Union Bank Of India vs Spark Green Energy (Satara) Limited

Per: - Anil Raj Chellan, Member (Technical)

By way of this common order, we propose to dispose of the following two interim applications which arise from the same set of facts and the reliefs claimed by the Applicants are also the same.

The Liquidator of the Corporate Debtor and the Successful Bidder of the e-auction (hereinafter collectively referred to as "Applicants") seek the common reliefs in IA No. 1626 of 2024 and IA No. 3067 of 2024 as under:

The Applicants state that upon an application filed by Union Bank of India under Section 7 of the Code, the Corporate Insolvency Resolution Process ('CIRP') of the Corporate Debtor was initiated vide order of this Tribunal dated 28.11.2019. Subsequently, on the recommendations of the Committee of Creditors ('CoC') in its 20th meeting held on 14.09.2021 and on the application bearing IA No. 2571 of 2021 filed, this Tribunal vide its order dated 28.07.2023 ordered liquidation of the Corporate Debtor and appointed the Applicant in IA No. 1626 of 2024 as the Liquidator of the Corporate Debtor (hereinafter 'Liquidator').

The Liquidator has taken various actions as contemplated under the IBBI (Liquidation Process) Regulations, 2016 ('Liquidation Regulations') including inviting the claims from all the classes of creditors, filing of asset Memorandum along with a Preliminary Report, filing of a list of stakeholders, etc.

The Liquidator has also appointed a set of valuers in accordance with Regulation 35 of the Liquidation Regulations to determine the realizable value of the assets. As per the valuation reports submitted, the average liquidation value for land and building is Rs. 2,63,98,325/- (Rupees Two Crore Sixty-Three Lakh Ninety-Eight Thousand Three Hundred Twenty-Five Only) and valuation of plant and machinery is Rs. 9,50,50,000/- (Rupees Nine Crore Fifty Lakh Fifty Thousand Only) (in aggregate Rs. 12,14,48,325/-).

The Liquidator states that in the second Stakeholders Consultation Committee (SCC) meeting held on 04.09.2023, it was unanimously resolved to sell the Corporate Debtor as a going concern on a reserve price of Rs. 14.50 Crore. Accordingly, the Liquidator issued an e- auction notice on 11.09.2023 and the sale was held on 16.10.2023.

In response to the e-auction notice, the Liquidator received two EoIs along with the participation fee of Rs. 1 Lakh. However, out of the two EoIs only one bidder namely, Shri Datt India Private Limited had submitted the EMD of Rs. 1 Crore to participate in the e-auction for the sale of the Corporate Debtor as a going concern within the prescribed period. The said bidder was also considered eligible to participate in the e-auction after verifying its eligibility under Section 29A of the Code.

The Liquidator further submits that the e-auction was held on 16.10.2023 as per the e-auction notice wherein Shri Datt India Private Limited placed a bid at the reserve price of RS. 14.50 Crores and evolved as the successful bidder in the e-auction.

The Liquidator states that the Letter of Intent was issued to the Successful Bidder vide email dated 17.10.2023 as per which the residual bid amount was to be paid on or before 15.11.2023 without interest. If any amount is paid after 15.11.2023, interest @ 12% shall be payable and in case there is further delay beyond 90 days the sale shall stand cancelled.

The Liquidator states that the Successful Bidder paid the residual bid amount of Rs. 13.49 Crore and Rs. 23,55,021/- towards interest @ 12% on 13.01.2024 in the liquidation account of the Corporate Debtor. After receipt of the full and final amount, the Liquidator issued the sale certificate to the Successful Bidder on 25.01.2024 and handed over physical possession of the assets on 19.02.2024.

It is further stated that the Liquidator distributed the proceeds of sale in accordance with the Section 53 of the Code and the Secured Creditors have issued the ‘no dues cum security release certificate’ discharging their security on the assets of the Corporate Debtor.

The Liquidator submits that he has completed the Liquidation Process within a period of one year from the Liquidation Commencement Date and distributed amongst stakeholders. Since the sale consideration was not sufficient to satisfy the entire admitted claim of secured financial creditors, no distribution has been made to other secured creditors, operational creditors including statutory authorities and shareholders.

It is further stated that the original title deeds relating to the assets of the Corporate Debtor which were in the possession of the Union Bank of India were not traceable and hence the original title deeds could not be handed over to the Successful Bidder. However, Union Bank of India lodged a Police complaint on 20.02.2024 and made a public announcement on 21.02.2024, and issued a certificate in favour of the Successful Bidder, as regards the loss/misplacement of the original title deeds.

The Liquidator further submits that the Union Bank of India has been substituted in place of the Liquidator in the pending IAs (IA No. 298 of 2021 and IA No. 2515 of 2020) relating to avoidance applications for prosecuting these applications. Presently, one application filed by BEST for considering its claim as a secured creditor and admitting the interest amount of its claim which was rejected by the Applicant is pending before this Tribunal and undertaking has been obtained from the existing secured creditors that in the event, the application is allowed in favour of BEST, the existing secured creditors shall refund the excess distribution as per the revised calculations and the same shall be distributed to BEST undertaking.

The Liquidator has prepared a final report dated 08.03.2024 and filed Form-H.

The Liquidator submits that the Corporate Debtor has been sold as a going concern as per the Liquidation Regulations. In order to ensure the smooth running of the business of the Corporate Debtor, it is imperative that certain additional reliefs/concessions/relaxations and permissions are allowed which would be essential and necessary to run the business of the Corporate Debtor as a going concern by the Successful Bidder.

It is also stated that the permissions/relaxations/concessions/reliefs are crucial to kick-start the business of the Corporate Debtor and achieve value maximization of the Corporate Debtor. The Liquidator sought sanctioning of the reliefs and concessions stated therein.

The Successful Bidder has also stated the facts and has sought the same reliefs.

We have heard the Counsel for the Applicants and perused the documents on record.

Before delving into the submissions of the Counsels and prayers in the Applications, it will be useful to notice the legal position of a 'going concern sale' under the Code and allied Regulations.

The Code read with the Liquidation Regulations framed thereunder envisages three modes of revival of corporate debtor:

Resolution through CIRP under Chapter II of the Code;

Sale of the Corporate Debtor as a going concern under Liquidation Regulations 32(e) and (f);

A scheme of compromise or arrangement under Section 230 of the Companies Act, 2013, following an order for liquidation passed under Chapter III of the Code. The reason for incorporating modes (b) and (c) referred herein above is obvious that liquidation is a matter of last resort and sale as a going concern is likely to fetch better value for all stakeholders. If the assets of the corporate debtor are sold separately or enforced by the secured creditors, many intangibles forming part of a business such as contracts, leases, licenses, concessions, operational assets, manpower, technology, etc would be lost in the process as these assets either may not be transferable at all or may require third-party concurrence/approval for each such transfer.

The present case is in the liquidation so we focus our examination on the sale of the corporate debtor as a going concern in the liquidation process. Section 35(1) (f) of the Code lays down the powers and duties of the liquidator, one of which is, to sell the immovable and movable properties and actionable claims of the corporate debtor in liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, to sell the same in parcels in such manner as may be specified. Regulation 32 of the Liquidation Regulations further provides as under:

Thus, in Regulation 32 of the Liquidation Regulations, two modes are contemplated for the sale of the corporate debtor as a going concern. The distinguishing factor between the sale of the corporate debtor as a going concern as per sub-clause (e) and the sale of the business of the corporate debtor as a going concern as per sub-clause (f) appears to be that in the former situation, the corporate entity will continue without any dissolution.

While the Liquidation Regulations explicitly recognise 'sale as going concern' as one of the methods of sale, neither the Code nor the Liquidation Regulations provides the definition of 'going concern'. In one of the round table of IBBI with stakeholders held on 21.05.2018 to understand difficulties in selling corporate debtor as a going concern described 'going concern' as under:

Although the above description of 'going concern' may not be of much relevance, it is apparent that the central aim of selling a corporate debtor as a going concern under the liquidation process is to preserve the corporate entity as a functional business to save employment while maximising the returns for stakeholders. In other words, the ownership of the corporate debtor is transferred to the acquirer for operationalisation of the corporate debtor on certain terms and conditions as contained in the process document.

In the above background, the main contention of the Applicants is that the sale of the corporate debtor as a going concern has all the same attributes and characteristics of a resolution plan sanctioned under Section 31 of the Code. Consequently, whatever benefits and rigors apply to the resolution plan under Section 31 of the Code must equally apply to sale as a going concern in the liquidation process. Against this backdrop, it becomes necessary to notice that approval of the resolution plan involves multi-stakeholder consultations and application of mind in planning the future viability of the corporate debtor and takes place within the institutional framework of the Code. Further, a resolution plan once approved by the Adjudicating Authority is binding on all stakeholders as per the explicit provisions of the Code, and as a result, the stakeholders are bound to take the exercise of restructuring carefully and pragmatically. On the contrary, sale as a going concern is a mere sale instead of restructuring. Most of the stringent provisions that apply to the resolution plan are conspicuously absent in the case of sale as a going concern. The viability and feasibility of keeping the corporate concern are never a consideration and the decision is left to the liquidator requiring no approval from the Adjudicating Authority. Thus, although both modes aim to revive the corporate debtor, in our opinion, both are different, not comparable and belong to distinctly different categories under the Code.

It is noticed that 'the clean state theory of resolution plan' as recognised by the Hon'ble Supreme Court in Ghanashyam Mishra & Sons Pvt. Ltd v. Edelweiss Asset Reconstruction Company Ltd (2021) 9 SCC has been extended in a few cases of sale of the corporate debtor as a going concern during the liquidation process even though statutory provisions supporting the theory are limited to resolution plans. Thus, the primary question that falls for our consideration is whether the clean slate theory can be applied regardless of the terms and conditions of sale outlined in the process document. Additionally, we should examine what reliefs and concessions, such as waivers and exemptions from statutory and other liabilities, the Adjudicating Authority can grant to facilitate the operation of the corporate debtor's business.

Bearing in mind the elaborate and general reliefs that are claimed in the Applications, it would be apposite to deal with other prayer first. The Applicants seek to confirm the sale of the Corporate Debtor as a going concern without dissolution. No provision in the Code or Regulations has been brought to our notice requiring confirmation of sale by the Adjudicating Authority.

The records reveal that the Corporate Debtor was incorporated to generate, transmit, and distribute electrical energy for industrial and non-industrial uses. It was implementing a project on renewal energy by setting up 25 MW biomass-based power plants. However, the plant was not completed and commissioned, so the manufacturing operations were never started. Since no resolution plan was approved, the CoC, at its last meeting held on 14.09.2021, approved the liquidation of the Corporate Debtor and recommended the sale of its assets as a going concern.

As per the Report filed by the Liquidator, the total claims submitted in respect of the Corporate Debtor is Rs. 498.31 crores, and admitted claims are Rs. 341.15 crore. The average Realisable value of assets as determined by the valuers in the liquidation process is Rs.16.84 crore and the average liquidation value is Rs. 12.14 crores. Further, SCC in its second meeting held on 14.09.2023, observed that the Resolution Plans received during CIRP were lower than the liquidation value of Rs.16.75 crores ascertained during CIRP and hence decided to fix the reserve price by taking an average of the Realisable value and liquidation value determined during the liquidation process which comes to Rs.14.50 crore. Accordingly, SCC approved the Reserve Price, the timeline for the e-auction process, the Earnest Money Deposit, and the process document for the e-auction ('Process Document).

Accordingly, the e-auction was held on 16.10.2023 and Shri Datt India Private Limited was declared as a successful bidder (the Successful Bidder') for the reserve price of Rs.14.50 Crores. Upon receipt of the full bid amount together with interest for the late payment, the Liquidator issued the sale certificate on 25.01.2024 and handed over the physical possession of the assets on 19.02.2024. The Liquidator has further proceeded to distribute the sale consideration in accordance with Section 53 of the Code and the Secured Creditors have issued their no dues cum security release certificate discharging their security on the assets of the Corporate Debtor.

At this stage, nothing remains for the Adjudicating Authority to confirm the sale undertaken by the Liquidator in consultation with the SCC. The commercial wisdom exercised by SCC is neither subject to review of this Tribunal nor requires approval of the Tribunal as in the case of a resolution plan submitted under Sections 30 and 31 of the Code. The role of the Tribunal, in an auction sale, is very limited and the statute intentionally left the decision and sale process to the SCC and the liquidator unless challenged by any person. There is no scope for endorsement of the sale process or compliance with the Code and applicable Regulations. Therefore, we do not find any merits in the prayer seeking confirmation of Sale by the Tribunal, that too at a belated stage after completing the entire process of sale. We, therefore, merely take note of the sale of assets of the Corporate Debtor as a going concern.

27 Having dealt with the prayer regarding confirmation of sale by the Tribunal, we proceed further to various reliefs and concessions sought by the Applicants in the Applications.

Here, it will be advantageous to notice the relevant provisions of Liquidation Regulations:

In the first meeting, the SCC noted the aforesaid Regulation as also the decision of the CoC to sell the assets of the Corporate Debtor as a going concern. Thereafter, the second meeting of SCC held on 14.09.2023 decided to fix the Reserve price at Rs.14.50 crore and approved the process document for e-auction. The E-Auction Process Information Document for Sale ('the Process Document') issued by the liquidator pursuant to the approval of SCC provides, inter alia, that the Company is being sold as a going concern with all the existing and future encumbrances/claims/dues/demands whether known or unknown to the Liquidator (Clause 2 of the Terms and Conditions) and on 'As is where is basis' 'As is what is basis', 'Whatever there is basis' and 'No recourse basis. Clause 'C' - Introduction provides further that the successful bidder/s may approach NCLT to seek specific reliefs, if any.

The Ld. Counsel for the Applicants has stated that there are few precedents where the concept of 'clean slate' was extended in the case of 'going concern sale' under liquidation. It is submitted that eliminating legacy liabilities would encourage potential buyers to acquire businesses in liquidation, which can lead to better recovery for creditors. Further, allowing the business to operate without the baggage of past liabilities aids in preserving jobs and achieving the objective of revival of the corporate debtor. The Ld. Counsel appearing for the Applicants further states that in the instant case, the sale consideration deposited by the Applicant has already been distributed in accordance with Section 53 of the Code and the Corporate Debtor ought to be released from all past claims. The Counsel for the Applicants further submits that it is just, fair, and in the interest of justice that the clean slate theory is applied in order to enable the Successful Bidder to run, operate, and manage the Corporate Debtor as a going concern.

In the instant case, the terms and conditions of the Process Document state that the Company is being sold as a going concern with all the existing and future encumbrances/claims/dues/demands whether known or unknown to the Liquidator. In this context, the issue for consideration is whether the Tribunal can apply clean slate theory when the Process Document specifies otherwise.

It is on record that the Liquidator has distributed the sale consideration in accordance with Section 53 of the Code and the Secured Creditors have also issued their no dues cum security release certificate discharging their security on the assets of the Corporate Debtor. Thus, it is indisputable that this decision is binding on all the stakeholders who filed their claims with the liquidator and they cannot subsequently make additional claims or initiate action for any deficiency. However, the question is about the other claims that have not been filed with the liquidator at all. It is pertinent to note that the auction sale differs significantly from a private sale. In an auction sale, the Process Document—issued by the liquidator—sets out the terms and conditions under which the sale will occur. This document serves as the definitive guide for all participants, making it binding not only on the acquirer, liquidator, and creditors but also on the public, including potential bidders. Courts generally do not modify or nullify the terms of the Process Document, except if the terms contradict existing laws or violate public policy.

It would be here pertinent to refer to the case of Jasamrit Designers Private Limited v. Gian Chand Narang, Liquidator of Apex Buildings Limited & Another (Company Appeal (AT) (Ins.) No. 258 of 2023, wherein the Hon'ble NCLAT observed as under:-

The Hon’ble NCLAT, in the case of Shantech International Pvt. Ltd. v. Devendra Singh, Liquidator of Venus Rolling Mills Pvt. Ltd followed the principle that the waiver of liabilities with regard to dues of the Corporate Debtor should be dealt with according to the terms of the e-auction.

Since there is no specific provision in the Code or Liquidation Regulations that supports clearing all prior encumbrances in an asset sale, the Process Document’s terms are paramount. This approach is particularly relevant under Regulation 32A of the Liquidation Regulations, which permits the liquidator to sell assets subject to existing liabilities. Thus, we are of the view that the terms of sale outlined in the Process Document during a liquidation sale are to be adhered to and that any reliefs or concessions sought by the acquirer—such as a release from prior encumbrances—must align with the Process Document’s conditions.

Based on the discussions, we conclude that no claim filed with the liquidator shall survive after consideration of the same in accordance with Section 53 of the Code, and those claimants cannot subsequently make additional claims or initiate action for any deficiency. In relation to other claims, if any, existed on the date of sale by the liquidator, but no claim had been filed, a general direction cannot be issued that contradicts the terms of the Process Document. As a result, the relief in general is not granted.

Section 32A of the Code provides that the liability of a corporate debtor, for offences committed prior to the commencement of the Corporate Insolvency Resolution Process, will stand extinguished from the date a resolution plan is approved by the adjudicating authority or sale of liquidation assets, subject to certain conditions being fulfilled. This immunity under Section 32A is applicable once the approved resolution plan mandates a change in the management of the corporate debtor if such persons (1) were not directly or indirectly related to the old management of the corporate debtor; or (2) have not abetted or conspired for the commission of such an offence committed by the corporate debtor. Sub-section (2) seeks to extend the warranty in respect of the properties of the corporate debtor upon approval of the resolution plan or sale of liquidation assets while providing assurance against liability. Lastly, sub-section (3) obligates any such persons to aid any enforcement authority investigating under any applicable law.

It is pertinent to observe that the immunity provided under Section 32A of the Code is premised on various conditions being fulfilled. Further, the relief claimed by the Applicant goes much beyond the sweep of Section 32A of the Code which cannot be permitted. In view of the above, we allow the relief to the extent permitted under Section 32A of the Code and nothing more.

It is a settled position of law that the Tribunal cannot exercise its jurisdiction over matters dehors the insolvency proceedings especially when such matters fall in the realm of public law such as labour and employment laws, is concerned. Furthermore, the Tribunal cannot clothe itself with jurisdiction which is not expressly conferred on it by the provisions of the Code or the allied rules and regulations. We are of the view that waiver of the liabilities under Labour Laws with respect to going-concern sales requires due consideration by the appropriate authorities empowered under each statute. Hence, this relief cannot be granted by this Tribunal but the Successful Bidder is at liberty to approach the concerned authority to seek such reliefs.

In Gujarat Urja Vikas Nigam Limited v. Mr. Amit Gupta & Ors, the Hon’ble Supreme Court observed as under:

Based on the aforesaid decision and recognising the complete absence of any provision in the Code and allied Liquidation Regulations which enables the granting of such reliefs, we only grant liberty to the Successful Bidder to approach the concerned authorities to seek such reliefs.

In the case of sale as a going concern, the corporate entity continues to operate without dissolution and strives to maintain its business activities as much as possible. This process includes certain actions aimed at mitigating the effect of certain past actions such as cancelling the power of attorney granted by the previous management and revoking various negotiable instruments issued prior to the acquisition. These actions are directly related to operationalising the Corporate Debtor and are, therefore, granted.

It is pertinent to note that the only provision that can grant NCLT jurisdiction to address future matters concerning a corporate debtor is Section 60(5) of the Code provided such matters fall within the fold of the phrase ‘arising out of or in relation to the insolvency resolution or liquidation proceedings’. However, the jurisdiction of NCLT delineated in Section 60(5) cannot be excessively broadened to include all and any difficulties encountered in managing the Corporate Debtor as a going concern. Such an overreach is neither necessary nor permissible under the Code. Hence, this relief cannot be granted and is hereby declined.

The law is well settled that a bidder, who is declared as a successful bidder of going concern sale, can seek access to the Adjudicating Authority and may pray for necessary directors in accordance with and in consonance with the process document in the liquidation proceedings. The relief and concessions sought in deviation of the Process Document or wide terms cannot be granted. Accordingly, the relief is not granted.

It is observed that the Secured Financial Creditors, by issuing their 'no dues cum security release certificate' formally acknowledged that they have no remaining claims or security interests on the Corporate Debtor's assets. This certificate essentially clears the debtor's record with these creditors. However, staying on the defaulter's list maintained by CIBIL could hinder access to future financing and commercial opportunities, making removal a practical and supportive measure in the revival process. Therefore, we are inclined to grant this relief to help operationalise the business of the Corporate Debtor.

The Applicant is a successful bidder in respect of the sale of the assets of the Corporate Debtor carried out in the liquidation process. The position of an auction purchaser is not entirely different from a purchaser in any other public e-auction process. The only difference is that in the liquidation process, he acquires the assets for the purpose of revival of the business of the corporate debtor, wholly or partly. Though the sale cannot be compared with the Resolution Plan approved under the Code, certain reliefs and concessions that are commensurate and in accordance with the process document are generally granted to the auction purchaser, keeping in view the object and spirit of the Code, for the revival of the corporate debtor. If the acquisition through the liquidation route provided the same level of reliefs and concessions as a resolution plan, the applicants might circumvent the resolution process entirely, choosing the liquidation sale for its simplicity and fewer procedural requirements. This would undermine the Code’s structured approach, which prioritizes collective creditor involvement and consensus in restructuring efforts. The Tribunal is, therefore, cautious to grant only those reliefs that are necessary to enable the corporate debtor's business to operate as a going concern post-sale.

As for as exemption of stamp duty, registration fee, and other local levies of taxes with respect to the transfer of bid amount, we fail to appreciate that there is any connection with the revival of the Corporate Debtor. These are all levied by the authorities under Statutes for collecting revenue and, therefore, no exemption can be granted by this Tribunal. However, the Successful Bidder may approach the concerned authorities for the purpose.

This Tribunal cannot entertain requests for rights beyond what the Corporate Debtor actually holds in the assets. Specifically, the bidder seeks absolute ownership of the property leased by the Maharashtra Industrial Development Corporation (MIDC), despite the Corporate Debtor holding only leasehold rights. This request not only exceeds the bidder's rightful claim but is an attempt to secure rights that were never held by the Corporate Debtor.

With respect to other liabilities related to immovable properties, such as transfer fees imposed by MIDC as the lessor, property taxes levied by the revenue authorities, etc., the situation for the Successful Bidder remains unchanged. The transfer of property title or release of existing charges on the ROC records cannot take place without following the required process.

As regards other reliefs in this Section, the Tribunal notes that broad or vague requests, particularly those that lack statutory support, cannot be granted. Reliefs must be specific, legally justified, and should have a direct nexus with the revival of the corporate debtor. On account of the above, the reliefs sought in respect of the property are not even worth consideration and are liable to be rejected.

The contractual terms are binding on the parties involved, and the Tribunal, even with the intent to facilitate the revival of the Corporate Debtor, cannot overstep its jurisdiction to tinker with these terms to favour or to the disadvantage of any party, especially without allowing all parties to be heard.

Before considering the abovementioned relief(s), it would be appropriate to notice the scheme of the Code as regards obtaining licences, approvals, clearances etc.

Section 31(4) of the Code provides as under:

A plain reading of the above provision in the Code emphasises the need to obtain approvals required under the applicable laws even after a resolution plan is sanctioned under Section 31 of the Code. Thus, the scheme of the Code is not to dispense with the approvals and licenses required under the various laws but insists the same to be obtained within a timeframe. That being so even for a Resolution Plan, we do not see any reason to dispense the license, approvals, etc. in the present case for the mere reason that the object of acquisition is the revival of the Corporate Debtor.

Further, the explanation to Section 14(1) of the Code reads thus:

As per the above explanation, the licenses, permits, registrations, quotas, concessions, clearances, or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator, or any other authority constituted under any other law for the time being in force and contracts where the counterparty supplies essential/critical goods and services to the Corporate Debtor are to be kept unaffected during moratorium imposed under Section 14 and there is no provision in the Code for its continuation after the CIRP.

On account of the above, we do not see any justification to extend unilaterally the benefit of contract, license etc. to the Successful Bidder when the parties are bound by its terms. The terms of a contract, in our considered view, cannot be unilaterally changed, except through legislative intervention, to strike the appropriate balance between contractual freedom on the one hand and corporate rescue on the other. We, therefore, are not inclined to grant the aforesaid reliefs.

There are limitations in providing general reliefs and concessions as orders are to be passed after considering the specific fact situations. However, there are certain reliefs that have a direct nexus with the revival of the corporate debtor thereby giving legitimate jurisdiction to NCLT to grant such reliefs. Accordingly, the procedural requirements required under the Companies Act, 2013 or any other law for the time being in force for reduction and cancellation of whole or part of the equity share capital and reconstitution of the Board of Directors are allowed subject to the filing of necessary forms with the concerned authorities.

Registration of charges with the Registrar of Companies (ROC) is a critical compliance requirement under the Companies Act, 2013 intended for maintaining transparency in the creation or modification of charges over a company's assets. The need for dispensing this procedural requirement has not been stated in the application particularly when the secured financial creditors have already provided no dues cum security release letter. Hence, this relief is not granted.

As stated in the foregoing paragraphs, the revival of the corporate debtor as a going concern sale is not comparable with the Resolution Plan approved under Part II of the Code, and the various measures permitted to be considered for the resolution plan would not, by implication extend to the sale in liquidation through any of the modes allowed in Part III of the Code. Further, no provision in the Code or Regulations has been brought to our notice enabling merger in the liquidation process. Thus, we are of the view that in case a successful bidder for the corporate debtor intends to merge it with another entity, compliance with the Companies Act, 2013, and any other relevant laws is necessary and no dispensation can be made in the liquidation proceedings under the Code.

We have enabled the extinguishment of the existing shareholding of the Corporate Debtor and hence the relief has become infructuous. If not, the acquirer has to take the necessary steps to modify the rights in accordance with the law.

The Applicants have failed to provide any reasoning or justification for their request and hence we deem it unnecessary to consider the said relief.

The past liabilities including the tax liability of the Corporate Debtor have already been dealt with in paragraphs 28 & 31, so there is no need to revisit them.

The reliefs mentioned above have already been dealt with in the previous sections.

This relief, by no stretch of the imagination be considered as 'arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor' and no preferential treatment with respect to the business of the Corporate Debtor can be granted just because the Corporate Debtor had undergone insolvency as per the provisions of the Code. Consequently, this relief is rejected.

The reliefs mentioned above (sub-para ‘o’ to ‘s’) have already been dealt with in the previous sections.

In respect of Accounting

All the above reliefs have already been dealt with and rejected for the reasons stated in the foregoing part of the order and the same be considered as not granted.

As a result of the above detailed discussions, we partly allow the Applications by granting the reliefs to the extent mentioned in paragraphs 28, 29, 32, 35, 39(a), (b), (d), (e) and (p) of this order. All other reliefs, concessions, or prayers shall be deemed to have been rejected. However, the Successful Bidder shall be at liberty to approach the concerned authorities for the reliefs not granted by this Tribunal hereinbefore.

As regards the confirmation of sale, we are of the view that there is no requirement under the Code or Liquidation Regulations to confirm the e-auction sale or endorse the sale process undertaken by the Liquidator. Therefore, this Tribunal is merely recording the sale of the Corporate Debtor's assets as a going concern.

The Interlocutory Applications No.1626 of 2024 and No. 3067 of 2024 are disposed of in the above terms.