The National Company Law Appellate Tribunal has dismissed an application challenging the fresh auction of the assets of steel roll maker Gontermann-Peipers India Ltd, paving the way for aspirants such as JSW Steel to participate in the sale.
The appellate body upheld an earlier order passed by the Calcutta bench of the Tribunal which had struck down the previous bid on the ground of ‘material irregularity’ in conducting the e-auction process.
The liquidator had approved a Rs 88-crore bid placed by a city-based realtor for the 25.35-acre prime plot near Joka on Diamond Harbour Road.
JSW Steel and a few others disputed the process and demanded a re-auction. During the Bengal Global Business Summit in April, JSW Group chairman Sajjan Jindal had said that he plans to build a world class roll manufacturing unit in Bengal. He did not name GPI as the matter was sub-judice.
Sources in JSW Group indicated JSW Steel Ltd, which was one of the parties in the NCLAT proceeding, would be keen to participate in the fresh auction if and when that happens. However, India’s second largest private steel producer, may have to wait as the Appellate’s order could be challenged.
Raj Singhania, official liquidator of GPI, said he was aggrieved by the orders of both the NCLT and NCLAT as he has duly followed the process laid down in law.
“None of the rules or regulations have been violated. So how can there be any material irregularity?” Singhania asked on Thursday.
He plans to consult his advocate to decide on the next course of action which includes filing an appeal against the NCLAT order before the Supreme Court after vacation.
Snaefell Heights LLP, an entity linked to Calcutta-based real estate group Srijan Realty, could not be reached for comment but at least one source pointed out that it may also prefer an appeal before the apex court.
“…the adjudicating authority rightly held that the liquidator committed material irregularity in conducting e-auction of ‘corporate debtor’ and failed to realise the maximum price on account of such irregularity,” the bench comprising Justice Ashok Bhushan, chairperson of NCLAT, Justice M. Satyanarayan Murthy (member judicial) and Barun Mitra (member technical), wrote in the judgment delivered on September 30.
GPI, which was promoted by Pramod and Vinod Mittal, was put up for auction as a ‘going concern’ as part of the liquidation process.
Initially, the e-auction was scheduled on September 9, 2021 and the submission of earnest money deposit and inspection of the asset on September 7. The liquidator extended the time for submission of EMD and e-auction by four more days in the hope of attracting more participants.
The Tribunal appears to point out to the fact that while dates were extended for submission of EMD and e-auction, the dates for inspection as fixed in the original notification remained the same.
“On account of failure to fix date and time for inspection of ‘corporate debtor’ by the interested bidders before conducting the auction, the possibility for submission of documents of EMD to participate in the e-auction would not arise normally, thereby the questions of maximisation doesn’t arise hence it is a matter of serious material irregularity, which vitiates the entire e-auction process,” the judgement read.
JSW Steel had earlier evinced interest when GPI, which makes rolls used by the steel companies, was going through a corporate insolvency resolution process. A conditional offer by JSW was rebuffed by the creditors of GPI, which was subsequently sent for liquidation.
