)AUGUST 26 v. RAMANA

ABCDEFGH671permission for such a sale. The proviso appended to Regulation33(2) of the Liquidation Regulations places yet another embargoto the effect that when the Liquidator intends to sell the assets ofthe Corporate Debtor by way of a Private Sale to a related partyof the Corporate Debtor, his relative party or any professionalappointed by him, it is mandatory to obtain prior permission ofthe Adjudicating Authority (NCLT). Even the mode of sale hasbeen regulated under the Liquidation Regulations for both, apublic auction and a Private Sale. All the above dos and don’tshave been inserted to protect the assets of the Corporate Debtorand safeguard the interest of the stakeholders. [Para 40][705-B-F]1.3 A bare perusal of the clauses of the Anchor BidDocument and the Second Swiss Challenge Process Document, leave no manner of doubt that the prospective bidders wereinformed that the Liquidator had reserved the right to abandon/cancel/terminate/waive the said process and/or part thereof atany stage; that issuance of the Anchor Bid Document did notcreate any binding obligations on the Liquidator to proceed withthe sale of the assets of the Corporate Debtor; that the AnchorBid Document did not constitute an offer/commitment or anassurance of the Liquidator. Identical rights were reserved withthe Liquidator even in the Second Swiss Challenge ProcessDocument. In fact, as noted above, Schedule IV goes a step furtherand entitles the Liquidator to include a bidder to participate inthe sale process at any stage. He could even decide to sell thecomposite assets of the Corporate Debtor during the said process.[Para 47][709-D-F]1.4 Merely because the appellant herein had submitted abid under the Anchor Bid Document and was declared as theAnchor Bidder in the Second Swiss Challenge Process, couldnot vest a right on it for it to insist that the said process must betaken to its logical conclusion. The appellant has been harpingabout the vested right that had allegedly accrued in its favour onbeing declared as the Anchor Bidder. But it has convenientlyglossed over an affidavit dated 23rd March, 2021 filed by it, undertaking inter alia that it would remain unconditionally andirrevocably bound by the Swiss Challenge Process Document andM/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED ABCDEFGH672SUPREME COURT REPORTS[2022] 12 S.C.R.the decision of the respondent No.2 Liquidator. Given theaforesaid terms and condition of the Anchor Bid Document andthe Second Swiss Challenge Process Document, read collectivelywith the unqualified undertaking given by the appellantacknowledging that the respondent No.2 – Liquidator was wellempowered to cancel/modify or even abandon the said process, it does not lie in the mouth of the appellant to urge that once itwas set into motion, there was no justification to discontinue theSecond Swiss Challenge Process. No special rights came to bebestowed on the appellant as the Anchor Bidder for it to insistthat the said process ought to be taken forward and concluded, irrespective of the subsequent decision taken by the respondentNo.2 – Liquidator, backed to the hilt by the stakeholders ofdiscontinuing the Swiss Challenge Process and opting for PrivateSale of the consolidated assets of the Corporate Debtor to beconducted through direct negotiations. An Anchor Bidder has novested right beyond the ROFR, being the origination of theproposal. It must be borne in mind that the Swiss ChallengeProcess is just another method of private participation that hasbeen recognized by this Court for its transparency. Ultimately, the IBC has left it to the discretion of the Liquidator to explorethe best possible method for selling the assets of the CorporateDebtor in liquidation, which includes Private Sale through directnegotiations with the object of maximizing the value of the assetsoffered for sale. [Paras 48, 49][709-G-H; 710-A-E]Ravi Development v. Krishna Parishthan& Others(2009) 7 SCC 462 : [2009] 8 SCR 654 – referred to.1.5 It is not for the court to question the judiciousness ofthe decision taken by the respondent No.2 – Liquidator with theidea of enhancing the value of the assets of the Corporate Debtorbeing put up for sale. The right to refuse the highest bid orcompletely abandon or cancel the bidding process was availableto the respondent No.2 – Liquidator. The appellant has not beenable to demonstrate that the decision of the respondent No.2 –Liquidator to discontinue the Second Swiss Challenge Processand go in for a Private Sale through direction negotiations withprospective bidders was a malafide exercise. [Para 52][711-E-F] ABCDEFGH673State of Madhya Pradesh and Others v. Nandlal Jaiswaland Others (1986) 4 SCC 566 : [1987] 1 SCR 1; 5 M& T Consultants, Secunderabad v. S.Y. Nawab andAnother (2003) 8 SCC 100: [2003] 4 Suppl. SCR 187;State of Jharkhand and Others v. CWE-SomaConsortium (2016) 14 SCC 172: [2016] 4 SCR 157;Laxmikant and Others v. Satyawan and Others (1996)4 SCC 208 : [1996] 3 SCR 532; Montecarlo Limited v.National Thermal Power Corporation Limited (2016)15 SCC 272 : [ 2016] 8 SCR 224 – relied on.1.6 The Statute enjoins the Liquidator to sell the immovableand movable assets of the Corporate Debtor in a manner thatwould result in maximization of value, lead to a higher and quickerrecovery for the stakeholders, cut short the delay and afford aguaranteed timeline for completion of the process. On examiningthe records, it is found that these were the considerations thathave weighed not only with the respondent No.2 – Liquidator, but also with the stakeholders, who were unanimous in theirdecision that the Second Swiss Challenge Process Documentought to be abandoned in favour of the Private Sale process wherenot only the appellant, but all the other prospective bidders whohad participated in the process were permitted by the AdjudicatingAuthority (NCLT) to make a bid in respect of the consolidatedassets of the Corporate Debtor. In its anxiety to claim a vestedright as an Anchor Bidder, the appellant tends to forget that theSwiss Challenge Process adopted by the respondent No.2 –Liquidator also falls in the category of a Private Sale, referred toin Schedule-I(2) under Regulation 33 of the LiquidationRegulations. For conducting a Private Sale, all that the Liquidatoris required to do is to prepare a strategy to approach theinterested parties. He is authorized to directly liaise with thepotential buyers to ensure that realization from the sale of theassets can be maximized. No infirmity in the said approach adoptedby the respondent No.2 – Liquidator. When compared to theabove protracted process, a single buyer for the Dahej land alongwith the metal scrap, etc., lying at the complex was bound tospeed up the entire process inasmuch as the successful biddercould be handed over the possession straightaway and theM/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED ABCDEFGH674SUPREME COURT REPORTS[2022] 12 S.C.R.respondent No.2 - Liquidator would be in a position to receivethe payment for the composite assets in a timebound mannerwith a higher rate of recovery. All these factors that fall in therealm of commercial considerations were examined holisticallyby the respondent No.2 – Liquidator who then placed the cardsbefore the stakeholders in the meeting conducted on 6th August,2021. Even though the provisions of the IBC empower theLiquidator to take an independent decision for the sale of theassets of the Corporate Debtor in liquidation, it can be seen thathe has taken the stakeholders into confidence at every step. Onlyafter finding them to be in agreement with the option sought tobe explored by him of halting the Second Swiss Challenge Processand proceeding with the Private Sale of the consolidated assetsof the Corporate Debtor by directly liaising with the potentialbuyers, did the respondent No.2 – Liquidator take such a decisionsolely with the object of augmenting realization from the sale ofthe assets. Thereafter, the matter was taken to the AdjudicatingAuthority (NCLT) for necessary permissions under Section 35(1)of the IBC that was duly granted. The decision taken by therespondent No.2 – Liquidator cannot be treated as arbitrary, capricious or unreasonable for interference by this Court. Thesaid decision is tempered with sound reason and logic. It is apurely commercial decision centered on the best interest of thestakeholders. The stakeholders having unanimously endorsedthe view of the respondent No.2 – Liquidator, it is not for thisCourt to undertake a further scrutiny of the desirability or thereasonableness of the said decision or substitute the same withits own views. [Paras 56, 57][715-F-H; 716-A-D]1.7 Therefore, the view expressed by the NCLAT that thedecision of the respondent No.2 – Liquidator was driven by thedesire of the stakeholders to complete the liquidation process inthe shortest possible time is concurred with. The aforesaidexercise of selling the assets of the Corporate Debtor has beenongoing for about three years, with several litigations spewedthroughout to cause further delay. The sooner the curtains aredrawn on the process, the better it would be for all concerned. Itis for the very same reason that this Court is inclined to set asidethe subsequent directions issued by the NCLAT of restarting ABCDEFGH675the entire process of Private Sale by issuing fresh notices to allthe prospective buyers without limiting them to those who hadparticipated in the process. No doubt, a public auction entails theprocedure of issuing public notices. But that is not the case witha Private Sale where the procedure prescribed permits theLiquidator to directly liaise with the potential buyer and conductthe negotiations. It may be emphasized that these are commercialtransactions and purely business driven decisions, which are notamenable to judicial review. The insolvency regime introducedunder the IBC has placed fetters on the power of interference bythe Adjudicating Authority (NCLT) and the Appellant Authority(NCLAT). The decision of the NCLT to have the sale of thecomposite assets negotiated with the parties who had participatedin the earlier rounds of sale, cannot be described as a rusheddecision for the NCLAT to have modified the said order and directthat the clock be set back to the initial stage of issuing notices tothe prospective buyers. No such relief was sought by any of theparties to the lis, nor has the NCLAT given any plausible reasonfor issuing such a direction. [Paras 58, 59][716-D-H; 717-A-B]1.8 The powers vested in and the duties cast upon theLiquidator have been made subject to the directions of theAdjudication Authority (NCLT) under Section 35 of the IBC. Oncethe Liquidator applies to the Adjudicating Authority (NCLT) forappropriate orders/directions, including the decision to sell themovable and immovable assets ofthe Corporate Debtor inliquidation by adopting a particular mode of sale and theAdjudicating Authority (NCLT) grants approval to such a decision, there is no provision in the IBC that empowers the AppellateAuthority (NCLAT) to suo motu conduct a judicial review of thesaid decision. The jurisdiction bestowed upon the AdjudicatingAuthority [NCLT] and the Appellate Authority [NCLAT] arecircumscribed by the provisions of the IBC, they cannot act as aCourt of equity or exercise plenary powers to unilaterally reversethe decision of the Liquidator based on commercial wisdom andsupported by the stakeholders. In fact, it has been brought tonotice by the respondent No.2 – Liquidator that close on theheels of the impugned judgment passed by the NCLAT deliveredon 10th December, 2021, the Core Committee of FinancialM/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED ABCDEFGH676SUPREME COURT REPORTS[2022] 12 S.C.R.Creditors of the Corporate Debtor had conducted a meeting on15th December, 2021 and had unanimously ratified the view ofthe respondent No.2 – Liquidator that the bid process commencedon 24th August, 2021, ought to be continued and not restartedhaving regard to the fact that it had taken almost three years tofind such buyers and the sale was at the cusp of being closed. Itwas also recorded in the minutes of the meeting that severalattempts had already been made to solicit interest from partiesbut none had come forward to make an offer for the compositepurchase of the assets. The Core Committee constitutes 70.3%of the financial creditors and when they have weighed in to supportthe stand taken by the respondent No.2 – Liquidator to continuethe bid process commenced on 24th August, 2021, there is noreason to foist the view of the NCLAT on the respondent No.2 –Liquidator that he ought to restart the process for sale of thecomposite assets of the Corporate Debtor from the scratch afterissuing an open notice to the prospective buyers. [Paras 60,61][717-B-E; 718-B-E]Committee of Creditors of Essar Steel India Limited v.Satish Kumar Gupta and Others (2020) 8 SCC 531 :[2019] 16 SCR 275 – relied on.K. Sashidhar v. Indian Overseas Bank and Others(2019) 12 SCC 150: [2019] 3 SCR 845; Committee ofCreditors of Amtek Auto Limited v. Dinkar T.Venkatasubramanian and Others (2021) 4 SCC 457 :2021 (3) JT 110; Kalpraj Dharamshi and Another v.Kotak Investment Advisors Limited and Another. (2021)10 SCC 401 : 2021 (4 ) JT 128; Ghanashyam MishraAnd Sons Private Limited through the AuthorizedSignatory v. Edelweiss Asset Reconstruction CompanyLimited through the Director and Others (2021) 9 SCC657 – referred to.1.9 Therefore, the impugned judgment dated 10thDecember, 2021, passed by NCLAT to the extent that it hasmodified the order dated 16th August, 2021 passed by the NCLTand directed restraining of the Private Sale Process, is quashedand set aside. The Private Sale process of the composite assets ABCDEFGH677of the Corporate Debtor should be taken further by therespondent No.2 – Liquidator without losing any further time andbe concluded at the earliest. All the eligible bidders who havemade Earnest Money Deposits would be entitled to participatein the negotiations to be conducted by the respondent No.2–Liquidator for privately selling the consolidated assets of theCorporate Debtor. Accordingly, it is directed that the process ofprivate negotiations that had commenced on 24th August, 2021,shall be taken to its logical end and brought to a closure by therespondent No.2 – Liquidator within four weeks from the date ofpassing of this order. [Para 62][718-F-H; 719-A]Tata Cellular v. Union of India (1994) 6 SCC 651:[1994] 2 Suppl. SCR 122; Air India v. CochinInternational Airport Limited and Others (2000) 2 SCC617 : [2000] 1 SCR 505; Agmatel India Private Limitedv. Resources Telecom and Others (2022) 5 SCC 362:2022 (2) SCALE 554; Swiss Ribbons Private Limitedand Another v. Union of India and Others (2019) 4SCC 17 : [2019] 3 SCR 535; EBIX Singapore PrivateLimited v. Committee of Creditors of Educomp SolutionsLimited and Another (2022) 2 SCC 401; JaypeeKensington Boulevard Apartments Welfare Associationand Others v. NBCC (India) Limited and Others (2022)1 SCC 401 : 2021 (5) SCALE 142; InnovativeIndustries Limited v. ICICI Bank and another (2018) 1SCC 407 : [2017] 8 SCR 33; Arcelormittal India PrivateLimited v. Satish Kumar Gupta and Others (2019) 2 SCC1 : [2018] 12 SCR 362; Sterling Computers Limited v.M/s M & N Publications Limited and Others (1993) 1SCC 445 : [1993] 1 SCR 81; Mauleshwar Mani andOthers v. Jagdish Prasad and Others (2002) 2 SCC468 : [2002] 1 SCR 423; B.S.N. Joshi & Sons Limitedv. Nair Coal Services Limited and Others (2006) 11 SCC548 : [2006] 8 Suppl. SCR 11; Jagdish Mandal v. Stateof Orissa and Others (2007) 14 SCC 517; AfconsInfrastructure Limited v. Nagpur Metro Rail CorporationLimited and Another (2016) 16 SCC 818 : [2016] 3SCR 551 – referred to.M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED ABCDEFGH678SUPREME COURT REPORTS[2022] 12 S.C.R.Case Law Reference[2009] 8 SCR 654referred toPara 11[1996] 3 SCR 532referred toPara 16[2016] 4 SCR 157relied onPara 16[1994] 2 Suppl. SCR 122referred toPara 17[2000] 1 SCR 505referred toPara 17[2016] 8 SCR 224relied onPara 17[2019] 3 SCR 535referred toPara 20[2017] 8 SCR 33referred toPara 25[2018] 12 SCR 362referred toPara 34[1987] 1 SCR 1relied onPara 52[2003] 4 Suppl. SCR 187relied onPara 52[1993] 1 SCR 81referred toPara 55[2002] 1 SCR 423referred toPara 55[2006] 8 Suppl. SCR 11referred toPara 55[2016] 3 SCR 551referred toPara 55[2019] 16 SCR 275referred toPara 60[2019] 3 SCR 845referred toPara 60CIVIL APPELLATE JURISDICTION : Civil Appeal No.7722of 2021.From the Judgment and Order dated 22.11.2021 of the NationalCompany Law Appellate Tribunal, New Delhi in Company Appeal (AT)(Insolvency) No.236 of 2021.WithCivil Appeal No. 7731 of 2021.Tushar Mehta, SG, K.M. Nataraj, ASG, Dr. Abhishek ManuSinghvi, Gaurav Mitra, Arvind Datar, Jay Savla, Mukul Rohatgi, Siddhartha Dave, Vikram Nankani, Sr.Advs., Sameer Pandit, Aman RajGandhi, Parthasarathy Bose, Anuj Jain, Aditya Ladha, Ananya PratapSingh, Azeem Samuel, Nidhiram, Akash Kakade, Gurdeep Singh Sachar, Vikrant Shetty, Shriya Ray Chaudhary, Swetab Kumar, SomanathaPadhan, Abhishek Sharma, Ms. Ashly Cherian, Gaurav Arora, KamlendraSingh, Ms. Renuka, Ms. Renuka Sahu, Alok Tripathi, Rupesh Kumar, ABCDEFGH679Kannu Agarwal, Mayank Pandey, Mukesh Kumar Maroria, Shiv MangalSharma, Saurabh Rajpal, Ms. Shrinjan Khosla for M/S. Aura & Co.,Jasdeep Singh Dhillon, Salil Thakore, Prabhay Chaurasia, Rahul Gupta, Ms. R. Nair, Gaurav Mathur, Ms. Anushree Prashit Kapadia, AbhishekShah, Ms. Priyanka Rathi, Shashank Khurana, M/S. Cyril AmarchandMangaldas, Advs. for the appearing parties. The Judgment of the Court was delivered byHIMA KOHLI, J.1. By this common judgment, we propose to decide both theappeals one filed by M/s. R.K. Industries (Unit-II) LLP (appellant inCivil Appeal No.7722 of 2021 and respondent No.1 in Civil AppealNo.7731 of 2021) and Welspun Steel Resources Private Limited1(appellant in Civil Appeal No.7731 of 2021 and respondent No.7 in AppealNo.7722/2021) against the judgment dated 10th December, 2021 passedby the Appellate Authority, National Company Law Appellate Tribunal, Principal Bench, New Delhi2 in Company Appeal (AT) (Ins.) No. 690 of2021 filed by R.K. Industries under Section 61 of the Insolvency andBankruptcy Code, 20163, assailing the order dated 16th August, 2021passed by the Adjudicating Authority, (National Company Law Tribunal, Ahmedabad)4 in Interlocutory Application No.273 of 2021 (filed by therespondent No.1 - H.R. Commercial Private Limited, in IA No.698 of2020 (filed by Liquidator) in Company Petition (IB) No.53 of 2017. Forthe sake of convenience, we propose to refer to the facts narrated inCivil Appeal No.7722 of 2021.FACTS OF THE CASE2. The facts of the case necessary to decide the present appealsare as follows.2.1 Vide Agreement dated 26th February, 2008, Gujarat MaritimeBoard5 leased out a parcel of land to ABG Shipyard Limited6 for a periodof thirty years. On 1st August, 2017, ICICI Bank Limited moved anapplication for initiation of Corporate Insolvency Resolution Process71 For short ‘Welspun’2 For short ‘NCLAT’3 For short ‘IBC’4 For short ‘NCLT’5 For short ‘GMB’6 For short ‘Corporate Debtor’7 For short ‘CIRP’M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED ABCDEFGH680SUPREME COURT REPORTS[2022] 12 S.C.R.against the Corporate Debtor under Section 7 of the IBC read with Rule4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)Rules8, 2016 before the Adjudicating Authority, NCLT, Ahmedabad[CP(IB) No.53/NCLT/AHM/2017] wherein, Mr. Sundaresh Bhat wasappointed as an Interim Resolution Professional9. As no Resolution Planwas approved during the CIRP, an application was moved by the IRPfor initiating liquidation proceedings. Vide order dated 25th April, 2019,the Adjudicating Authority ordered liquidation of the Corporate Debtorand appointed Mr. Sundaresh Bhat as the Liquidator. The respondentNo.2 - Liquidator made efforts to sell the assets of the Corporate Debtorthrough an e-auction process, as contemplated in Sections 33 and 35 ofthe IBC read with Schedule-I of the Insolvency and Bankruptcy Boardof India (Liquidation Process) Regulations, 201610. Five e-auctions wereconducted by the respondent No.2 - Liquidator to sell the consolidatedassets of the Corporate Debtor on 17th September, 2019; 27th September,2019; 22nd October, 2019; 11th November, 2019 and 5th August, 2020.When the first four e-auctions were unsuccessful, in the fifth e-auction, the respondent No.2 - Liquidator offered sale of the assets on a stand-alone basis or singly or in smaller lots, besides compositely. Except forthe sale of two residential assets, no purchasers stepped forward topurchase the other assets.2.2. Faced with the above situation, the respondent No.2 -Liquidator moved an application (IA No.698 of 2020) before the NCLTfor permission to sell the assets of the Corporate Debtor through PrivateSale, in terms of Regulation 33(2)(d) of the Liquidation Regulations, whichwas duly allowed. On receiving offers from potential buyers, therespondent No.2 - Liquidator approached the Stakeholders, who in theMeeting conducted on 28th January, 2021, took a decision to go in for thesale of the Dahej Material and Scrap11 at amounts higher than the reserveprice of the Dahej Material fixed at ` 516 crores in the fifth round of thee-auction. The Stakeholders’ Consultative Committee12 resolved thatthe prospective bidders, who proposed to participate in the Private Sale, ought to be encouraged to participate in the Swiss Challenge Process.As a result, the Swiss Challenge Process was adopted for sale of theassets of the Corporate Debtor through Private Sale.8 For short ‘IBC Rules’9 For short ‘IRP’10 For short ‘Liquidation Regulations’11 For short ‘Dahej Material’12 For short ‘SCC’ ABCDEFGH6812.3. The first Swiss Challenge Process that commenced on 12thMarch, 2021, was unsuccessful as the highest offeror failed to depositthe earnest money amount of 10% of the reserve price. The SCC decidedto conduct a second Swiss Challenge Process at a base price of ` 460crores (being lower than the earlier calculated reserve price of ` 516crores) as some assets from the Dahej Material were kept reserved fora potential buyer. The second Swiss Challenge Process was initiated on22nd March, 2021 and at the Anchor Bid stage, the respondent No.2 -Liquidator received bids from R.K. Industries, appellant in Civil AppealNo.7731/2021-, respondent No.4 - V.K. Industrial Corporation Limitedand respondent No.5 – M/s Ankit International.2.4. On 23rd March, 2021, the appellant submitted its bid of ` 431crores along with Expression of Interest and deposited a sum of ` 1.00crore in terms of the bid requirement. Though the last date for submittingthe Earnest Money Deposit13 in terms of the Process Document was as24th March, 2021, the appellant deposited the EMD of ` 43.10 croreswith the respondent No.2 – Liquidator for selection as an Anchor Bidderon 26th March, 2021 along with an affidavit stating inter alia that itagreed to be bound by the terms of the Swiss Challenge Process.2.5. The second stage of the Swiss Challenge Process commencedon 27th March, 2021 when the respondent No.2 - Liquidator publishedan advertisement inviting bidders to participate in the Swiss ChallengeProcess and submit their bids against the Anchor Bid. In response thereto, the appellant, respondents No.1, 3, 4, 5 and 6 submitted their bids. On2nd April, 2021, the respondent No.1 – HR Commercials Private Limitedproposed to bid in a consortium comprising of itself and the respondentsNo.3 to 6. The said consortium also submitted an EMD in the secondstage of the Swiss Challenge Process.COMMENCEMENT OF LITIGATIONORDER OF THE ADJUDICATING AUTHORITY (NCLT)3. On 6th April, 2021, respondent No.1 – HR Commercials PrivateLimited filed an application before the Adjudicating Authority (NCLT),being IA No.273 of 2021, challenging the bid process in the second SwissChallenge Process wherein, the appellant was selected as the AnchorBidder. The NCLT passed an interim order on the aforesaid applicationon 7th April, 2021 directing the respondent No.2 - Liquidator to complete13 For short ‘EMD’M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH682SUPREME COURT REPORTS[2022] 12 S.C.R.the second Swiss Challenge Process only upto the stage of announcementof the highest bidder and for deferring the rest of the process to a dateafter 12th April, 2021. The said interim order dated 7th April, 2021 wassubsequently extended by the NCLT on 27th April, 2021 and 3rd May,2021.4. Aggrieved by the aforesaid orders, the appellant – R.K.Industries filed an appeal before the Appellate Authority/NCLAT, whichwas disposed of, vide order dated 18th June, 2021 with a direction issuedto the NCLT to expeditiously decide IA No.273 of 2021, moved by therespondent No.1 – HR Commercials Private Limited. [In the meantime, respondent No.7 – Welspun sent an e-mail dated 19th May, 2021 to therespondent No.2 – Liquidator expressing its interest in the Dahej Materialas well as the land that was leased out by GMB to the Corporate Debtor].A series of e-mails were exchanged between the respondent No.2–Liquidator and the respondent No.7–Welspun on its offer to acquire theconsolidated assets of the Corporate Debtor at a price of ` 627.50 crores. When the request of the respondent No.7–Welspun for permission toinspect the Dahej Material at the site was turned down by the respondentNo.2 - Liquidator on the ground that the matter was sub judice and thematerial was not available for bidding, it filed an application before theNCLT (IA No.445 of 2021) for issuing directions to the respondent No.2– Liquidator to consider and accept its offer for buying the consolidatedassets of the Corporate Debtor. Around the same time, the respondentNo.8 – Kanter Steel India Private Limited also moved an application(IA No.379 of 2021) before the NCLT for quashing of the second SwissChallenge Process.5. On 5th July, 2021, the NCLT directed the respondent No.2 –Liquidator to permit the respondent No.7 – Welspun to inspect the assetsof the Corporate Debtor. After the said inspection, vide letter dated 2ndAugust, 2021, the respondent No.7 – Welspun hiked its offer for theconsolidated assets from ` 627.50 crores to ` 650 crores on an ‘as iswhere is basis’; ‘as is what is basis’ and ‘wherever there is basis’.6. On 6th August, 2021, a Meeting of the SCC was convenedwherein, the respondent No.2– Liquidator appraised the stakeholders ofthe further developments that had taken place and the offer letter dated2nd August, 2021 issued by the respondent No.7–Welspun bidding forthe consolidated assets of the Corporate Debtor. The SCC advised therespondent No.2–Liquidator to place the relevant facts and the bid ABCDEFGH683received from the respondent No.7–Welspun before the NCLT. It is thestand of the respondent No.2–Liquidator that in the hearing conductedon 9th August, 2021, the NCLT had orally directed him to place the offermade by the respondent No.7-Welspun before the stakeholders.7. Pursuant to the aforesaid direction, a Meeting of the SCC wasconducted on 13th August, 2021 and it was decided that it would bebeneficial if the Dahej Material and the Shipyard are sold as compositeassets to maximize realization to the stakeholders in the shortest possibletime and for quick disposal of the assets. In other words, the stakeholderswere of the view that a composite sale of the Dahej Material and theShipyard would be more beneficial vis-à-vis the sale of the Dahej Materialalone, subject matter of the second Swiss Challenge Process.8. On 16th August, 2021, the respondent No.7–Welspun sent an e-mail to the respondent No.2–Liquidator once again increasing its offerfor the consolidated assets of the Corporate Debtor from ` 650 croresto ` 675 crores. It also offered to pay a sum of ` 67.50 crores as EMDwith an assurance that full payment would be made on or before 30thSeptember, 2021. On the very same day, when the matter was listedbefore the NCLT, the respondent No.2–Liquidator apprised the NCLTof the recommendations made by the SCC for entertaining theconsolidated offer received from the respondent No.7–Welspun. Notingthe aforesaid submission that removal of the Dahej Material will takeupto 15 to 20 months and only thereafter, could the process for conductingsale of the land be undertaken, which would further delay the entireliquidation process and having regard to the view of the stakeholdersthat consolidated sale of all the assets of the Corporate Debtor at one gowill save time and maximize the value to the stakeholders, the NCLTpassed an order on 16th August, 2021, permitting the respondent No.2–Liquidator to go in for Private Sale of all the assets of the CorporateDebtor and complete the entire sale process in consultation with theSCC within a period of three weeks. The respondent No.2–Liquidatorwas also directed to permit all the parties before the NCLT to participatein the bidding process.ORDER OF THE APPELLATE AUTHORITY (NCLAT)9. It was the aforesaid order that was challenged by the appellant–R.K. Industries before the NCLAT, which has been dismissed, by theimpugned judgment dated 10th December, 2021. However, the NCLAThas gone on to modify the order dated 16th August, 2021 passed by theM/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH684SUPREME COURT REPORTS[2022] 12 S.C.R.NCLT directing the respondent No.2–Liquidator to complete the entireprivate sale within three weeks in the following manner :“39. It is clear from the ratio of the above mentioned judgmentsthat the specific context in which an auction is carried out canonly elucidate the aspect of arbitrariness and favouritism orotherwise. Thus, in the present appeal where the Impugned Orderchallenging the stoppage of second Swiss Challenge Process andtaking up a fresh private sale process has been challenged, it isseen that the decision of the stakeholders and the liquidator, uponwhich the Adjudicating Authority has based its order does notgrant any particular party any favour. It is driven by thestakeholders’ wish to get the liquidation process concluded earlywithout losing sight of maximization of value of assets. Also, eventhough this is a private sale as opposed to sale by agovernment authority, we are of the opinion that thestandards and norms of transparency, fairness andresponsibility should be adopted without any qualificationor reservation and all prospective bidders should getsufficient notice and time to enable them to participate inthe bidding in an effective manner. The process should betaken up after proper notice to prospective buyers and notlimited to chosen few.40. The impugned order directs the Liquidator to complete theentire private sale (relating to the assets contained in the WSRPLoffer) within three weeks from the date of Adjudicating Authority’sorder. It additionally directs the Liquidator to allow the partieswho are involved in the hearing of CP(IB) No. 53 of. 2017 andrelated IAs to participate in the sale process. We are of theopinion that rushing into the sale of composite assets withonly such parties participating who had earlier not evincedkeen interest in the five failed rounds of e-auction may notachieve the value maximization objective. The processshould be restarted with adequate preparation and aftergiving open notice to prospective buyers. We also hopeliquidator will take steps to initiate and complete the sale processin accordance with the provisions of IBC and LiquidationRegulations without any favouritism and bias and with transparencyand fairness. ABCDEFGH68541. In view of the above discussion, we direct, in partialmodification of the impugned order, that while the secondSwiss Challenge Process stands cancelled, the private saleprocess should be undertaken in accordance with thedirections contained in the preceding paragraph of thisjudgment as per relevant legal provisions.”(emphasis added)THE APPEAL10. It is the aforesaid order that has brought the appellant - R.K.Industries to this Court with a grievance that there was no good reasonfor the NCLAT to have permitted the procedure of Private Sale of thecomposite assets of the Corporate Debtor instead of taking the SecondSwiss Challenge Process to its logical conclusion. As regards Welspun, respondent No.7 in Civil Appeal No. 7722 of 2021 and the appellant inCivil Appeal No. 7731 of 2021, the limited grievance raised is with regardto the directions issued in the penultimate paragraphs of impugnedjudgment of restarting the process of Private Sale after issuing an opennotice to all prospective buyers instead of confining the same to theparties who had earlier participated in the process.SUBMISSIONS OF THE APPELLANT – R.K. INDUSTRIES11. Arguing on behalf of the appellant–R.K. Industries, Mr. GauravMitra, learned Senior counsel submitted that the NCLAT has erred inupholding the order of NCLT of going in for Private Sale of the compositeassets of the Corporate Debtor inasmuch as there were no takers forthe same at the announced reserve price in five rounds of e-auctionconducted earlier by the respondent No.2–Liquidator. Contending thatwhen there are no allegations or observations made in the impugnedorder that the Swiss Process challenge was irregular or improper, therewas no justification for interfering with the said process that had alreadybeen set into motion for a second time in March, 2021 wherein the appellantwas declared as the Anchor Bidder thereby giving it a Right of FirstRefusal14 in respect of the Dahej Material. Finding fault with theobservations made in the impugned order that the views of thestakeholders regarding the sale of assets are significant as they are theultimate beneficiaries of the liquidation process and a substantial period14 For short ‘ROFR’M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH686SUPREME COURT REPORTS[2022] 12 S.C.R.of time had already been spent in the liquidation process without anyfruitful results, it was submitted on behalf of the appellant that theaforesaid observations run contrary to Regulation 31-A of the LiquidationRegulations and Section 35(2) of the IBC that state in clear terms thatthe views of the SCC are not binding on the Liquidator. It was urged thatthe NCLT and the NCLAT ought not to have permitted the respondentNo.2-Liquidator to terminate the Swiss Challenge Process when it wasat the final stage as the said termination will lead to a further delay andhuge financial losses for all the concerned parties. In support of thesubmission that sale through the Swiss Challenge Process has beenrecognized by courts as a fruitful method of maximisation of value, reliance has been placed on Ravi Development v. Krishna Parishthan& Others15.12. It was next submitted by learned counsel for the appellantthat the respondent No.20-Liquidator having failed to succeed in the e-auction process that was undertaken by him on five occasions, he hadhimself supported the Swiss Challenge Process for liquidating the assetsof the Corporate Debtor and therefore, he could not have been permittedto drop the said process halfway through and approach the NCLT forseeking permission to conduct a Private Sale of the composite assets ofthe Corporate Debtor. It was contended that the NCLAT has failed toappreciate that the respondent No.7-Welspun too had all the opportunityto participate in the previous e-auctions conducted by the respondentNo.2-Liquidator as also in the Second Swiss Challenge Process in respectof the Dahej Material and having elected not to do so, its first offermade as late as on 19th May, 2021, culminating in the final offer made on16th August, 2021, ought not have been entertained.SUBMISSIONS OF THE RESPONDENT NO.2 – LIQUIDATOR13. The conduct of the respondent No.2 - Liquidator has alsobeen questioned by the appellant on the ground that initially he hadrepeatedly refused to entertain the offers made by the respondent No.7-Welspun, but later on, did a complete ‘U’ turn in the attempt to transferthe composite assets of the Corporate Debtor to the said respondentand towards this aim, has tailor-made the Bid Documents to favour therespondent No.7. It was argued that simply because Clause 11.6 of theterms of the Second Swiss Challenge Process entitles the respondent15 (2009) 7 SCC 462 ABCDEFGH687No.2-Liquidator to abandon/cancel/terminate/waive the said process atany stage, it cannot be a ground to take such a step in an arbitrarymanner, as has been done in the instant case, more so when the entiresale process had almost reached a closure when respondent No.7 -Welspun suddenly intervened seeking a composite sale of the assets ofthe Corporate Debtor. Lastly, learned Senior Counsel for the appellantsubmitted that the NCLAT has erred in directing that a fresh bid oughtto be conducted. Instead, the appellant being the Anchor Bidder, oughtto be given the benefit of matching the highest bid submitted withoutscrapping the Second Swiss Challenge process.14. Mr. Arvind Datar and Mr. Savla, learned Senior counselappearing for the respondent No.2 - Liquidator sought to repel thearguments advanced on behalf of the appellant and asserted that therespondent No.2 - Liquidator had conducted the liquidation process ofthe Corporate Debtor in consultation with the stakeholders at every stepand in the best interest of the Corporate Debtor, while strictly adheringto the provisions of the IBC and the Liquidation Regulations. Layingemphasis on the mandate of the Liquidator under the IBC to ensuremaximisation of the value of the assets of the Corporate Debtor, it wasstated that the intention of the respondent No.2 - Liquidator all throughwas to sell the consolidated assets of the Corporate Debtor and towardsthis direction, five e-auctions were conducted by him. In the first two e-auctions, attempts were made to sell the assets of the Corporate Debtorcompositely but that was to no avail. Left with no other option, respondentNo.2 - Liquidator decided to offer the assets of the Corporate Debtorfor sale singly or in smaller lots, besides compositely. Despite adoptingthe aforesaid route in the third, fourth and fifth e-auction processes, theauction sales failed to take off and none of the assets of the CorporateDebtor could be liquidated except for two residential apartments situatedin Mumbai and Ahmedabad. It was only after five failed auctions thatthe respondent No.2 - Liquidator moved an application before the NCLTfor permission to sell the assets of the Corporate Debtor by way ofPrivate Sale, in terms of Regulation 33(2)(d) of the LiquidationRegulations, which was duly allowed.15. Arguing that the appellant has no right to insist that therespondent No.2 - Liquidator ought to have concluded the Second SwissChallenge Process when a higher offer was available and was dulyrecommended by the stakeholders, learned counsel cited the Minutes ofM/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH688SUPREME COURT REPORTS[2022] 12 S.C.R.the Meeting of the stakeholders held on 13th August, 2021 recording theview of the stakeholders that a composite sale of the Dahej assets asopposed to the sale set out under the Swiss Challenge process, would befar more beneficial and lead to maximising recovery in a guaranteedtime line and that the said strategy ought to be adopted to ensure certaintyof realization of the sale proceeds in the shortest possible time. It wasstated that the respondent No.2 - Liquidator was only acting in terms ofthe views expressed by the stakeholders which stood to reason andlogic and the said view has found favour with both, the NCLT as alsothe NCLAT.16. As for the plea taken by the appellant that the Second SwissChallenge Process ought to have been taken to its logical conclusion andcould not have been abandoned midstream, learned counsel for therespondent No.2 - Liquidator submitted that simply because the appellanthad participated in and was selected as an Anchor Bidder in the SecondSwiss Challenge Process, does not mean that it has any vested right tohave the same concluded in its favour. Moreover, the said processcomprises of two-stage bidding and the second stage which involvedopening the process to the public to match the bid given by the appellantas the Anchor Bidder, was not concluded. Relying on the decisions inLaxmikant and Others v. Satyawan and Others16 and State ofJharkhand and Others v. CWE-Soma Consortium17, it was canvassedthat since the Second Swiss Challenge Process was not concluded, novested right had accrued in favour of the appellant for seekingenforcement in the Court of Law.17. It was next argued that having accepted the terms of AnchorBid Document, the appellant cannot be permitted to challenge the decisionof the respondent No. 2-Liquidator who had to cancel the Second SwissChallenge Process. In this context, reference was made to the affidavitdated 23rd March, 2020 submitted by the appellant wherein it hadundertaken to remain unconditionally and irrevocably bound by the SwissChallenge Process document as also by the decision of the respondentNo.2 - Liquidator to cancel/ abandon/modify at any time solely at hisdiscretion, the sale process or any part thereof. To bring home the saidpoint, reliance has been placed on Clause 11.6 of the Swiss ChallengeProcess and Clause 12.3 of the Anchor Bid Document. To buttress theargument that the entity issuing the tender is well empowered to cancel16 (1996) 4 SCC 20817 (2016) 14 SCC 172 ABCDEFGH689the process if the tender documents so permit, learned counsel has citedCWE-Soma Consortium (supra); Tata Cellular v. Union of India18and Air India v. Cochin International Airport Limited and Others19.The decisions inMontecarlo Limited v. National Thermal PowerCorporation Limited20 and Agmatel India Private Limited v.Resources Telecom and Others21 have been relied on in support of thesubmission that courts should show restraint in matters relating to theinterpretation of the tender document and the Agency floating the tenderis best placed to decide its requirements.18. Refuting the submission made on behalf of the appellant thatthe respondent No.2 - Liquidator has adopted an unfair process forconducting Private Sale of the assets of the Corporate Debtor, learnedcounsel asserted that there are no malafides on the part of the Liquidatorin inviting fresh bids after taking the decision to cancel the Second SwissChallenge Process when the stakeholders were duly consulted and theyhad unanimously expressed an opinion to go in for Private Sale of thecomposite assets of the Corporate Debtor. It was pointed out that evenafter receiving an offer from the respondent No. 7-Welspun in May,2021, respondent No.2 - Liquidator did not unilaterally decide to scrapthe Second Swiss Challenge Process. Rather, he approached thestakeholders on 6th August, 2021 and only after receiving a green signalfrom them, he took the matter to the NCLT. Alluding to the terms ofSchedule I, Clause 2(3) of the Liquidation Regulations, it was arguedthat Private Sale through direct liaison with potential buyers or throughthe agents is permissible. The attention of the Court was also drawn toRegulation 4 of the Liquidation Regulations which requires the liquidationprocess to be completed within two years and it was submitted that theorder for liquidation of the Corporate Debtor was passed on 24th May,2019 and three years have already lapsed since then and if the Dahejland and scrap are directed to be sold separately, it will require a minimumperiod of 15 to 18 months to remove the material from the Dahej shipyardthereby delaying sale of the Dahej land and buildings and adverselyimpacting the value of the Corporate Debtor and its assets.19. The only grievance raised on behalf of the respondent No.2 -Liquidator is in respect of the directions issued in the impugned order18 (1994) 6 SCC 65119 (2000) 2 SCC 61720 (2016) 15 SCC 27221 (2022) 5 SCC 362M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH690SUPREME COURT REPORTS[2022] 12 S.C.R.calling upon him to restart the process of Private Sale dated 24th August,2021 after giving an open notice to all the prospective buyers. Supportinga similar stand taken by the respondent No.7 - Welspun (appellant inCivil Appeal No. 7731 of 2021) that any such step will delay the liquidationprocess and result in putting the clock back to the stage of open auction, learned counsel submitted that the process that is under challenge is thePrivate Sale process which is duly contemplated in Regulation 33(2) ofthe Liquidation Regulations and cannot be questioned. Additionally, reference was made to a subsequent development where the CoreCommittee of Financial Creditors conducted a meeting on 15thDecember, 2021, after the impugned order was passed and had expresseda unanimous view that the Private Sale process should be continued andnot restarted having regard to the fact that it has taken almost threeyears to find a buyer and the same is at the stage of being brought to aclosure. A copy of the minutes of the Core Committee held on 15thDecember, 2021, has been enclosed with IA No.34322/2022 (applicationfor permission to file additional documents) filed by the respondent No.2– Liquidator.SUBMISSIONS OF THE RESPONDENT NO. 7 - WELSPUN20. Arguments advanced by Mr. Aman Raj Gandhi, learned counselfor Welspun, respondent No.7 in Civil Appeal No. 7722 of 2021 andappellant in Civil Appeal No. 7731 of 2021 are broadly on the same linesas those advanced on behalf of the respondent No.2 – Liquidator. It wassubmitted that the appellant was involved in the bidding process sinceMarch, 2021 and had all the opportunity to conduct site visits andundertake due diligence to come up with a bid for the consolidated assetsoffered for sale by the respondent No.2 – Liquidator, but it failed to doso that even as on date, the appellant has not evinced any interest inbidding for the consolidated assets of the Corporate Debtor; that theentire effort of the appellant is to resort to dilatory tactics and stall theliquidation process; that earlier too, Welspun was constrained to approachthis Court by way of Civil Appeal No. 5855 of 2021 in view of theaforesaid conduct of the appellant and it was only after an order waspassed by this Court on 21st September, 2021, requesting the NCLAT todispose of the appeal preferred by the appellant within two months thatthe impugned order has been passed which deserves to be upheld exceptto the extent that the NCLAT has directed the Private Sale process tobe restarted after giving an open notice to the prospective buyers. ABCDEFGH691Stressing the fact that such a direction is not in consonance with theobject of the IBC and does not subserve the interest of the stakeholderswho have already given their unanimous consent to the Private Sale ofthe composite assets of the Corporate Debtor by invitation, learnedcounsel for Welspun has argued that the aforesaid direction deserves tobe set aside, being bereft of any rationale. Besides, the said directionhas been passed by the NCLAT when none of the parties appearingbefore it had sought any such relief. Citing the decision in Swiss RibbonsPrivate Limited and Another v. Union of India and Others22 andEBIX Singapore Private Limited v. Committee of Creditors ofEducomp Solutions Limited and Another23 wherein it has beenobserved that a delay in the liquidation process results in depletion in thevalue of the Corporate Debtor and a low realization, learned counsel forWelspun argued that it is imperative to preserve the economic value ofthe assets of the Corporate Debtor and expedite the realization processby carrying it forward instead of putting the clock back and directing therespondent No.2 - Liquidator to start afresh. In fact, the aforesaid directionwas sought to be described as a fusion of two distinct concepts of ‘PrivateSale’ and ‘public auction’ and it was submitted that issuance of an ‘opennotice’ runs contrary to the very object of going in for a private sale. Learned counsel for Welspun concluded by citing a recent decision inJaypee Kensington Boulevard Apartments Welfare Association andOthers v. NBCC (India) Limited and Others24 where emphasis hasbeen laid on the object of the IBC being to ensure resolution/liquidationin a time bound manner for maximization of value assets in order tobalance the interest of all the stakeholders. It was urged that as therespondent No.2 - Liquidator has taken a decision to sell the assets ofthe Corporate Debtor on a composite basis by Private Sale in consultationwith the Stakeholders Consolidation Committee, the NCLAT ought notto have replaced the commercial wisdom of the SCC with its own view, without offering any justification for doing so.SUBMISSIONS OF RESPONDENT NO.8 – M/s KANTERSTEEL INDIA PRIVATE LIMITED21. Mr. Gaurav Mathur, learned counsel for the respondent No.8– M/s. Kanter Steel India Private Limited has also supported thesubmissions made on behalf of the respondent No.7 - Welspun and22 (2019) 4 SCC 1723 (2022) 2 SCC 40124 (2022) 1 SCC 401M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH692SUPREME COURT REPORTS[2022] 12 S.C.R.contended that the private sale process initiated by the respondent No.2- Liquidator has the potential of fetching greater value for the largergood of the stakeholders of the Corporate Debtor and deserves to becontinued. Referring to the offer of ` 431 crores made by the appellantunder the Second Swiss Challenge Process, it was stated that the samewas evidently below the base price of ` 460 crores declared by therespondent No.2 - Liquidator and the appellant was also in clear breachof the timelines fixed in the Sale Process Documents. The timeline fixedfor submitting the earnest money deposit in the Sale Process Documentfor the Anchor Bidder was 24th March, 2021, by 2:00 P.M. whereas, theappellant had admittedly deposited the earnest money two days thereafter, on 26th March, 2021, which itself was sufficient ground for the respondentNo.2 - Liquidator to have rejected its offer at the threshold. It wassubmitted that all the aforesaid submissions form a part of the objectionstaken by the respondent No.8 and other parties before the NCLT whichwere still pending when the matter came to be finally decided by theNCLAT. It has thus been argued that the appellant having participatedin the bid process with eyes wide open and without any demur, it cannotbe heard to state now that a vested right has been created in its favourmerely on account of its participation in the bid process.SUBMISSION OF THE APPLICANT/INTERVENOR, KIRIINFRASTRUCTURE PRIVATE LIMITED (IA NO.166862/2021)22. Mr. Mukul Rohtagi, learned Senior counsel for the applicant -Kiri Infrastructure submitted that the applicant had filed an applicationbefore the Adjudicating Authority (NCLT) on 23rd November, 2021 seekingimpleadment and had made an offer of ` 680 crores to purchase theDahej Material, the Shipyard land and buildings. Simultaneously, a similarapplication was moved by the applicant before the NCLAT. However, the said application was not on record when the Company Appeal waslisted before the NCLAT on 24th November, 2021, on which date, orderswere reserved in the Appeal followed by the impugned judgment thatwas passed on 10th December, 2021. The applicant seeks impleadmentin the present Appeal and supports the impugned judgment to the extentthat the NCLAT had directed the respondent No.2 – Liquidator to restartthe sale process after issuing an open notice to the prospective buyers, thereby affording an opportunity to the applicant to submit a bid for theconsolidated assets of the Corporate Debtor on a plea that so far, itsoffer is the highest. ABCDEFGH693ANALYSIS23. We have perused the impugned judgment as well as thedocuments placed on record and carefully considered the rival submissionsadvanced by learned counsel for the parties. Only two points arise forconsideration in these appeals. Firstly, whether the respondent No.2 –Liquidator was justified in discontinuing the Second Swiss ChallengeProcess for the sale of a part of the assets of the Corporate Debtorwherein the appellant – R.K. Industries was declared as an AnchorBidder and opting for a Private Sale Process through direct negotiationsin respect of the composite assets of the Corporate Debtor? If so, wasthe NCLAT justified in directing the respondent No.2 – Liquidator torestart the entire process of Private Sale after issuing an open notice toprospective buyers instead of confining the process to those parties whohad participated in the process earlier?24. To begin with, it is considered necessary to have an overviewof the IBC and its relevant provisions along with the LiquidationRegulations for a better understanding of the manner in which a Liquidatoris expected to proceed for conducting the sale of the assets of theCorporate Debtor in liquidation.25. Conscious of the inadequate and ineffective framework ofthe insolvency and bankruptcy resolution, the Government decided tooverhaul the insolvency regime. Towards this end, there were severalrounds of deliberations and consultations, followed by presentation ofCommittee Reports, prominent among them being the Report of theBankruptcy Law Reforms Committee25 Volume I : Rationale and Designof November, 201526. As observed in Innovative Industries Limited v.ICICI Bank and Another27, the aim of the Parliament was to codify alegislation that would bring the entire insolvency and bankruptcy regimeunder one umbrella and speed up the process.26. The Statement of the Objects and Reasons that prevailedupon the legislature to enact the IBC is as follows :“12. …. The Statement of Objects and Reasons of the Codereads as under:25 For short ‘BLRC’26 The Report of the Bankruptcy and Law Reforms Committee Vol. I : Rationale andDesign, accessible at <https://www.ibbi.gov.in/uploads/resources/BLRCReportVol1_04112015.pdf >,27 (2018) 1 SCC 407M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH694SUPREME COURT REPORTS[2022] 12 S.C.R.“Statement of Objects and Reasons — There is no single law inIndia that deals with insolvency and bankruptcy. Provisions relatingto insolvency and bankruptcy for companies can be found in theSick Industrial Companies (Special Provisions) Act, 1985, theRecovery of Debts Due to Banks and Financial Institutions Act,1993, the Securitisation and Reconstruction of Financial Assetsand Enforcement of Security Interest Act, 2002 and the CompaniesAct, 2013. These statutes provide for creation of multiple forasuch as Board of Industrial and Financial Reconstruction (BIFR),Debts Recovery Tribunal (DRT) and National Company LawTribunal (NCLT) and their respective Appellate Tribunals. Liquidation of companies is handled by the High Courts. Individualbankruptcy and insolvency is dealt with under the PresidencyTowns Insolvency Act, 1909, and the Provincial Insolvency Act,1920 and is dealt with by the Courts. The existing frameworkfor insolvency and bankruptcy is inadequate, ineffective andresults in undue delays in resolution, therefore, the proposedlegislation.2. The objective of the Insolvency and Bankruptcy Code, 2015is to consolidate and amend the laws relating to reorganisationand insolvency resolution of corporate persons, partnershipfirms and individuals in a time-bound manner for maximisationof value of assets of such persons, to promoteentrepreneurship, availability of credit and balance theinterests of all the stakeholders including alteration in thepriority of payment of government dues and to establish anInsolvency and Bankruptcy Fund, and matters connectedtherewith or incidental thereto. An effective legal frameworkfor timely resolution of insolvency and bankruptcy wouldsupport development of credit markets and encourageentrepreneurship. It would also improve Ease of DoingBusiness, and facilitate more investments leading to highereconomic growth and development.3. The Code seeks to provide for designating NCLT and DRT asthe adjudicating authorities for corporate persons and firms andindividuals, respectively, for resolution of insolvency, liquidationand bankruptcy. The Code separates commercial aspects ofinsolvency and bankruptcy proceedings from judicial aspects. The ABCDEFGH695Code also seeks to provide for establishment of the Insolvencyand Bankruptcy Board of India (Board) for regulation of insolvencyprofessionals, insolvency professional agencies and informationutilities. Till the Board is established, the Central Government shallexercise all powers of the Board or designate any financial sectorregulator to exercise the powers and functions of the Board. Insolvency professionals will assist in completion of insolvencyresolution, liquidation and bankruptcy proceedings envisaged inthe Code. Information Utilities would collect, collate, authenticateand disseminate financial information to facilitate such proceedings. The Code also proposes to establish a fund to be called theInsolvency and Bankruptcy Fund of India for the purposes specifiedin the Code.4. The Code seeks to provide for amendments in the IndianPartnership Act, 1932, the Central Excise Act, 1944, CustomsAct, 1962, the Income Tax Act, 1961, the Recovery of DebtsDue to Banks and Financial Institutions Act, 1993, the FinanceAct, 1994, the Securitisation and Reconstruction of Financial Assetsand Enforcement of Security Interest Act, 2002, the Sick IndustrialCompanies (Special Provisions) Repeal Act, 2003, the Paymentand Settlement Systems Act, 2007, the Limited Liability PartnershipAct, 2008, and the Companies Act, 2013.5. The Code seeks to achieve the above objectives.”27. The Preamble of the IBC describes the Act as:“An Act to consolidate and amend the laws relating toreorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner formaximisation of value of assets of such persons, to promoteentrepreneurship, availability of credit and balance the interestsof all the stakeholders including alteration in the order of priorityof payment of government dues and to establish an Insolvencyand Bankruptcy Board of India, and for matters connectedtherewith or incidental thereto.”28. In EBIX Singapore Private Limited (supra), discussing theraison d’étreof the IBC for giving a purposive interpretation of the statute, this Court has observed that :M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH696SUPREME COURT REPORTS[2022] 12 S.C.R.“96. …. IBC was introduced as a watershed moment forInsolvency law in India that consolidated processes under severaldisparate statutes such as the 2013 Act, SICA, SARFAESI, theRecovery of Debts Act, the Presidency Towns Insolvency Act,1909 and the Provincial Insolvency Act, 1920, into a single code.A comprehensive and time-bound framework was introduced withsmooth transitions between reorganisation and liquidation, withan aim to inter alia maximise the value of assets of all persons andbalance the interest of all stakeholders”29. The underlying object of the IBC of maximization of the valueof the assets of the Corporate Debtor has been highlighted in SwissRibbons Private Limited (supra) in the following words :“27. As is discernible, the Preamble gives an insight into what issought to be achieved by the Code. The Code is first and foremost,a Code for reorganisation and insolvency resolution of corporatedebtors. Unless such reorganisation is effected in a time-boundmanner, the value of the assets of such persons will deplete. Therefore, maximisation of value of the assets of such persons sothat they are efficiently run as going concerns is another veryimportant objective of the Code. This, in turn, will promoteentrepreneurship as the persons in management of the corporatedebtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor isbrought back into the economic mainstream, it is able to repay itsdebts, which, in turn, enhances the viability of credit in the handsof banks and financial institutions. Above all, ultimately, theinterests of all stakeholders are looked after as the corporate debtoritself becomes a beneficiary of the resolution scheme—workersare paid, the creditors in the long run will be repaid in full, andshareholders/investors are able to maximise their investment. Timely resolution of a corporate debtor who is in the red, by aneffective legal framework, would go a long way to support thedevelopment of credit markets. Since more investment can bemade with funds that have come back into the economy, businessthen eases up, which leads, overall, to higher economic growthand development of the Indian economy. What is interesting tonote is that the Preamble does not, in any manner, refer toliquidation, which is only availed of as a last resort if there is ABCDEFGH697either no resolution plan or the resolution plans submitted are notup to the mark. Even in liquidation, the liquidator can sell thebusiness of the corporate debtor as a going concern.”30. In the BLRC, the liquidation process has been discussed inChapter 5 and much stress has been laid on the observations of timevalue in the following terms28 :“5.5 A time-bound, efficient LiquidationLiquidation is the state the entity enters at the end of an IRP,where neither creditors nor debtors can find a commonly agreeablesolution by which to keep the entity as a going concern. In India, it is widely accepted that liquidation is a weak link in the bankruptcyprocess and must be strengthened as part of ensuring a robustlegal framework. The process flow in liquidation shares someobjectives in common with that of resolving insolvency. Preservationof time value is the most important, and efficient outcomes undercollective action is the next, both of which are important principlesdriving the design. However, this is not straightforward inimplementation, particularly in an environment where differentcreditors have different rights over the assets of the entity, information is asymmetric, and governance and enforcement hasbeen traditionally weak.”31. In the Fifth Report of the Insolvency Law Committee, May,2022 published by the Ministry of Corporate Affairs, Government ofIndia29, while examining whether the role of the SCC ought to bereviewed and suitable provisions be enacted in the IBC to give its statutoryrecognition, the Committee observed that the BLRC has designed theCIRP to be driven by creditors of the Corporate Debtor, the liquidationprocess is met to be driven by the Liquidator. Therefore, the act doesnot contemplate a Creditors’ Committee in the liquidation process. Thecreditors have a limited role of participation in the decision making duringthe said process. In fact, UNCITRAL Legislative Guide on InsolvencyLaw also acknowledges that it is generally not important for creditors to28 5.5, The Report of the Bankruptcy Law Reforms Committee, Vol. 1: Rational &Design (November 2015), available at <https://www.ibbi.gov.in/uploads/resources/BLRCReportVol1_04112015.pdf >, last accessed 06-07-2022.29 The Fifth Report of the Insolvency Law Committee, May, 2022 published by theMinistry of Corporate Affairs, Government of India at<https://www.ibbi.gov.in/uploads/resources/f841a45902d901ef311fe6d76127d094.pdf>, last accessed 06-07-2022M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH698SUPREME COURT REPORTS[2022] 12 S.C.R.intervene in proceedings or participate in decision making during theliquidation process as the said process is driven by the Liquidator. Thesuggestion made by the UNCITRAL Legislative Guide is that in instancessuch as sell of assets in the context of liquidation proceedings, thecreditors may be given a more significant role to play to boost the valueof returns from such sale.32. That time is the essence of the insolvency and the liquidationprocess and one of the paramount factors that weighed with the legislaturefor introducing the new insolvency regime through the IBC, has beenreferred to by the BLRC that has observed that “the swiftness withwhich the liquidation face can be completed with the most efficientway as always rested on the Liquidator”. One of the central problemsidentified in the poor implementation of bankruptcy systems in India hasbeen the Liquidator. It has been highlighted how important it was tospeed up the working of the Bankruptcy Code and what are the benefitsof such a fast paced process. Significantly, the Executive Summary ofthe BLRC Report30 has made the following observations on the “Speedis of Essence” :“Speed is of essence for the working of the Bankruptcy Code, fortwo reasons. First, while the “calm period” can help keep anorganisation afloat, without the full clarity of ownership and control, significant decisions cannot be made. Without effective leadership, the firm will tend to atrophy and fail. The longer the delay, themore likely it is that liquidation will be the only answer. Second, the liquidation value tends to go down with time as many assetssuffer from a high economic rate of depreciation. From the viewpoint of creditors, a good realisation can generallybe obtained if the firm is sold as a going concern. Hence, whendelays induce liquidation, there is value destruction. Further, evenin liquidation, the realisation is lower when there are delays. Hence, delays cause value destruction. Thus, achieving a high recoveryrate is primarily about identifying and combating the sources ofdelay.”33. It has been noticed from past experience that judicial delays isone of the major reasons for the failure of the insolvency process. Thus, much emphasis was laid in the BLRC Report on expediting the liquidation30 https://ibbi.gov.in/BLRCReportVol1_04112015.pdf ABCDEFGH699process by curtailing the delay to ensure that the assets of the CorporateDebtor do not get frittered away or depreciated due to the time lag. Once the stage of CIRP is over and the process of liquidation is set intomotion, it is critical that least time is lost in liquidating the assets of theCorporate Debtor. The reasons are not far to see. A quick, smooth andseamless process of liquidation goes a long way in stemming deteriorationof the value of the assets of the Corporate Debtor in liquidation andincreases the chances of maximizing the returns to the stakeholders.34. Keeping in mind the underlying object of this special enactment, we may directly proceed to examine Chapter III of the IBC thatencapsulates the liquidation process right from the stage of initiation ofliquidation, till the stage of dissolution of the Corporate Debtor. Section33 of the IBC states as follows :“33. Initiation of Liquidation - (1) Where the AdjudicatingAuthority—(a) before the expiry of the insolvency resolution process periodor the maximum period permitted for completion of the corporateinsolvency resolution process under section 12 or the fast trackcorporate insolvency resolution process under section 56, as thecase may be, does not receive a resolution plan under sub-section(6) of section 30; or(b) rejects the resolution plan under section 31 for the non-compliance of the requirements specified therein, it shall—(i) pass an order requiring the corporate debtor to be liquidated inthe manner as laid down in this Chapter;(ii) issue a public announcement stating that the corporate debtoris in liquidation; and(iii) require such order to be sent to the authority with which thecorporate debtor is registered.”35. The circumstances in which liquidation can be triggered bythe Adjudicating Authority (NCLT) under Section 33, have been speltout in Arcelormittal India Private Limited v. Satish Kumar Guptaand Others31 as below:“76.10. As has been stated hereinbefore, the liquidation processgets initiated under Section 33 if, (1) either no resolution plan issubmitted within the time specified under Section 12, or a resolution31 (2019) 2 SCC 1M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH700SUPREME COURT REPORTS[2022] 12 S.C.R.plan has been rejected by the adjudicating authority; (2) wherethe Resolution Professional, before confirmation of the resolutionplan, intimates the adjudicating authority of the decision of theCommittee of Creditors to liquidate the corporate debtor; or (3)where the resolution plan approved by the adjudicating authorityis contravened by the corporate debtor concerned. Any personother than the corporate debtor whose interests are prejudiciallyaffected by such contravention may apply to the adjudicatingauthority, who may then pass a liquidation order on suchapplication.”36. Section 34 of the IBC contemplates that on passing an orderfor liquidation of the Corporate Debtor under Section 33, the ResolutionProfessional appointed for the CIRP shall act as a Liquidator for purposesof liquidation. Once appointed as a Liquidator, all powers of the Boardof Directors, key managerial personnel and the partners of the CorporateDebtor stand vested in the Liquidator. The powers and duties of theLiquidator have been elaborated in Section 35. To contextualize theensuing discussion, extracted below is Section 35 of the IBC:“35. Powers and duties of liquidator - (1) Subject to thedirections of the Adjudicating Authority, the liquidator shall havethe following powers and duties, namely:—xxxxxxxxxxxx(b)to take into his custody or control all the assets, property, effects and actionable claims of the corporate debtor; xxxxxxxxxxxx(f)subject to section 52, to sell the immovable and movableproperty and actionable claims of the corporate debtor inliquidation by public auction or private contract, with powerto transfer such property to any person or body corporate, or to sell the same in parcels in such manner as may bespecified; xxxxxxxxxxxx(n)to apply to the Adjudicating Authority for such orders ordirections as may be necessary for the liquidation of thecorporate debtor and to report the progress of the liquidationprocess in a manner as may be specified by the Board. ABCDEFGH701xxxxxxxxxxxx(2)The liquidator shall have the power to consult any of thestakeholders entitled to a distribution of proceeds undersection 53: Provided that any such consultation shall not bebinding on the liquidator: Provided further that the recordsof any such consultation shall be made available to all otherstakeholders not so consulted, in a manner specified by theBoard.”37. Coming next to the Liquidation Regulations, Regulations 8,31A, 32 and 33 need to be highlighted and state as follows:“8. Consultation with stakeholders.(1) The stakeholders consulted under section 35(2) shall extendall assistance and cooperation to the liquidator to complete theliquidation of the corporate debtor.(2) The liquidator shall maintain the particulars of any consultationwith the stakeholders made under this Regulation, as specified inForm A of Schedule II.xxx xxxx xxxx31A. Stakeholders’ Consultation Committee.(1) The liquidator shall constitute a consultation committee withinsixty days from the liquidation commencement date, based on thelist of stakeholders prepared under regulation 31, to advise him onthe matters relating to sale under regulation 32.xxxxxxxx xxxx(5) Subject to the provisions of the Code and these regulations, representatives in the consultation committee shall have accessto all relevant records and information as may be required toprovide advice to the liquidator under sub-regulation (1).xxxxxxxx xxxx(7) The liquidator shall chair the meetings of consultation committeeand record deliberations of the meeting.(8) The liquidator shall place the recommendation of committeeof creditors made under sub-regulation (1) of regulation 39C ofthe Insolvency and Bankruptcy Board of India (InsolvencyM/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH702SUPREME COURT REPORTS[2022] 12 S.C.R.Resolution Process for Corporate Persons) Regulations, 2016,before the consultation committee for its information.(9) The consultation committee shall advise the liquidator, by avote of not less than sixty-six percent of the representatives ofthe consultation committee, present and voting.(10) The advice of the consultation committee shall not be bindingon the liquidator: Provided that where the liquidator takes a decisiondifferent from the advice given by the consultation committee, heshall record the reasons for the same in writing.32.[Sale of Assets, etc. The liquidator may sell-(a) an asset on a standalone basis;(b) the assets in a slump sale;(c) a set of assets collectively;(d) the assets in parcels;(e) the corporate debtor as a going concern; or(f) the business(s) of the corporate debtor as a going concern: Provided that where an asset is subject to security interest, itshall not be sold under any of the clauses (a) to (f) unless thesecurity interest therein has been relinquished to the liquidationestate.]33. Mode of sale.(1) The liquidator shall ordinarily sell the assets of the corporatedebtor through an auction in the manner specified in Schedule I.(2) The liquidator may sell the assets of the corporate debtor bymeans of private sale in the manner specified in Schedule I when-(a) the asset is perishable;(b) the asset is likely to deteriorate in value significantly if not soldimmediately;(c) the asset is sold at a price higher than the reserve price of afailed auction; or ABCDEFGH703(d) the prior permission of the Adjudicating Authority has beenobtained for such sale:Provided that the liquidator shall not sell the assets, without priorpermission of the Adjudicating Authority, by way of private saleto-(a) a related party of the corporate debtor;(b) his related party; or(c) any professional appointed by him.(3) The liquidator shall not proceed with the sale of an asset if hehas reason to believe that there is any collusion between the buyers, or the corporate debtor’s related parties and buyers, or the creditorsand the buyer, and shall submit a report to the Adjudicating Authorityin this regard, seeking appropriate orders against the colludingparties.”38. Schedule-I under Regulation 33 lays down the procedure tobe followed by the Liquidator for selling the assets of the CorporateDebtor. The relevant clauses of Schedule-I are extracted as below:“SCHEDULE IMODE OF SALE(Under Regulation 33 of the Insolvency and Bankruptcy Boardof India (Liquidation Process) Regulations, 2016)1. AUCTION(1) Where an asset is to be sold through auction, a liquidator shalldo so the in the manner specified herein.(2) The liquidator shall prepare a marketing strategy, with thehelp of marketing professionals, if required, for sale of the asset. The strategy may include-(a) releasing advertisements;(b) preparing information sheets for the asset;(c) preparing a notice of sale; and(d) liaising with agents.M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH704SUPREME COURT REPORTS[2022] 12 S.C.R.(3) The liquidator shall prepare terms and conditions of sale, including reserve price, earnest money deposit as well as pre-bidqualifications, if any.xxxxxxxx xxxx2. PRIVATE SALE(1) Where an asset is to be sold through private sale, a liquidatorshall conduct the sale in the manner specified herein.(2) The liquidator shall prepare a strategy to approach interestedbuyers for assets to be sold by private sale.(3) Private sale may be conducted through directly liaising withpotential buyers or their agents, through retail shops, or throughany other means that is likely to maximize the realizations fromthe sale of assets.xxxxxxxx xxxx”39. On a conjoint reading of the aforesaid provisions of the IBCand the Liquidation Regulations, it is evident that the Liquidator isauthorized to sell the immovable and movable property of the CorporateDebtor in liquidation through a public auction or a private contract, eithercollectively, or in a piecemeal manner. The underlying object of the Statuteis to protect and preserve the assets of the Corporate Debtor in liquidationand proceed to sell them at the best possible price. Towards this object, the provisions of the IBC have empowered the Liquidator to go in for apublic auction or a private contract as a mode of sale. Besides reportingthe progress made, the Liquidator can also apply to the AdjudicatingAuthority (NCLT) for appropriate orders and directions considerednecessary for liquidation of the Corporate Debtor. The Liquidator ispermitted to consult the stakeholders who are entitled to distribution ofthe sale proceeds. However, the proviso to Section 35 (2) of the IBCmakes it clear that the opinion of the stakeholders would not be bindingon the Liquidator. Regulation 8 of the Liquidation Regulations refers tothe consultative process with the stakeholders, as specified in Section35 (2) of the IBC and states that they shall extend all necessary assistanceand cooperation to the Liquidator for completing the liquidation process. Regulation 31A has introduced a Stakeholders’ Consultation Committeethat may advise the Liquidator regarding sale of the assets of theCorporate Debtor and must be furnished all relevant information to provide ABCDEFGH705such advice. Though the advice offered is not binding on the Liquidator, he must give reason in writing for acting against such advice.40. When it comes to the mode of sale of the assets of theCorporate Debtor, whether immovable or movable and other actionableclaims, Regulation 33 of the Liquidation Regulations comes into play andstates that ordinarily, the Liquidator will sell the said assets through auction, as specified in Schedule-I(1). Sub-section (2) of Section 33, IBC givesan option to the Liquidator to sell the assets of the Corporate Debtorthrough a Private Sale, in the manner set out in Schedule-I (2). Regulation33 of the Liquidation Regulations is couched in a language which showsthat ample latitude has been given to the Liquidator, who may “ordinarily”sell the assets through auction thereby meaning that in peculiar factsand circumstances, the Liquidator may directly go in for a Private Sale.To avoid the pitfalls of disposing of the assets by conducting a PrivateSale for the Pittance, Regulation 33 has prescribed some stringentconditions that the Liquidator is under an obligation to comply. The saidpre-conditions are that (i) the asset is perishable; (ii) the asset is likely todeteriorate in value significancy if not sold immediately;(iii) the asset issold at a higher price than the reserved price of the failed auction; and(iv) the Adjudicating Authority (NCLT) must grant prior permission forsuch a sale. The proviso appended to Regulation 33(2) of the LiquidationRegulations places yet another embargo to the effect that when theLiquidator intends to sell the assets of the Corporate Debtor by way ofa Private Sale to a related party of the Corporate Debtor, his relativepartyor any professional appointed by him, it is mandatory to obtain priorpermission of the Adjudicating Authority (NCLT). Even the mode ofsale has been regulated under the Liquidation Regulations for both, apublic auction and a Private Sale. All the above dos and don’ts havebeen inserted to protect the assets of the Corporate Debtor and safeguardthe interest of the stakeholders.41. It is a matter of record that in the instant case, following themandate of Regulation 33 (1) of the Liquidation Regulations, therespondent No.2 – Liquidator took steps to sell the assets of the CorporateDebtor through the e-auction process not once or twice, but on fiveseparate occasions. On each of the said occasion, efforts were made bythe respondent No.2 – Liquidator to conduct a consolidated sale of theassets of the Corporate Debtor, but with no fruitful results. Faced withthe said situation, the respondent No.2 – Liquidator approached theM/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH706SUPREME COURT REPORTS[2022] 12 S.C.R.Adjudicating Authority (NCLT) in terms of Section 35 (1)(n), IBC readwith Regulation 33(2) of the Liquidation Regulations for seekingpermission to sell the assets of the Corporate Debtor through PrivateSale. Only after due permission was granted, did the respondent No.2 –Liquidator approach the stakeholders for consultation. In the meetingheld on 28th January, 2021, the stakeholders resolved that the prospectivebidders, who wished to participate in the Private Sale of the DahejMaterial, be encouraged to do so by adopting the Swiss ChallengeProcess. Pertinently, the first stage of the said process requires selectionof an Anchor Bidder; the second stage entails inviting prospective biddersto submit their bids against the reserve price offered by the AnchorBidder. At the third stage, the Anchor Bidder gets one chance to exercisethe ROFR against the H1 bidder by placing a bid higher than the H1 bid.In the event the Anchor Bidder fails to exercise the ROFR, the said rightstands extinguished and H1 bidder would then be declared as successful.42. In the instant case, the first Swiss Challenge Process did notsucceed as the highest offerer failed to deposit the EMD. In the secondround of the Swiss Challenge Process, as against the base price of `460 crores fixed for the Dahej Material and scrap, the appellant made abid of ` 431 crores that was accepted. Thereafter, the respondent No.2– Liquidator did publish an advertisement inviting bidders to submit theirbids against the Anchor Bid in response whereto, the appellant, respondents No.3, 4, 5, and 6 submitted their bids, but before the processcould be taken further, on an application moved by the respondent No.1,the Adjudicating Authority (NCLT) passed an order directing therespondent No.2 – Liquidator to carry forward the stage uptoannouncement of the highest bidder, while deferring the rest of theprocess.43. When the matter was still pending before the NCLT, therespondent No.2 – Liquidator was approached by the respondent No.7– Welspun, who evinced interest in purchasing the immovable andmovable assets of the Corporate Debtor, i.e., the Ship building yard alongwith the metal and scrap, etc., lying in the complex. As this offer wasconsidered more attractive not only by the respondent No.2 – Liquidator, but also by the SCC, the Adjudicating Authority (NCLT) was approachedfor permission to undertake a composite sale of the Dahej Material andthe Shipyard, which was duly granted vide order dated 16th August, 2021.44. For testing the arguments advanced on behalf of the appellantthat the respondent No.2 – Liquidator should not have been granted ABCDEFGH707permission to cancel the Second Swiss Challenge Process, which wasat an advance stage, it is imperative to peruse Clause 12.3 of the termsand conditions of the Anchor Bid Documents and the relevant clausesof Schedule II, which are quoted below:“12.Terms and Conditionsxxxx xxxx xxxx12.3.Notwithstanding anything to the contrary contained herein, the Liquidator expressly reserves the right to abandon/cancel/terminate/ waive the current process or a part thereofcontemplated hereunder (at any stage without any liability).Further, the Liquidator reserves the right to reprice andresize or change the lots / combination of lots in the currentSale Process or in any other sale process that may becontemplated, in accordance with applicable laws andwithout incurring any liability in this regard, in the bestinterest of the stakeholders. Schedule – II : General Terms & Conditionsxxxx xxxx xxxx“k. This not an offer document and is issued with nocommitment or assurances. This intimation document doesnot constitute and will not be deemed to constitute any offer, commitment or any representation of the Liquidator /ABGSL. The Process has to be completed as set out underthis document to conclude the transaction/sale successfully.”xxxx xxxx xxxx‘’m. It is clarified that issuance of this Process Documentdoes not create any kind of binding obligation on the part ofthe Liquidator or ABG to effectuate the sale of the assetsof ABG.”xxxx xxxx xxxx“s. The Liquidator reserves the right to cancel, abandon orreject a Bidder / Successful Bidder at any time during theprocess, and the Liquidator also reserves the right todisqualify a Successful Bidder, in case of any irregularitiesfound such as ineligibility under the I & B Code.”M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH708SUPREME COURT REPORTS[2022] 12 S.C.R.“t. Liquidator of ABGSL reserves the right to suspend/abandon/cancel/extend or modify the process terms and/ordocuments and/or reject or disqualify any Bidder at anystage of process without assigning any reason and withoutany notice liability of whatsoever nature.”45. Clause 11.6 and Schedule IV of the Second Swiss ChallengeProcess Document are also relevant and are worded on the same lines:“11.6 Notwithstanding anything to the contrary contained herein, the Liquidator expressly reserves the right to abandon/ cancel/terminate/ waive the current process or a part thereof contemplatedhereunder (at any stage without liability). Further, the Liquidatorreserves the right to reprise and resize or change the lots/combination of notes in the current sale process or in any othersale process that may be contemplated, in accordance withapplicable laws, and without incurring any liability in this regard, in the best interest of stakeholders.”Schedule – IV : Terms & Conditions“e. It is clarified that issuance of the Process Document does notcreate any kind of binding obligation on the part of the Liquidatoror ABG to effectuate the sale of the assets of ABG.”xxxxxxxx xxxx“x. The Liquidator reserves the right to cancel, abandon or rejecta Bidder / Successful Bidder at any time during the process, andthe Liquidator also reserves the right to disqualify a SuccessfulBidder, in case of any irregularities found such as ineligibility underthe I & B Code.”xxxxxxxx xxxx‘’y· Liquidator of ABGSL, reserves the right to suspend/abandon/cancel/ extend or modify the process terms and/or documentsand/or reject or disqualify any Bidder at any stage of processwithout assigning any reason and without any notice liability ofwhatsoever nature.”·46. The following terms of Schedule IV of the Second SwissChallenge Process bestows an additional right on the Liquidator:“Schedule – IV : Terms & Conditions ABCDEFGH709‘‘u. Notwithstanding anything contained herein and contrarythereto, the Liquidator may at any stage include a Bidder toparticipate in the Sale Process. The Liquidator reserves the rightto decide the procedure for including such potential Bidders intothe Sale Process. All bidders agree and accept that the Liquidatorhas the right to accept or reject any Bids even after the deadlineas prescribed herein or at any stage of the Sale Process in orderto maximize the realization from the sale of assets in the bestinterest of the stakeholders.”xxxxxxxx xxxx“mm. Notwithstanding anything to the contrary contained herein :the Liquidator proposes to sell the assets of the Company as awhole to maximize overall recovery and decision for sale shallalso be made after taking cognizance of operational managementmatters to effectuate and practically enable the Sale Process forthe collective sale of assets of the Company and will take allsteps and actions required to effectuate this.”47. A bare perusal of the aforesaid clauses of the Anchor BidDocument and the Second Swiss Challenge Process Document, leaveno manner of doubt that the prospective bidders were informed that theLiquidator had reserved the right to abandon/cancel/terminate/waive thesaid process and/or part thereof at any stage; that issuance of the AnchorBid Document did not create any binding obligations on the Liquidator toproceed with the sale of the assets of the Corporate Debtor; that theAnchor Bid Document did not constitute an offer/commitment or anassurance of the Liquidator. Identical rights were reserved with theLiquidator even in the Second Swiss Challenge Process Document. Infact, as noted above, Schedule IV goes a step further and entitles theLiquidator to include a bidder to participate in the sale process at anystage. He could even decide to sell the composite assets of the CorporateDebtor during the said process.48. Merely because the appellant herein had submitted a bid underthe Anchor Bid Document and was declared as the Anchor Bidder inthe Second Swiss Challenge Process, could not vest a right on it for it toinsist that the said process must be taken to its logical conclusion. Theappellant has been harping about the vested right that had allegedly accruedin its favour on being declared as the Anchor Bidder. But it hasconveniently glossed over an affidavit dated 23rd March, 2021 filed by it,M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH710SUPREME COURT REPORTS[2022] 12 S.C.R.undertaking inter alia that it would remain unconditionally and irrevocablybound by the Swiss Challenge Process Document and the decision ofthe respondent No.2 - Liquidator. Given the aforesaid terms and conditionof the Anchor Bid Document and the Second Swiss Challenge ProcessDocument, read collectively with the unqualified undertaking given bythe appellant acknowledging that the respondent No.2 – Liquidator waswell empowered to cancel/modify or even abandon the said process, itdoes not lie in the mouth of the appellant to urge that once it was set intomotion, there was no justification to discontinue the Second SwissChallenge Process. No special rights came to be bestowed on theappellant as the Anchor Bidder for it to insist that the said process oughtto be taken forward and concluded, irrespective of the subsequentdecision taken by the respondent No.2 – Liquidator, backed to the hilt bythe stakeholders of discontinuing the Swiss Challenge Process and optingfor Private Sale of the consolidated assets of the Corporate Debtor tobe conducted through direct negotiations49. To put it otherwise, an Anchor Bidder has no vested rightbeyond the ROFR, being the origination of the proposal. It must be bornein mind that the Swiss Challenge Process is just another method of privateparticipation that has been recognized by this Court for its transparency[Refer : Ravi Development (supra)]. Ultimately, the IBC has left it tothe discretion of the Liquidator to explore the best possible method forselling the assets of the Corporate Debtor in liquidation, which includesPrivate Sale through direct negotiations with the object of maximizingthe value of the assets offered for sale.50. In the instant case, there was good reason for the respondentNo.2 – Liquidator to have halted the Second Swiss Challenge Processmidstream and approached the Adjudicating Authority (NCLT) armedwith an offer of ` 675 croresreceived from the respondent No.7 –Welspun who had shown interest in the composite sale of the Dahejassets. In fact, this was all along the preferred choice of the respondentNo.2–Liquidator as can be seen from the fact that when public auctionswere conducted by him on five earlier occasions, bids were invited forthe composite assets of the Corporate Debtor. It is a different matterthat the earlier e-auctions turned out to be unsuccessful, thus compellingthe respondent No.2 – Liquidator to explore other options, including theoption to sell the assets in smaller lots.51. In his wisdom, the respondent No.2 – Liquidator found theoffer made by the respondent No.7 – Welspun to be of better value for ABCDEFGH711more than one reason. Firstly, unlike the sale proposed under the SecondSwiss Challenge Process that was confined to the Dahej Material, respondent No.7 – Welspun expressed its willingness to purchase theDahej land and the scrap as a composite asset thereby curtailing tworounds of sales, first for the Dahej Material followed by the Shipyardand the other assets. Secondly, the respondent No.2 – Liquidator hadvalid reasons to believe that a consolidated sale of the assets of theCorporate Debtor will lead to a higher return and a quicker recovery forthe stakeholders. Thirdly, composite sale of the assets would lead tomaximization of recovery within a guaranteed timeline. In the assessmentof the respondent No.2 – Liquidator, a two tier process of selling theDahej Material in the first round through the Swiss Challenge method, followed by the sale of the Dahej land in the second round, would havecaused prejudice to the stakeholders for the reason that continuing theSecond Swiss Challenge Process would have meant that the appellantor the H1 bidder, as the case may be, would have to be granted at least15 to 18 months to lift the material from the Dahej Shipyard, thus stallingthe entire process of the sale of the Dahej land to a period well beyond18 months. This delay in concluding the process could directly impactthe value of the assets of the Corporate Debtor and hurt the interest ofthe stakeholders.52. We are of the firm view that it is not for the court to questionthe judiciousness of the decision taken by the respondent No.2 –Liquidator with the idea of enhancing the value of the assets of theCorporate Debtor being put up for sale. The right to refuse the highestbid or completely abandon or cancel the bidding process was availableto the respondent No.2 – Liquidator. The appellant has not been able todemonstrate that the decision of the respondent No.2 – Liquidator todiscontinue the Second Swiss Challenge Process and go in for a PrivateSale through direction negotiations with prospective bidders was amalafide exercise. It is a well-settled principle that in matters relating tocommercial transactions, tenders, etc., the scope of judicial review isfairly limited and the court ought to refrain from substituting its decisionsfor that of the tendering agency [Ref.: State of Madhya Pradesh andOthers v. Nandlal Jaiswal and Others32,Tata Cellular (supra) andAir India (supra)]. In Nandlal Jaiswal and Others (supra), this Courtheld that while granting a licence for setting up a new industry, the StateGovernment is not under any obligation to advertise and invite offers for32 (1986) 4 SCC 566M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH712SUPREME COURT REPORTS[2022] 12 S.C.R.the said purpose and that the State Government is well entitled to negotiatewith those who have come up with an offer to set up such an industry. In5 M & T Consultants, Secunderabad v. S.Y. Nawab and Another33,the court concluded as under :“17. …… It is by now well settled that non-floating of tendersor absence of public auction or invitation alone is no sufficientreason to castigate the move or an action of a public authority aseither arbitrary or unreasonable or amounting to mala fide orimproper exercise or improper abuse of power by the authorityconcerned. Courts have always leaned in favour of sufficientlatitude being left with the authorities to adopt their own techniquesof management of projects with concomitant economicexpediencies depending upon the exigencies of a situation guidedby appropriate financial policy in the best interests of the authoritymotivated by public interest as well in undertaking suchventures……..”53. On the aspect of rejecting even the highest bid received by anAuthority, this Court has held in Laxmikant and Others (supra) asunder :“4. Apart from that the High Court overlooked the conditions ofauction which had been notified and on basis of which the aforesaidpublic auction was held. Condition No. 3 clearly said that afterthe auction of the plot was over, the highest bidder had to remit 1/10 of the amount of the highest bid and the balance of the premiumamount was to be remitted to the trust office within thirty days“from the date of the letter informing confirmation of the auctionbid in the name of the person concerned”. Admittedly, no suchconfirmation letter was issued to the respondent. Conditions Nos.5, 6 and 7 are relevant:“5. The acceptance of the highest bid shall depend onthe Board of Trustees.6. The Trust shall reserve to itself the right to reject thehighest or any bid.7. The person making the highest bid shall have no rightto take back his bid. The decision of the Chairman of the Board33 (2003) 8 SCC 100 ABCDEFGH713of Trustees regarding acceptance or rejection of the bid shallbe binding on the said person. Before taking the decision asabove and informing the same to the individual concerned, ifthe said individual takes back his bid, the entire amount remittedas deposit towards the amount of bid shall be forfeited by theTrust.”From a bare reference to the aforesaid conditions, it isapparent and explicit that even if the public auction hadbeen completed and the respondent was the highest bidder, no right had accrued to him till the confirmation letter hadbeen issued to him. The conditions of the auction clearlyconceived and contemplated that the acceptance of the highestbid by the Board of Trustees was a must and the Trust reservedthe right to itself to reject the highest or any bid. This Court hasexamined the right of the highest bidder at public auctions in thecases of Trilochan Mishra v. State of Orissa34 , State ofOrissa v. Harinarayan Jaiswal35 , Union of India v. Bhim SenWalaiti Ram36 and State of Uttar Pradesh. v. Vijay BahadurSingh37 . It has been repeatedly pointed out that State orthe authority which can be held to be State within themeaning of Article 12 of the Constitution is not bound toaccept the highest tender or bid. The acceptance of thehighest bid is subject to the conditions of holding the publicauction and the right of the highest bidder has to beexamined in context with the different conditions underwhich such auction has been held. In the present case no righthad accrued to the respondent either on the basis of the statutoryprovision under Rule 4(3) or under the conditions of the sale whichhad been notified before the public auction was held.” (emphasisadded)54. Further, in CWE - Soma Consortium (supra), this Court hadheld as under :“23. The right to refuse the lowest or any other tender isalways available to the Government. In the case in hand, the34 (1971) 3 SCC 15335 (1972) 2 SCC 3636 (1969) 3 SCC 14637 (1982) 2 SCC 365M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH714SUPREME COURT REPORTS[2022] 12 S.C.R.respondent has neither pleaded nor established mala fide exerciseof power by the appellant. While so, the decision of the TenderCommittee ought not to have been interfered with by the HighCourt. In our considered view, the High Court erred in sittingin appeal over the decision of the appellant to cancel thetender and float a fresh tender. Equally, the High Courtwas not right in going into the financial implication of a freshtender.”(emphasis added)55. On the scope of judicial review in examining the decision ofthe tenderer to cancel the process if the tender document so permits, wemay usefully refer to Montecarlo Limited (supra), wherein it is hasbeen held as under :“26. ……. Exercise of power of judicial review would be calledfor if the approach is arbitrary or mala fide or procedure adoptedis meant to favour one. The decision-making process should clearlyshow that the said maladies are kept at bay. But where a decisionis taken that is manifestly in consonance with the languageof the tender document or subserves the purpose for whichthe tender is floated, the court should follow the principleof restraint. Technical evaluation or comparison by the courtwould be impermissible. The principle that is applied to scanand understand an ordinary instrument relatable to contract inother spheres has to be treated differently than interpreting andappreciating tender documents relating to technical works andprojects requiring special skills. The owner should be allowed tocarry out the purpose and there has to be allowance of free playin the joints.”(emphasis added)[Also refer : Sterling Computers Limited v. M/s M & NPublications Limited and Others38, Tata Cellular (Supra),Mauleshwar Mani and Others v. Jagdish Prasad and Others39,B.S.N. Joshi & Sons Limited v. Nair Coal Services Limitedand Others40, Jagdish Mandal v. State of Orissa and Others41,38 (1993) 1 SCC 44539 (2002) 2 SCC 46840 (2006) 11 SCC 54841 (2007) 14 SCC 517 ABCDEFGH715and Afcons Infrastructure Limited v. Nagpur Metro RailCorporation Limited and Another42]56. The Statute enjoins the Liquidator to sell the immovable andmovable assets of the Corporate Debtor in a manner that would result inmaximization of value, lead to a higher and quicker recovery for thestakeholders, cut short the delay and afford a guaranteed timeline forcompletion of the process. On examining the records, we find that thesewere the considerations that have weighed not only with the respondentNo.2 – Liquidator, but also with the stakeholders, who were unanimousin their decision that the Second Swiss Challenge Process Documentought to be abandoned in favour of the Private Sale process where notonly the appellant, but all the other prospective bidders who hadparticipated in the process were permitted by the Adjudicating Authority(NCLT) to make a bid in respect of the consolidated assets of theCorporate Debtor. In its anxiety to claim a vested right as an AnchorBidder, the appellant tends to forget that the Swiss Challenge Processadopted by the respondent No.2 – Liquidator also falls in the category ofa Private Sale, referred to in Schedule-I(2) under Regulation 33 of theLiquidation Regulations. For conducting a Private Sale, all that theLiquidator is required to do is to prepare a strategy to approach theinterested parties. He is authorized to directly liaise with the potentialbuyers to ensure that realization from the sale of the assets can bemaximized. We do not find any infirmity in the said approach adopted bythe respondent No.2 – Liquidator.57. When compared to the above protracted process described inpara 53 above, a single buyer for the Dahej land along with the metalscrap, etc., lying at the complex was bound to speed up the entire processinasmuch as the successful bidder could be handed over the possessionstraightaway and the respondent No.2 - Liquidator would be in a positionto receive the payment for the composite assets in a timebound mannerwith a higher rate of recovery. All these factors that fall in the realm ofcommercial considerations were examined holistically by the respondentNo.2 – Liquidator who then placed the cards before the stakeholders inthe meeting conducted on 6th August, 2021. Even though the provisionsof the IBC empower the Liquidator to take an independent decision forthe sale of the assets of the Corporate Debtor in liquidation, it can beseen that he has taken the stakeholders into confidence at every step.42 (2016) 16 SCC 818M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH716SUPREME COURT REPORTS[2022] 12 S.C.R.Only after finding them to be in agreement with the option sought to beexplored by him of halting the Second Swiss Challenge Process andproceeding with the Private Sale of the consolidated assets of theCorporate Debtor by directly liaising with the potential buyers, did therespondent No.2 – Liquidator take such a decision solely with the objectof augmenting realization from the sale of the assets. Thereafter, thematter was taken to the Adjudicating Authority (NCLT) for necessarypermissions under Section 35(1) of the IBC that was duly granted. Thedecision taken by the respondent No.2 – Liquidator cannot be treated asarbitrary, capricious or unreasonable for interference by this Court. Thesaid decision is tempered with sound reason and logic. It is a purelycommercial decision centered on the best interest of the stakeholders. The stakeholders having unanimously endorsed the view of the respondentNo.2 – Liquidator, it is not for this Court to undertake a further scrutinyof the desirability or the reasonableness of the said decision or substitutethe same with its own views.58. Therefore, we concur with the view expressed by the NCLATthat the decision of the respondent No.2 – Liquidator was driven by thedesire of the stakeholders to complete the liquidation process in theshortest possible time. Let us not forget that the aforesaid exercise ofselling the assets of the Corporate Debtor has been ongoing for aboutthree years, with several litigations spewed throughout to cause furtherdelay. The sooner the curtains are drawn on the process, the better itwould be for all concerned.59. It is for the very same reason that we are inclined to set asidethe subsequent directions issued by the NCLAT of restarting the entireprocess of Private Sale by issuing fresh notices to all the prospectivebuyers without limiting them to those who had participated in the process.No doubt, a public auction entails the procedure of issuing public notices. But that is not the case with a Private Sale where the procedure prescribedpermits the Liquidator to directly liaise with the potential buyer andconduct the negotiations. It may be emphasized that these are commercialtransactions and purely business driven decisions, which are not amenableto judicial review. The insolvency regime introduced under the IBC hasplaced fetters on the power of interference by the Adjudicating Authority(NCLT) and the Appellant Authority (NCLAT). The decision of the NCLTto have the sale of the composite assets negotiated with the parties whohad participated in the earlier rounds of sale, cannot be described as a ABCDEFGH717rushed decision for the NCLAT to have modified the said order anddirect that the clock be set back to the initial stage of issuing notices tothe prospective buyers. No such relief was sought by any of the partiesto the lis, nor has the NCLAT given any plausible reason for issuingsuch a direction.60. The powers vested in and the duties cast upon the Liquidatorhave been made subject to the directions of the Adjudication Authority(NCLT) under Section 35 of the IBC. Once the Liquidator applies to theAdjudicating Authority (NCLT) for appropriate orders/directions, including the decision to sell the movable and immovable assets of theCorporate Debtor in liquidation by adopting a particular mode of saleand the Adjudicating Authority (NCLT) grants approval to such a decision, there is no provision in the IBC that empowers the Appellate Authority(NCLAT) to suo motu conduct a judicial review of the said decision. The jurisdiction bestowed upon the Adjudicating Authority [NCLT] andthe Appellate Authority [NCLAT] are circumscribed by the provisionsof the IBC and borrowing a leaf from Committee of Creditors of EssarSteel India Limited v. Satish Kumar Gupta and Others43, they cannotact as a Court of equity or exercise plenary powers to unilaterally reversethe decision of the Liquidator based on commercial wisdom and supportedby the stakeholders. The Court has also observed in the captioned casethat “from the legislative history, there is contra-indication that thecommercial or business decisions of the financial creditors are notopen to any judicial review by the adjudicating authority or theappellate authority.’’ A similar reasoning has prevailed with Respondentin K. Sashidhar v. Indian Overseas Bank and Others44, Committeeof Creditors of Amtek Auto Limited v. Dinkar T.Venkatasubramanian and Others45, Kalpraj Dharamshi andAnother v. Kotak Investment Advisors Limited and Another.46,Ghanashyam Mishra And Sons Private Limited through theAuthorized Signatory v. Edelweiss Asset Reconstruction CompanyLimited through the Director and Others.47 and Jaypee KensingtonBoulevard Apartments Welfare Association and Others (Supra).Theaforesaid view will apply with equal force to any commercial or business43 (2020) 8 SCC 53144 (2019) 12 SCC 15045 (2021) 4 SCC 45746 (2021) 10 SCC 40147 (2021) 9 SCC 657M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.] ABCDEFGH718SUPREME COURT REPORTS[2022] 12 S.C.R.decision taken by the Liquidator for conducting the sale of the movable/immovable assets of the Corporate Debtor in liquidation. The AppellateAuthority cannot don the mantle of a supervisory authority for overseeingthe validity of the approach of the respondent No.2 – Liquidator in optingfor a particular mode of sale of the assets of the Corporate Debtor.61. In fact, it has been brought to our notice by the respondentNo.2 – Liquidator that close on the heels of the impugned judgmentpassed by the NCLAT delivered on 10th December, 2021, the CoreCommittee of Financial Creditors of the Corporate Debtor had conducteda meeting on 15th December, 2021 and had unanimously ratified theview of the respondent No.2 – Liquidator that the bid process commencedon 24th August, 2021, ought to be continued and not restarted havingregard to the fact that it had taken almost three years to find such buyersand the sale was at the cusp of being closed. It was also recorded in theminutes of the meeting that several attempts had already been made tosolicit interest from parties but none had come forward to make an offerfor the composite purchase of the assets. We may note that the CoreCommittee constitutes 70.3% of the financial creditors and when theyhave weighed in to support the stand taken by the respondent No.2 –Liquidator to continue the bid process commenced on 24th August, 2021,we do not see any reason to foist the view of the NCLAT on therespondent No.2 – Liquidator that he ought to restart the process forsale of the composite assets of the Corporate Debtor from the scratchafter issuing an open notice to the prospective buyers.CONCLUSION :62. Therefore, the impugned judgment dated 10th December, 2021,passed by NCLAT to the extent that it has modified the order dated 16thAugust, 2021 passed by the NCLT and directed restraining of the PrivateSale Process, is quashed and set aside. In our opinion, the Private Saleprocess of the composite assets of the Corporate Debtor should be takenfurther by the respondent No.2 – Liquidator without losing any furthertime and be concluded at the earliest. All the eligible bidders who havemade Earnest Money Deposits would be entitled to participate in thenegotiations to be conducted by the respondent No.2–Liquidator forprivately selling the consolidated assets of the Corporate Debtor. Accordingly, we direct that the process of private negotiations that hadcommenced on 24th August, 2021, shall be taken to its logical end and ABCDEFGH719brought to a closure by the respondent No.2 – Liquidator within fourweeks from the date of passing of this order.63. As a result, Civil Appeal No.7722 of 2021 filed by R.K.Industries fails and the same is dismissed along with I.A No. 166862/2021. Civil Appeal No.7731 of 2021 filed by Welspun is allowed on theafore-stated terms. Parties are left to bear their own costs. Pendingapplications, if any other than IA No. 166862/2021 shall stand disposedof. Divya PandeyAppeals disposed of.(Assisted by : Roopanshi Virang, LCRA)M/S. R.K. INDUSTRIES (UNIT-II) LLP v. M/S. H.R.COMMERCIALS PRIVATE LIMITED [HIMA KOHLI, J.]