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2025 Supreme(Online)(NCLT) 4030
NATIONAL COMPANY LAW TRIBUNAL
SMT. BIDISHA BANERJEE, CMDE SIDDHARTH MISHRA, JJ
Gouri Iron & Steel Private Limited – Appellant
Versus
Uttam Tekriwal, Liquidator of the Gouri Iron and Steel Private Limited – Respondent
Company Petition (IB) No. 103/KB/2020
For the Appellants/Petitioners: Mr. Dheeraj Garg, Adv., Ms. Saloni Agarwal, Adv.
For the Respondents: Mr. Rahul Sharma, Adv., Ms. Chandrika Sharma, Adv.
The court held that purchasers of a Corporate Debtor during liquidation can seek protections similar to those granted under resolution plans, limiting liability for undisclosed claims and ensuring operational continuity.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 60(5) - Corporate Debtor acquisition - Application for reliefs by Liquidator seeking exemptions and concessions during revival process. The court allowed prayers related to protecting the purchaser from past liabilities and ensuring continuity of operations post-sale. (Paras 5-14)
(B) Corporate insolvency resolution process - The application filed after liquidation detected potential liabilities; thus, reliefs granted mirrored the protections available under a resolution plan, ensuring a 'clean slate' for new management. (Paras 6, 9, 10, 14)
Facts of the case:
The Liquidator initiated the auction process followed by a successful bid for the acquisition of Gouri Iron and Steel Private Limited, after unsuccessful attempts for resolution. (Paras 4.1-4.10)
Findings of Court:
All claims not included in the resolution plan are extinguished to maintain a fresh start for going concern, ensuring operational viability. (Paras 6, 8, 14)
Issues: Whether the reliefs requested by the Liquidator align with the provisions of the IBC and existing legal precedents regarding liabilities of Corporate Debtors post-acquisition. (Paras 10-14)
Ratio Decidendi: The court emphasized the necessity of protecting purchasers from undistributed claims to ensure clarity and operational continuity, applying principles established in Ghanashyam Mishra and related cases. (Paras 6, 14)
Result: Application disposed of with granted reliefs.
ORDER
PER Bidisha Banerjee, Member (Judicial):
1. This Court congregated through hybrid mode.
2. Heard the Learned Counsels for both parties.
3. This application has been preferred by Uttam Tekriwal, Liquidator of the Gouri Iron and Steel Private Limited has been filed by the Applicant herein being the Liquidator under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (“IBC” or “Code, seeking reliefs , exemptions, concessions which are critical for the successful revival of the Corporate Debtor seeking for the following reliefs:
a. This Hon’ble Adjudicating Authority be pleased to allow this application;
b. This Hon’ble Adjudicating Authority be pleased to grant the reliefs and concessions as referred in para 26 of this application;
c. That this Hon’ble Tribunal may be pleased to grant such other and further reliefs as may be deemed fit and proper by this Hon’ble Tribunal, in the interest of justice;
4. Factual Matrix
4.1 The present application has been filed by the Applicant, a registered partnership firm, seeking necessary directions in connection with the acquisition of the Corporate Debtor, Gouri Iron and Steel Private Limited, as a going concern under the provisions of the Insolvency and Bankruptcy Code, 2016 .
4.2 Gouri Iron and Steel Private Limited, the Corporate Debtor, was incorporated under the provisions of the Companies Act, 1956 . The Corporate Debtor itself had initiated the Corporate Insolvency Resolution Process (CIRP) by filing an application under Section 10 of the IBC, which was admitted by this Adjudicating Authority vide order dated 25.11.2021. Mr. Netai Basak was appointed as the Interim Resolution Professional.
4.3 Upon failure of the resolution process, an Interlocutory Application bearing IA (IB) No. 602/KB/2022 was filed before this Tribunal seeking initiation of liquidation proceedings. The said application was allowed, and liquidation of the Corporate Debtor was ordered by this Adjudicating Authority vide order dated 24.11.2022.
4.4 Thereafter, the Liquidator initiated the process for sale of the Corporate Debtor as a going concern. A Sale Notice dated 21.09.2024 was issued inviting bids for the Corporate Debtor on a going concern basis.
4.5 The Applicant submitted the Bid Application Form along with all requisite documents including the profile of the potential bidder and related compliances. Upon verification of these documents, the Applicant was declared as an “Eligible Bidder” in terms of the Auction Process Document. Pursuant thereto, the Applicant deposited an Earnest Money Deposit (EMD) of ₹75,000/- with the Liquidator on 17.10.2024.
4.6 The e-auction was conducted on 25.10.2024. Based on the bidding process and in accordance with the terms of the Auction Process Document, the Applicant was declared as the Successful Bidder for a consideration of ₹23,25,000/-. A Letter of Intent (LoI) was issued in favour of the Applicant by the Liquidator on 26.10.2024.
4.7 Thereafter, the Applicant deposited a further sum of ₹5,06,250/- on 29.10.2024, representing 25% of the sale consideration (inclusive of the EMD already paid), in compliance with the terms of the LoI.
4.8 Subsequently, the Applicant paid the balance sale consideration amounting to ₹17,70,121/- along with interest of ₹26,371/- at the rate of 12% on 09.01.2025, thereby completing the entire payment obligation under the auction process.
4.9 On 10.01.2025, a Sale Certificate was issued by the Liquidator in favour of the Applicant confirming that the Corporate Debtor had been acquired by the Applicant as a going concern (excluding cash and bank balances) in accordance with the provisions of the Code and the auction process.
5. The following judgments would be relevant to quote in reliefs sought for:
a) Janvi Dixit vs. M/s Hi-Tech Services , I.A. No. 741 o f 2021 in C.P. (IB) No. 1319/MB/2017, Hon’ble National Company Law Tribunal, Mumbai Bench, Court No. – I (para. 6) held that extinguishment of past liabilities under a resolution plan does not af
