Ajay Kumar Agarwal vs Krishna Kr Chhaparia & Ors

Ajay Kumar Agarwal ....Appellant Vs. Mr. Krishna Kumar Chhaparia, ...Respondents Liquidator of Aditi Health Oils Pvt. Ltd. & Ors For Appellant Mr. Gaurav Mitra, Mr. Ishan Roy Choudhary, Mr. Ashish Chaudhary, Advocates. For Respondents Mr. Dilip Kr. Niranjan, Advocate for R1.

ORDER

22.09.2023: Heard Learned Counsel for the Appellant as well as Learned

Counsel for the Respondents.

2. This Appeal has been filed against the order dated 28.08.2023 passed

by the Adjudicating Authority (National Company Law Tribunal), Kolkata

Bench (Court-II), Kolkata, by which order the Adjudicating Authority

dismissed the IA (IB) No.1329/KB/2023 filed by the Appellant where the

Appellant, the Suspended Director of the Corporate Debtor has challenged the

auction notice dated 30.06.2023. In the Application, following prayers were

made:-

"a. Respondent be restrained by an order of injunction either by itself and/or by its men, agents, assigns and/or representatives from taking any steps or further steps and giving any effect or further effect to the Auction to be held on 27th July, 2023 in pursuance of the Sale Notice dated 30th June, 2023, being Annexure- O to this instant application, till the instant application is finally adjudicated.

b. Sale Notice dated 30th June, 2023, being Annexure- O, to this instant application, and all 2

consequential actions on the basis of the same be declared as illegal, null and void.

c. An order be passed directing the Respondent to provide the Applicant with the Valuation Report of the Corporate Debtor during Corporate Insolvency Resolution Process.

d. An order be passed directing the Respondent to conduct fresh valuation of the Corporate Debtor (In Liquidation).

e. Ad interim order in terms of prayers above;

f. Pass such further or other order or order and/ or direction or directions be given as this Hon'ble Tribunal may deem fit and proper."

3. The Application has been rejected by the Adjudicating Authority relying

on registered valuers reports which was obtained by the liquidator in the

liquidation proceedings.

4. The Learned Counsel for the Appellant challenging the order contends

that the valuation reports were received after one year from the date when the

valuers were appointed and further the Appellant has filed written

submissions alongwith e-Assessment Slip issued by the Government of West

Bengal, Directorate of Registration & Stamp Revenue dated 01.08.2023 which

has shown the total valuation of Rs.19,18,80,119/- for land and building

whereas the auction sale has been conducted for an amount of Rs.14.6 Crores

as a going concern. It is submitted that the object of the CIRP is to maximize

the value of the Corporate Debtor and the Adjudicating Authority committed

error in rejecting the Application.

5. Learned Counsel for the Liquidator opposing the submissions of the

Learned Counsel for the Appellant contends that the liquidator has obtained Company Appeal (AT) (Insolvency) No. 1250 of 2023 3

three valuation reports and average valuation report which was submitted by

valuer was Rs.1255.29 Lakhs as a going concern. It is submitted that the first

auction notice was issued on 22.08.2022 where the reserve price was

mentioned as Rs.22.15 Cr. and thereafter six auction notices were issued last

being 30.06.2023 where valuation of reserve price was reduced to Rs.14.6

Crores. It is submitted that the liquidator has not committed any error. Even

in the response to auction notice, only one person has expressed his interest,

which auction has been confirmed.

6. We have considered the submissions of the Learned Counsel for the

parties and perused the record.

7. Under the Insolvency and Bankruptcy Board of India (Liquidation

Process) Regulations, 2016, Liquidator has appointed valuers and in the

valuation report average value has been submitted as Rs.1255.29 Lakh. In the

first auction notice issued on 22.08.2022, the reserve price was shown as

Rs.22.15 Crores and since no one came forward, the liquidator has to issue

auction notice six times and the last was issued on 30.06.2023 for reserve

price as Rs.14.6 Crores. Under the Liquidation Regulations, 2016, Liquidator

is entitled to reduce the reserve price after each auction notice and when no

one came forward, the reserve price was reduced to Rs.14.6 Crores in which

we do not find any error. The submission of the Counsel for the Appellant that

valuation report was submitted after one year does not improve the case of the

Appellant since steps were taken by the Liquidator after the report was

received from the registered valuers.

Company Appeal (AT) (Insolvency) No. 1250 of 2023 4

8. Insofar as submission of the Appellant with regard to the e-Assessment

Slip dated 01.08.2023 which he filed along with the written submissions,

suffice it to say that the said document was not brought before the

Adjudicating Authority. There was no opportunity to liquidator to submit any

reply or response to said document. Adjudicating Authority has rightly not

placed any reliance on the said document. Further the liquidation process has

to be conducted in accordance with the Liquidation Regulations, 2016. When

liquidator has proceeded as per the Liquidation Regulations and reserve price

was reduced from 1st auction notice to 6th auction notice, no error is committed

in reducing the reserve price, hence, submission of the Appellant that

liquidator has issued auction notice on less valuation cannot be accepted.

9. We do not find any merit in the Appeal. The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) Anjali/nn

Company Appeal (AT) (Insolvency) No. 1250 of 2023