M/S. R.K. INDUSTRIES (UNIT-II) LLP versus M/S. H.R. COMMERCIALS PRIVATE LIMITED AND OTHER

Citation: [2022] 12 S.C.R. 667 · Decided: 26-08-2022 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Disposed off

Cited by 1 judgment(s) · cites 14 · see the full citation network in Lexace

Judgment (excerpt)

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   [2022] 12 S.C.R. 667
667
M/S. R.K. INDUSTRIES (UNIT-II) LLP
v.
M/S. H.R. COMMERCIALS PRIVATE LIMITED AND OTHER
(Civil Appeal No. 7722 of 2021)
AUGUST 26, 2022
[N. V. RAMANA, CJI, J.K. MAHESHWARI AND
HIMA KOHLI, JJ.]
Insolvency and Bankruptcy Code, 2016 – ss.7, 33, 34, 35,
61 – Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016 – r.4 – Insolvency and Bankruptcy Board of
India (Liquidation Process) Regulations, 2016 – Regulations 8, 31A,
32, 33, 33(2)(d), Schedule-I u/Regulation 33 – Gujarat Maritime
Board (GMB) leased out a parcel of land to Corporate Debtor for
a period of thirty years – ICICI Bank Ltd. moved an application for
initiation of Corporate Insolvency Resolution Process (CIRP) against
the Corporate Debtor – Interim Resolution Professional (IRP) was
appointed – Application moved by the IRP for initiating liquidation
proceedings – Adjudicating Authority (NCLT) ordered liquidation
of the Corporate Debtor and appointed Respondent No.2 as the
Liquidator – Five e-auctions were conducted by the respondent No.2
to sell the consolidated assets of the Corporate Debtor but first
four were unsuccessful – In the fifth e-auction, respondent No.2
offered sale of the assets on a stand-alone basis or singly or in
smaller lots, besides compositely – Except for the sale of two
residential assets, no purchasers stepped forward to purchase the
other assets – Respondent no. 2 moved an application before NCLT
for permission to sell the assets of the Corporate Debtor through
Private Sale, allowed – The Swiss Challenge Process was adopted
for sale of the assets of the Corporate Debtor through Private Sale
– The first Swiss Challenge Process was unsuccessful – In the
second round, as against the base price of ` 460 crores fixed for
the Dahej Material and scrap, the appellant made a bid of ` 431
crores that was accepted – Thereafter, the respondent No.2 published
an advertisement inviting bidders to submit their bids against the
Anchor Bid in response whereto, the appellant, respondents No.3,
4, 5, and 6 submitted their bids, but before the process could be
taken further, on an application moved by the respondent No.1,
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SUPREME COURT REPORTS
[2022] 12 S.C.R.
NCLT passed an order directing the respondent No.2 to carry
forward the stage upto announcement of the highest bidder, while
deferring the rest of the process – Matter pending before the NCLT,
the respondent No.2 was approached by the respondent No.7, who
evinced interest in purchasing the immovable and movable assets
of the Corporate Debtor – NCLT was approached for permission to
undertake a composite sale of the Dahej Material and the Shipyard,
which was duly granted – Challenged by appellant beforeNCLAT,
dismissed – However, modifying the said order,the NCLAT directed
respondent no. 2 to restart the entire process of Private Sale after
issuing an open notice to prospective buyers instead of confining
the process to those parties who had participated in the process
earlier – On appeal, held: Merely because the appellant had
submitted a bid under the Anchor Bid Document and was declared
as the Anchor Bidder in the Second Swiss Challenge Process, could
not vest a right on it for it to insist that the said process must be
taken to its logical conclusion – Given the terms and condition of
the Anchor Bid Document and the Second Swiss Challenge Process
Document, read collectively with the unqualified undertaking given
by the appellant acknowledging that the respondent No.2 was well
empowered to cancel/modify or even abandon the said process, it
does not lie in the mouth of the appellant to urge that once it was set
into motion, there was no justification to discontinue the Second
Swiss Challenge Process – Decision taken by the respondent No.2
cannot be treated as arbitrary, capricious or unreasonable for
interference by this Court  – The said decision is tempered with
sound reason and logic – It is a purely commercial decision centered
on the best interest of the stakeholders – The stakeholders having
unanimously endorsed the view of the respondent No.2, it is not for
Supreme Court to undertake a further scrutiny of the desirability
or the reasonableness of the said decision or substitute the same
with its own views – Impugned judgment passed by NCLAT to the
extent that it modified the order passed by the NCLT and directed
restraining of the Private Sale Process, is quashed and set aside.
Insolvency and Bankruptcy 

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