NCLAT New Delhi: Liquidator Must Follow Clause 12 Of Schedule 1 Of Liquidation Process Regulations, 2016, And Not Lay Its Owns Terms And Conditions In The EOI For Period Of Payment Of Balance Sale...
1 year, 4 months ago

NCLAT New Delhi: Liquidator Must Follow Clause 12 Of Schedule 1 Of Liquidation Process Regulations, 2016, And Not Lay Its Owns Terms And Conditions In The EOI For Period Of Payment Of Balance Sale...

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The National Company Law Appellate Tribunal, Principal Bench, New Delhi comprising of Justice Rakesh Kumar Jain and Naresh Salecha dismissed the appeal filed against the order of the National Company Law Tribunal Kolkata Bench dated 23.02.2023. The Appellate Tribunal held that the Liquidator is required to follow the terms and conditions of Clause 12 of Schedule 1 of the Liquidation Process Regulations, 2016, and cannot lay down its own terms and conditions in the EOI regarding the period for payment of balance sale consideration. The question before the Appellate Tribunal was as to whether the parties are bound by the terms and conditions fixed by the Liquidator in the EOI dated 08.07.2020 or whether the Liquidator was required to follow the terms and conditions of Clause 12 of Schedule 1 of the Regulations which was amended on 25.07.2019. NCLAT Verdict: The NCLAT dismissed the appeal and held that the Liquidator is required to follow the terms and conditions of Clause 12 of Schedule 1 of the Liquidation Process Regulations, 2016, and cannot lay down its own terms and conditions in the EOI regarding the period for payment of balance sale consideration. The Appellate Tribunal observed that the circular dated 26.08.2019 has already been withdrawn and that the amendment dated 25.07.2019 was in vogue as of 08.07.2020, it was incumbent upon the Liquidator to follow the provisions of Regulation 33 much less Schedule 1 of the Regulations which has not been followed and the terms and conditions have been provided by the Liquidator on its own in the EOI overlooking the terms and conditions as envisage in Schedule 1.

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