Filing an Appeal for Cancellation of Auction and putting Property for Auction is violative of IBBI (Liquidation Process) Regulations: IBBI [Read Order]
Filing an Appeal for Cancellation of Auction and putting Property for Auction – Filing an Appeal – Appeal – IBBI – IBBI (Liquidation Process) Regulations – Liquidation Process – Cancellation of Auction – Auction – Property – Taxscan
Filing an Appeal for Cancellation of Auction and putting Property for Auction – Filing an Appeal – Appeal – IBBI – IBBI (Liquidation Process) Regulations – Liquidation Process – Cancellation of Auction – Auction – Property – Taxscan
The Insolvency and Bankruptcy Board of India noted that the filing of an appeal for cancellation of the auction and putting the property for auction is violative of Insolvency and Bankruptcy Board of India (IBBI) (Liquidation Process) Regulations.
An application was filed by Aashish Gupta, Resolution Professional (RP) during the Corporate Insolvency Resolution Process (CIRP) stage to cancel the e-auction process for the auctioning of the immovable properties belonging to the promoter of the Corporate Debtor (CD) on which the factory building of the Corporate Debtor was located. The said application was filed by the erstwhile RP against Pegasus Assets Reconstruction Company Private Limited (Pegasus).
As per section 35(1)(k) of the Insolvency and Bankruptcy Code, the liquidator is duty-bound to defend any suit, prosecution or other legal proceedings, civil or criminal, on behalf of the Corporate Debtor and Konduru Prasanth Raju’s conduct of failing to appear and not representing the Corporate Debtor adequately, prejudiced the interests of the Corporate Debtor and its stakeholders.
Konduru Raju submitted after he took charge from the Resolution Professional, it came to his knowledge that an Interlocutory Application titled Base Corporation Limited Vs Pegasus Assets Reconstruction Company Pvt Ltd filed by the Resolution Professional to cancel the e-auction as the sale of the land would diminish the value of the asset of Corporate Debtor and he immediately appointed Neha Shetty, Advocate to represent him.
A Single Member Bench of the comprising Sudhaker Shukla observed that “Konduru Prasanth Raju has contravened sections 35(1)(d), (e) and (k), 208(2)(a) and (e) of the Code, regulations 15, 31A(1)(a), (3), proviso to 31A and 47 of the IBBI (Liquidation Process) Regulations, 2016 (Liquidation Regulations) and regulation 7(2)(a), (h) and (i) of IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) read with Clause 1, 2, 13, 14 and 15 of the Code of Conduct specified thereunder and Circular No. IBBI/IP/013/2018 dated 12.06.2018.”
The Bench further noted that it is evident that the Liquidator has demonstrated a very strange approach devoid of any economic rationale and his efforts do not give the confidence that he was earnestly serious to get it defended as his advocate was absent during material days of proceedings. Again, after getting the adverse judgement on his Interlocutory Application, he had remedial steps at hand to file an appeal with the National Company Law Appellate Tribunal (NCLAT) within the prescribed time period. It is unfathomable why he moved to appeal belatedly.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
