NCLAT observes that further consideration of the appeal is unnecessary once the Liquidator confirms the payment and distribution.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) was hearing an appeal and observed that once the Liquidator’s affidavit confirmed the payment offer to the Appellant and the distribution of proceeds was finalized, there was no necessity for further consideration of the appeal, leading to its disposal without adjudicating the merits.
An appeal was filed by the Appellant against an order dated 22.04.2024 passed in IA No. 1(AHM) 2024. The appeal sought to challenge several aspects related to the E-Auction Sale Notice dated 08.03.2023 published by the Liquidator. The specific prayers included the setting aside of the E-Auction Sale Notice, the direction to allow the Appellant to realize secured assets as per Section 52(3) of the Code, an extension for payment of costs, a stay on the sale of the Secured Assets, and any other orders deemed fit by the Tribunal.
Appellate Tribunal noted that the sale had already been conducted by the Liquidator. However, the Liquidator was restrained from issuing the sale certificate and distributing the proceeds as per paragraph-20 of the order. The Tribunal decided to issue notice and directed those replies be filed within two weeks, with rejoinders to follow. The appeal was scheduled for further consideration on 10.07.2024. The Tribunal also noted that no further orders were required at that stage due to the existing restraint.
NCLAT was informed by the Counsel for the Appellant of an upcoming application by the Liquidator before the Adjudicating Authority, scheduled for 08.07.2024. The Counsel expressed concerns that the timing of the Adjudicating Authority's application might affect the pending appeal. In response, the Tribunal indicated that the Adjudicating Authority should adjourn the application to a date after 10.07.2024 and scheduled the appeal for 10.07.2024.
When the appeal was reconsidered, the Liquidator’s Counsel submitted that IA No. 965/2024 had been filed in Miscellaneous Application No. 1/2024, proposing the payment of Rs. 39,30,54,422/- to the Appellant from an admitted claim of Rs. 39,55,34,828/-. This payment was to be made from the proceeds of the bid amounting to Rs. 78 Crores.
The application filed by the Liquidator included details of the sale of the Corporate Debtor as a going concern for Rs. 78 Crores. It also outlined the summary of admitted claims and the proposed distribution based on the valuation of fixed assets. The application proposed paying Rs. 49,14,10,420/- from the liquidation proceeds to secured lenders with a security interest over the fixed assets.
Given the Liquidator’s affidavit and the offer to pay the Appellant Rs. 39,30,54,422/-, the Appellate Tribunal concluded that there was no need to address further issues in the appeal. The appeal was disposed of, with the Tribunal clarifying that it had not made any determinations on the merits of the case.
Considering that the Successful Bidder had deposited the requisite amount and the distribution of funds had been finalized, the Appellate Tribunal concluded that the Adjudicating Authority could proceed with issuing the sale certificate.
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