as under:
Plant and Machinery: (75MWx2 Gas Frame 6GE make Turbines, 74MW GE Steam Turbine, Thermax make Boiler, ABB elec.(as mentioned in public notice dated 27.02.2023).
1 (a) Full Name of the Tenderer with TelephoneNos./Mobile Nos. Aksa EnerjiUretim A.S Phone Number: +90 216 681 00 00 (b) Address of the prospective buyer along with address proof Registered office at RüzgarlıbahçeMahallesi, ÖzalpÇıkmazı No:10 34805 KavacıkBeykoz, İstanbul / Türkiye (i) Office Same as above (ii) Residence NA (iii) Passport U22551466 issued in Republic of Turkey belonging to Mr. Korkut ÖZTÜRKMEN, Executive Board Member of Prospective Buyer (iv) Voter ID NA (v) Driver License NA
2 Constitution (in case of company/firm, also give names of Directors/ partners/phone numbers) Company Names of Directors with Phone Numbers are as under: 1.Murat Çaptuğ
Phone Number: +233 26 139 93 62 2.Selim Dönmez Phone Number: +90 533 468 17 68
3 Details of EMD (i) Mode of Payment RTGS/ SWIFT (ii) SWIFT Transfer Number PUNBINBBHBS (iii) Date 22.05.2023 (iv) Bank & Branch Name PUNJAB NATIONAL BANK ACCOUNT NO: 4437002100001350 ACCOUNT TYPE: CURRENT ACCOUNT IFS CODE: PUNB0443700 (v) Amount Deposited INR Rs. 20,50,00,000 being USD 2.5 million in following account: 1.Please note that while on the recorded conference call dated 11.05.2023 you asked us to make a competitive offer to you, you did not disclose to us the existing offer being considered by you in order for us to make a clear offer being higher of that amount. Nevertheless, we are, in anticipation, currently making an offer to purchase the assets mentioned above, for Rs 2,12,10,00,000 (or Rs 2121 million). Thus, we request you to disclose the binding offer available with you, in order for us to revise the present offer to a higher amount, if required.
2.We further declare that we intend to purchase the above referred assets from the Liquidator for our own company (or subsidiaries) use/business and that the
Vide email dated 22.05.2023, Respondent No. 1 informed Respondent No. 2 that the sale has been completed with the Appellant. The said letter is reproduced as under:-
“Re: Beta BO
tsnraja<[email protected]>
Mon 22/05/2023 13:58
Tc:OZGE EKEN <[email protected]>
Cc:KORKUT CZTURKMEN <[email protected]>
Ms OzgeEken
Ma'am,
it was clarified to you on more than a couple of occasions earlier(ref our mail senton 11th May 2023, 13th May 2023 and 15th may 2023) where in we detailed that:
1.We will not take cognizance of your proposal unless supported by stipulatedEMD.
2.we are in receipt of a binding proposal from yet another investor
3.You being a third party we will not reveal the details of the offer or investor
4.we already issued letters to them
We regret to inform you that we will not entertain your proposals in this situation.
Regards
TSN RAJAM COM, FCMA & INSOLVENCY PROFESSIONAL”
From the aforesaid documentary evidence on record, it is well established that Respondent No. 2 was aware of the terms and conditions of the sale which were the same mentioned in the last auction dated 27.02.2023 and Respondent No. 1 made the strategy to sell the property in question by way of private sale by resorting to the terms and conditions of sale much less insisting upon the party interested in bidding to deposit EMD to show its bonafide and executed the sale after the approval of the SCC and also put up the case of Respondent No. 2, offering some more amount to which the SCC in its wisdom declined and directed Respondent No. 1 to go ahead with the sale to the Appellant. Respondent No. 2 was only showing its interest in the purchase of the property in question but did not make an offer much less binding which would have been possible only with deposit of EMD of Rs. 20 Cr which had in fact been paid/deposited by the Appellant way back on 24.04.2023 to 06.05.2023 whereas the first email on record on behalf of Respondent No. 2 is dated 05.05.2023 in which it communicated its interest through counsel and did not even make any offer. It kept on involving Respondent No. 1 in showing the interest but though repeatedly asked by Respondent No. 1 that merely showing the interest in the purchase of the property would not be of any consequence unless Respondent No. 2 makes a binding offer by depositing the EMD, the same was never done by Respondent No. 2 till the sale in question was completed in favour of the Appellant by issuance of sale letter dated 17.05.2023 and was accepted the same by the Appellant on 18.05.2023 because the letter for giving proposal with EMD was written by Respondent No. 2 on 19.05.2023.
Thus, in view of the aforesaid facts and circumstances, Respondent No. 2 appears to have been sitting on the fence as to whether it may purchase the property or not but as soon as the property was sold and the sale was completed by 18.05.2023 in favour of the Appellant it became uneasy and came into the action with letter dated 19.05.2023 and initiated the present litigation.
The Adjudicating Authority has completely overlooked all these facts in the impugned order and seems to have been swayed with the amount which has been offered by Respondent No. 2 i.e. Rs. 212.1 Cr as against 202.1 Cr. but offer of the higher price after the conclusion of the sale is of no consequence because it would then be an unending process and would not finalise the sale even by private negotiation.
With these observations, we find that the present appeal is meritorious, therefore, the appeal is allowed and the impugned order is set aside. No costs.