Kunwer Sachdev vs Su Kam Power System Ltd

Kunwer Sachdev S/o K.L. Sachdev R/o 1625, 25th Floor, The Magnolias, DLF Gold Links, DLF City Phasse-V Gurugram- 122002 ...Appellant

Versus

1. Su-Kam Power Systems Ltd. Through Sh. Raj Kumar Ralhan(Liquidator), Flat No. 801, Tower 01, Kalypso Court, Sector128, Jaypee Greens Wish Town, Noida, Gautam Budh Nagar, Uttar Pradesh

2. Sh. Raj Kumar Ralhan Liquidator, Flat No. 801, Tower 01, Kalypso Court, Sector128, Jaypee Greens Wish Town, Noida, Gautam Budh Nagar, Uttar Pradesh

3. Pricewaterhouse Coopers Private Limited Building 10 Tower C, 17th and 18th Floor, DLF Cyber City, Gurgaon 122002

4. PRICE WATERHOUSE COOPER -2-

SERVICES LLP Building 10 Tower C, 17th and 18th Floor, DLF Cyber City, Gurgaon 122002

5. Mr. Navraj Mittal R/o House No. 1331, Sector-4, Panchkula, Haryana

6. Mr. Vishnu Prakash R/o House No. 63, Sector-6, Panchkula, Haryana

7. Mr. Ashok Kumar Gupta R/o House No. 1331, Sector-21, Panchkula, Haryana

8. Mr. Yajan Bansal R/o House No. 78, Sector-21, Panchkula, Haryana ...Respondents

For Appellant: Mr. Ravi Gupta, Sr. Advocate with Ms. Anuradha Salhotra, Mr. Sumit Wadhwa, Ms. Saloni Chowdhry, Mr. Aysuh Samaddar, Mr. Dhruv Gupta, Mr. Sachin Jain, Advocates Mr. Gaurav Mitra, Advocate for Intervenor For Respondent: Mr. Abhinav Vashisht, Sr. Advocate with Mr. Siddhant Kant, Mr. Krishan Singhal, Advocates for R-2 Mr. Krishnendu Datta, Sr. Advocate with Ms. Bani Brar, Mr. Rajat Sinha, Advocates for Respondent No. 1 & 5-8. Mr. T. Srinivasa Murthy, Ms. Shanelle Umarwadia, Ms. Trushita Shrivastava, Advocates for R-3 and R-4

Company Appeal (AT) (Insolvency) No. 673 of 2022 -3-

JUDGMENT

ASHOK BHUSHAN, J:

1. This Appeal by a Suspended Director of the Corporate Debtor has been

filed challenging the Order dated 11th May, 2022 passed by the National

Company Law Tribunal, New Delhi, Principal Bench by which I.A. No.

233/PB/2021 filed by the Liquidator for approving the acquisition plan

submitted by the Respondent Nos. 5 to 8 has been approved and I.A. No.

672/PB/2021 filed by the Appellant for appointment of Independent

Forensic Auditor has been rejected.

2. Brief facts of the case necessary for deciding this Appeal are:-

(i) Corporate Insolvency Resolution Process (CIRP in short) was

initiated by Order dated 05th April, 2018 passed by the

Adjudicating Authority on an Application filed under Section 7 of

the Insolvency and Bankruptcy Code, 2016 (IBC in short) by the

State Bank of India. On 04th June, 2018, an Advertisement was

issued by the Resolution Professional inviting expression of interest

(EOI in short), Appellant filed a Resolution Plan in consortium with

M/s. Phoenix ARC Limited, the Appellant was declared ineligible

under Section 29A (h) of the IBC by the Committee of Creditors

(CoC in short). In absence of any Resolution Plan, Resolution

Professional filed an Application for an Order of Liquidation of the

Corporate Debtor.

(ii) The Adjudicating Authority by Order dated 03rd April, 2019

appointed Mr. Raj Kumar Ralhan-Respondent No. 2 herein as the

Liquidator.

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(iii) An Appeal was filed by some of the employees challenging the

Order of Liquidation which Appeal was disposed of by this Tribunal

on 29th April, 2019 upholding the Order of the Liquidation with

direction to Liquidator to make an attempt towards seeking a

scheme of compromise/arrangement in terms of Section 230 of the

Companies Act, 2013 and on failure, the Liquidator was required

to take steps to sell the business of the Corporate Debtor as a

going concern.

(iv) On 02nd August, 2019, Liquidator issued EOI inviting interested

persons to submit their EOI for scheme of

Compromise/Arrangement in terms of Section 230 of the

Companies Act, 2013. The Liquidator vide Email dated

19/09/2019 informed that the Appellant is ineligible for

submission of scheme of compromise/arrangement in terms of

Section 230 of the Companies Act, 2013.

(v) An Application was preferred by the Appellant before the

Adjudicating Authority seeking to participate in the

Compromise/Arrangement proceedings under Section 230 and 232

of the Companies Act, 2013. The Adjudication Authority vide Order

dated 31st October, 2019 held the appellant ineligible to submit a

Resolution Plan in terms of Section 29A(h) cannot make an

Application for Compromise/Arrangement in terms of Section 230- 232 of the Companies Act, 2013. The Order dated 31st October,

2019 was challenged by the Appellant by filing an Appeal which

Appeal was dismissed by this Tribunal vide Order dated 19th

Company Appeal (AT) (Insolvency) No. 673 of 2022 -5-

December, 2019. The decision of this Appellate Tribunal was

challenged before the Hon'ble Supreme Court by filing a Civil

Appeal No. 2719 of 2020 which came to be dismissed by the

Hon'ble Supreme Court by Order dated 27th October, 2020.

(vi) The Liquidator made public announcement inviting EOI for

acquisition of the corporate debtor as a going concern under

Regulation 32 and 33 read with Schedule I of the 'Insolvency and

Bankruptcy Board of India (Liquidation Process) Regulations,

2016' (hereinafter referred to as "Liquidation Regulations") on 27th

December, 2019. On failure of First Auction, another public

announcement was made by the Liquidator on 04.05.2020 inviting

bidders for acquisition of the corporate debtor as a going concern.

On 31st August, 2020, Liquidator in consultation with the

Stakeholders' Consultation Committee issued a process document

giving details for sale of the corporate debtor as a going concern.

(vii) On 03/09/2020, Liquidator made an amendment to the public

announcement by amending the announcement made on

04/05/2020. By amendment, other tangible assets including

intellectual property rights, including Brand (Su-Kam) was also

added. Auction of the Corporate Debtor was conducted on

12.10.2020 and 14.10.2020 for a reserve price of Rs. 40 Crores. A

bid of Rs. 49.95 Crores given by Respondent Nos. 5 to 8 was

declared to be the highest bid. The Highest Bidder remitted 10 % of

the bid amount by way of RTGS towards performance security and

Company Appeal (AT) (Insolvency) No. 673 of 2022 -6-

bank guarantee for 15% of the bid amount on 19th and 20th

October, 2020.

(viii) On 14/12/2020, the Liquidator filed an I.A. No. 233/PB/2021

before the Adjudicating Authority seeking approval to the highest

bid received in the Liquidation Proceedings. On 10.02.2021, I.A.

No. 672/PB/2021 was filed before the Adjudicating Authority by

the Appellant seeking an Order for appointment of an 'Independent

Forensic Auditor' for conducting forensic audit to analyze the

reduction of value of the assets of the Corporate Debtor from the

date of the commencement of the insolvency till the date of filing of

the said application. Application also prayed for stay on the

application moved by the liquidator for approval of the acquisition

of the assets of the corporate debtor.

(ix) On 26th May, 2021, a consortium led by Gurpreet Singh Vohra

offered settlement value of Rs. 62 Crores which was not accepted

by Liquidator. An application was also filed by the Gurpreet Singh

Vohra before the Adjudicating Authority seeking direction to

acquire the corporate debtor as a going concern.

(x) The Adjudicating Authority vide Order dated 11th May, 2022

allowed the I.A. No. 233/PB/2021 filed by the Liquidator approving

the acquisition plan of the Corporate Debtor and dismissed the

Application filed by the Appellant seeking appointment of

'Independent Forensic Auditor'.

(xi) Aggrieved by the above Order, this Appeal has been filed by the

Appellant.

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3. We have heard Mr. Ravi Gupta, Sr. Advocate for the Appellant, Mr.

Abhinav Vashisht, Sr. Advocate appearing for the Liquidator and Mr.

Krishnendu Datta, Sr. Advocate appearing for Respondent No. 1 and 5 to 8.

4. Mr. Ravi Gupta, Learned Sr. Counsel for the Appellant contended that

Successful Bidder having not deposited the bid amount within ninety days

from the date when they were declared as highest bidder, the auction sale

deserved to be rejected. It is submitted that in auction sale held by the

Liquidator as a going concern, there was no requirement for obtaining any

prior approval of the Adjudicating Authority, the Liquidator filed the

Application seeking prior approval of the Adjudicating Authority to give

undue benefit to the Respondent Nos. 5 to 8 and to give a long time to them

to deposit the bid amount. It is submitted that the Adjudicating Authority

has also committed error in observing that the Appellant Ex-Promoter has no

locus standi to participate or agitate in the proceeding or submission of

settlement proposal at that stage. Appellant being the promoter/ex-

management of the Corporate Debtor had every right and locus to challenge

the approval of auction sale which was not in accordance with the provisions

of Liquidation Regulations. It is submitted that the role of ex-management is

to assist the Liquidator for maximization of the value of the assets of the

Corporate Debtor. It is further submitted that Liquidator has undervalued

the assets of the Corporate Debtor. It is submitted that intellectual property

of the Corporate Debtor having trademark (Su-Kam) had substantial value

which although was added by amendment in the auction notice by the

Liquidator but value of the assets of the corporate debtor was not increased.

It is submitted that the First Public Notice dated 27.12.2019, the assets of

Company Appeal (AT) (Insolvency) No. 673 of 2022 -8-

the corporate debtor were valued at the reserve price of Rs. 51 Crores which

was reduced in second public notice to 40 crores. Reserve Price was still kept

at 40 crores even though by amendment on 03.09.2020 in tangible assets

and intellectual property rights including the brand name (Su-Kam) was

added. On 03rd April, 2022, Appellant proposed a settlement under Section

12-A of the IBC with upfront payment of Rs. 5 Crore and further payment of

Rs. 45 Crores. The Liquidator has included the brand name trademark that

is Su-Kam of which the Appellant has the proprietor right and Appeal before

the Division Bench of the Delhi High Court is still pending. There have been

materials breaches committed by the Liquidator in the procedure followed by

the Liquidator, there was no provision for the Liquidator to seek approval of

the bid/acquisition plan of successful bid in a public auction from the

Adjudicating Authority. LOI having been issued by the Liquidator on

16.10.2020, the successful bidder was obliged to deposit the entire amount

within 90 days thereafter. The auction sale held on 14.10.2020 deserved to

be set aside since the payment as per statutory provision was not made

within 30 days. Mr. Gurpreet Singh Vohra has given an offer to take the

corporate debtor for a minimum amount of Rs. 62 Crores which was at least

1.25 times more than accepted bid of Respondent No. 5 to 8 however the

same was not accepted by the Liquidator.

5. Learned Sr. Counsel for the Liquidator refuting the submission of

Learned Sr. Counsel for the Appellant submits that Appellant ex-promoter

had made every possible attempts to take control of the Corporate Debtor in

which he failed. The Appellant was held ineligible to submit any Resolution

Plan or any scheme of compromise/arrangement which order was affirmed

Company Appeal (AT) (Insolvency) No. 673 of 2022 -9-

upto the Hon'ble Supreme Court. The Liquidator has complied all the

relevant provisions of the Code and the Liquidation Regulations under the

process document dated 31st August, 2020. The Liquidator was entitled to

file an Application before the Adjudicating Authority for approval of the

auction sale. Clauses 1.10.6 and 1.16.1 of the process document authorized

the Liquidator to make suitable application to the Adjudicating Authority for

the purpose of obtaining approval of the auction sale. Once the approval is

granted by the Adjudicating Authority, Successful Bidder is obliged to

deposit the entire amount within 90 days. In the present case, after approval

of the Adjudicating Authority by Order dated 11.05.2022, on 21st May, 2022,

the Auction Purchaser remitted balance consideration of Rs. 44,95,50,000/-

and on 23rd May, 2022, the Liquidator distributed the proceeds of the sale as

a going concern to the various creditors. On 31st May, 2022, the Liquidator

issued certificate of sale as a going concern to the auction purchaser. The

liquidation of the corporate debtor has come to an end and Company now

vests exclusively with auction purchaser. The liquidator received a letter

dated 31st March, 2021 from the Appellant informing that they have formed

consortium to submit bid and it was after the aforesaid letter at the instance

of the Appellant Mr. Gurpreet Singh Vohra made an application on 26th May,

2021 seeking to acquire the corporate debtor as a going concern which was

rejected.

6. Mr. Krishnendu Datta, Learned Sr. Counsel appearing for Respondent

No. 1 and Successful Bidders supported the submissions made on behalf of

the Learned Counsel for the Liquidator and contends that Respondent Nos. 5

to 8 being successful bidder has made entire deposit within 90 days as per

Company Appeal (AT) (Insolvency) No. 673 of 2022 -10-

the Liquidation Regulations. The submissions of Learned Sr. Counsel for the

Appellant that there was no requirement of filing an application for approval

is incorrect. Process Document clearly contemplated obtaining prior approval

of the Adjudicating Authority for sale of the Corporate Debtor as a going

concern. Respondent No. 5 to 8 after acquiring the Corporate Debtor are

running the Corporate Debtor as a going concern. Mr. Gurpreet Singh Vohra

has now claimed to have given an offer for taking over the corporate debtor

who was a member of consortium who had given earlier EOI on 18th March,

2019, there was no occasion to accept any request made by Mr. Vohra who

did not participate in the auction.

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

parties and have perused the record.

8. Before we proceed to enter into the respective submissions of Learned

Counsel for the parties, it is relevant to notice certain clauses of process

document dated 31st August, 2020 which was issued by the Liquidator

containing the terms and conditions for participation in the Bid. The process

document gives in detail all earlier proceedings. Clause 1.10.6 deals with

approval of the adjudicating authority which is to the following effect:

"1.10.6 Approval of the Adjudicating Authority In the event that any sale under this Process Document requires approval of the Adjudicating Authority, based on the legal advice received by the Liquidator, the Liquidator shall make suitable application(s) to the Adjudicating Authority for approval of the said sale. In such an event, notwithstanding anything contained in this Process

Company Appeal (AT) (Insolvency) No. 673 of 2022 -11-

Document, such sale shall be subject to the approval of the Adjudicating Authority."

9. Clauses 1.16.6 and 1.16.7 deal with approval of the bid by the

Adjudicating Authority which is to the following effect:

"1.16.6 Step VI - Approval of the Bid by the Adjudicating Authority Upon acceptance of Letter of Intent by the Successful Bidder(s) and upon submission of Performance Security by the Successful Bidder(s) within the timelines defined above, the Liquidator may, if required, make an application to the Adjudicating Authority for approval of the Bid. Upon approval of the Bid(s) by the Adjudicating Authority, such Bid(s) would be implemented in terms of Step VII below.

1.16.7 Step VII: Transfer of the Company as a going concern or the Assets With respect to the acquisition of the Assets, the Successful Bidder (s) shall ensure that the Transfer Date occurs within 90 days of the issuance of the Letter of Intent to the Successful Bidder(s). The Liquidator shall issue Certificate of Sale (countersigned by the Liquidator or any authorized Representative of the Liquidator) to the Successful Bidder(s) for the relevant Asset. It is hereby clarified that upon the issuance of Certificate of Sale, the risk and title to the Asset shall stand transferred to the Successful Bidder(s). It shall be the responsibility of the Successful Bidder(s) to take the delivery of the Assets. The delivery of the Assets by the Liquidator to the Successful Bidder(s) shall be evidence by a

Company Appeal (AT) (Insolvency) No. 673 of 2022 -12-

delivery receipt signed by the Liquidator or any authorized Representative of the Liquidator and acknowledged by the Successful Bidder(s).

With respect of acquisition of the Company as a going concern, the Successful Bidder shall ensure that the Transfer Date occurs within 90 days of the approval by the Adjudicating Authority of the Bid of the Successful Bidder.

Without prejudice to the above mentioned timeline, the Company and the Successful Bidder shall enter into suitable definitive documents to the satisfaction of the Liquidator to give effect to the acquisition of the Company as a going concern or the Assets, as the case may be. The successful Bidder shall make payment of the balance consideration within 30 days of the demand raised by the Liquidator and any amount received after the said period will attract interest @ 12 % p.a."

10. The principal challenge which was laid by the Learned Sr. Counsel for

the Appellant is non-compliance of the provision of Liquidation Regulations

by the Respondent Nos. 5 to 8 in not making the payment of bid amount

within 90 days from the date of Letter of Intent was issued that is 90 days

with effect from 16.10.2020. We need to notice the relevant provisions of

Liquidation Regulations, 2016. Regulation 33 deals with "Mode of Sale".

Regulation 33 is as follows:

"33. Mode of sale. (1) The liquidator shall ordinarily sell the assets of the corporate debtor through an auction in the manner specified in Schedule I.

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(2) The liquidator may sell the assets of the corporate debtor by means of private sale in the manner specified in Schedule I when-

(a) the asset is perishable;

(b) the asset is likely to deteriorate in value significantly if not sold immediately;

(c) the asset is sold at a price higher than the reserve price of a failed auction; or

(d) the prior permission of the Adjudicating Authority has been obtained for such sale:

Provided that the liquidator shall not sell the assets, without prior permission of the Adjudicating Authority, by way of private sale to-

(a) a related party of the corporate debtor;

(b) his related party; or

(c) any professional appointed by him.

(3) The liquidator shall not proceed with the sale of an asset if he has reason to believe that there is any collusion between the buyers, or the corporate debtor's related parties and buyers, or the creditors and the buyer, and shall submit a report to the Adjudicating Authority in this regard, seeking appropriate orders against the colluding parties."

Company Appeal (AT) (Insolvency) No. 673 of 2022 -14-

11. Schedule 1 of the Liquidation Regulations deals with Mode of Sale.

Reliance has been placed on Paragraph 12 of Schedule 1 as has been

inserted with effect from 25th July, 2019. Para 12 is as follows:

"[(12) On the close of the auction, the highest bidder shall be invited to provide balance sale consideration within ninety days of the date of such demand:]

Provided that payments made after thirty days shall attract interest at the rate of 12%:

Provided further that the sale shall be cancelled if the payment is not received within ninety days."

12. The submission of Learned Sr. Counsel for the Appellant is that

Schedule I requires that on the close of the auction, the highest bidder shall

be invited to provide balance sale consideration within 90 days of the date of

such demand. It is submitted that when on 16.10.2020, the Respondent

Nos. 5 to 8 were declared as highest bidder, they ought to have made the

entire payment within a period of 90 days and they have not made the

payment within 90 days, the sale is liable to be cancelled. Further

submission of Learned Counsel for the Appellant is that there was no

requirement of obtaining any approval to the auction sale by the Liquidator

from the Adjudicating Authority. An application filed by the Liquidator

seeking approval of the Adjudicating Authority for approval of sale was not in

accordance with the Liquidation Regulations and can not give any benefit to

Respondent No. 5 to 8.

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13. Schedule 1 Paragraph 3 empowers the Liquidator to prepare terms

and conditions of sale. Paragraph 3 of the Schedule 1 is as follows:

"The liquidator shall prepare terms and conditions of sale, including reserve price, earnest money deposit as well as pre-bid qualifications, if any.

[Provided that the liquidator shall not require payment of any non-refundable deposit or fee for participation in an auction under the liquidation process:

Provided further that the earnest money deposit shall not exceed ten percent of the reserve price.]"

14. The process document dated 31st August, 2020 can be said to be

terms and conditions of sale prepared by the Liquidator. We have already

noticed the clauses of process document which provides for approval of the

bid by the adjudicating authority. The application filed by the Liquidator

after conducting of sale is in accordance with the process document and the

submission of Learned Counsel for the Appellant that there was no

requirement of liquidator in making an application for obtaining approval of

the adjudicating authority cannot be accepted.

15. Learned Counsel for the Appellant sought to contend that wherever

the prior approval of the adjudicating authority is required for a sale, the

same is provided in Schedule I, he has referred to Regulation 33 sub-

regulation 2(d). He submits that Schedule I does not require any prior

approval of the Adjudicating Authority for auction sale. It is true that public

auction by the liquidator does not require any approval in the regulations

Company Appeal (AT) (Insolvency) No. 673 of 2022 -16-

but when Schedule I paragraph 3 is read with process document, the prior

approval of the auction sale by the Adjudicating Authority cannot be ruled

out. This tribunal had occasion to consider a similar issue in Company

Appeal (AT) Ins. No. 1212-1213 of 2022 "Rimjhim Ispat Ltd. & Anr. Vs.

Jindal Stainless Limited & Ors.". In the above case, the Liquidator made

an Application to the Adjudicating Authority seeking approval of the sale of

the corporate debtor as a going concern. Contention was raised that no

approval of the adjudicating authority was required. In the above case also

the process document contemplated approval of the adjudicating authority.

In paragraph 19-21, following was observed:

"19. After noticing the relevant statutory provisions and process document containing terms and conditions of the sale and also certain conditions contained in the LOI issued by the Appellant, it is clear that the process documents itself contemplated about the approval of the NCLT. We have noticed above under heading G-Terms and Conditions of Limited eAuction which specifically noted that payment shall be done in three instalments (i) 10% of reserve price amount as EMD amount before participation in the E-Auction Process, (ii) 33% to be paid after the approval order from the Hon'ble NCLT within 60 days and (iii) balance amount shall be paid within one year from the date approval by the AA with interest at MCLR. We further noticed that in the Letter of Intent also there are specific conditions which contemplated "the sale of the Corporate Debtor as a going concern to the Successful Bidder is subject to approval by the Hon'ble NCLT, Principal Bench, New Delhi."

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20. Now the submissions which has been pressed by Learned Counsel for the Appellant is that prior permission for sale with regard to the private sale as contemplated under Regulation 33 is only with regard to three circumstances mentioned in the proviso and for no other private sale, any prior permission of the Adjudicating Authority is required. The proviso to Regulation 33(2) as noted above is clear that the sale as contemplated in (a), (b) and (c) shall not be done without prior permission of the adjudicating authority. Thus the sale with regard to a related party of the Corporate Debtor, his related party or any professional appointed by the liquidator requires prior permission. Present is not a case where proviso to Regulation 33 (2) is attracted since present sale is not covered by any of the contingency mentioned in proviso hence present is a case where no prior permission of the adjudicating authority was required. Thus Learned Counsel for the Appellant is right in her submissions that present is not a case where prior permission of the sale was required by the Adjudicating Authority.

21. We have noticed above that in the Process Information Document as well as conditions of the Letter of Intent, there is specific contemplation of approval of the sale by the Adjudicating Authority and issue of sale certificate subsequent to making entire payment. Learned Counsel for the Appellant has referred to clause 2 under Heading A. "2. The information provided in the instant Auction Document should be read together with the provisions of the

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Code and the Liquidation Process Regulations. In the event of any conflict between the instant Auction Document and the Code or the Liquidation Process Regulations, the provisions of the Code or the Liquidation Process Regulations, as the case may be shall always prevail."

16. This Tribunal also held that the process document required approval

of the Adjudicating Authority are not in conflict with any provisions of

Liquidation Regulations. In paragraph 23 of the above judgement, this

Tribunal held that there is no conflict between the terms of the sale requiring

approval of the NCLT under the Regulation 33 or Schedule I of Liquidation

Regulations.

17. We thus are of the view that Liquidator did not commit any error in

making an application to the Adjudicating Authority for approval of the sale

and after approval of the sale, inviting the Successful Bidder to deposit the

balance bid amount. The sale was approved by the Adjudicating Authority on

11th May, 2022 and within 10 days, Successful Bidder had deposited the

entire balance amount. Thus, there is no breach of any provision of

Liquidation Regulations, 2016 especially cause 12 of Schedule I.

18. The submission of Learned Counsel for the Appellant that payment

was not made within 90 days hence thus cannot be accepted. We thus are of

the view that Successful Bidder has deposited the amount within the time as

prescribed in Clause 12 of Schedule I of Liquidation Regulations.

19. Learned Counsel for the Appellant has also raised issue regarding the

reserve price on which auction sale was conducted in pursuance of second

auction notice. Admittedly in First Auction Notice, the reserve price was Rs.

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51 Crores after auction failed, liquidator in accordance with the provisions of

Schedule I has reduced the reserve price as per Schedule I hence reserve

reduced price of second auction was Rs. 40 Crores.

20. The Successful Bidder has been sold the Corporate Debtor for Rs.

49.95 Crores that is much above the reserve price. Liquidator is entitled to

fix the auction price as per the liquidation valuation and the provisions of

Liquidation Regulations, 2016. It is not the case of any of the parties that

fixing the reserve price on Rs. 51 Crores in the First Auction, there was any

challenge to the reserve price. The submission of Learned Counsel for the

Appellant that reserve price is less, cannot be accepted.

21. The Appellant in his appeal by Annexure A-18 has brought on record

the Settlement Proposal dated 03rd April, 2022 which proposal is submitted

by the Appellant where he had proposed upfront payment of Rs. 5 Crore with

conversion of Rs. 45 Crores into zero interest term loan, balance debt of

secured creditor will be converted into equity of the company. It does not lie

in the mouth of the Appellant to contend that reserve price fixed by the

second auction is not in accordance with law.

22. Learned Counsel for the Appellant has referred to the intellectual

property right that is the trademark of Su-Kam which was included by the

amendment to the auction sale notice by the liquidator. Liquidator in his

Reply has relied on the order of the Learned Single Judge of the Delhi High

Court where Learned Single Judge of Delhi High Court on 30th October, 2019

passed an order in CS (COMM) No. 1155/2018 which was filed by the

Corporate Debtor through Resolution Professional seeking injunction against

the Appellant with respect to the trademark where Learned Single Judge has

Company Appeal (AT) (Insolvency) No. 673 of 2022 -20-

granted decree in the suit filed by the Corporate Debtor through Resolution

Professional and it was according to the judgement of the Delhi High Court

that by amendment in the sale of the Corporate Debtor as a going concern,

intellectual property rights were also included.

23. Learned Counsel for the Appellant has also contended that there being

higher offer before the Liquidator that is offer made by Gurpreet Singh Vohra

of minimum Rs. 62 Crore, same ought to have been accepted and considered

by the Liquidator. It is to be noted that offer made by Mr. Vohra was

subsequent to auction held for sale of the corporate debtor as a going

concern. Learned Counsel for the Liquidator has during his submissions

referred to Letter dated 15th March, 2021 which has been filed along with the

Reply of the Liquidator written by the Appellant to the Liquidator informing

that Appellant has formed a consortium and group of person to submit a

bid. Submission of Learned Counsel for the Liquidator is that letter written

on behalf of Gurpreet Singh Vohra is nothing but letter at the instance of the

Appellant which is another attempt to create hurdles in sale of corporate

debtor as a going concern. Mr. Gaurav Mitra, Learned Counsel appearing

sought to intervene and contend that Mr. Vohra is still ready to offer higher

amount. Such request of Mr. Vohra cannot be entertained at this stage.

24. In view of what has been said above, we are of the view that

Adjudicating Authority did not commit any error in passing the Order dated

11th May, 2022 approving the Auction of Corporate Debtor as a going

concern in favour of Respondent Nos. 5 to 8. The Adjudicating Authority also

did not commit any error in rejecting the Application filed by the Appellant

praying for appointment of 'Independent Forensic Auditor' for conducting a

Company Appeal (AT) (Insolvency) No. 673 of 2022 -21-

forensic audit. The said application has rightly been rejected by the

Adjudicating Authority. Valuation having already been done and auction sale

notice have been issued and auction sale conducted identifying the

Successful Auction Bidder, there was no occasion for directing any

appointment of forensic auditor at the instance of the appellant.

25. We thus are of the view that no grounds have been made to interfere

with the impugned order dated 11th May, 2022 in this Appeal. There is no

merit in the Appeal, the Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical)

03rd February, 2023

New Delhi

Basant

Company Appeal (AT) (Insolvency) No. 673 of 2022