2. In Kineta Global Limited v. IDBI Bank Limited (Company Appeal (AT) (CH) (Ins) No.302/2021 (IA Nos.639/2021, 641/2021, 640/2021, 97/2022, 340/2022, 622/2022, 92/2022, 942/2022, 1052/2022 & 417/2023), the NCLAT had an opportunity to examine the interplay between section 230 of the Companies Act and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Liquidation Process Regulations”) provisions, in the context of a scheme of arrangement being undertaken during liquidation.
While noting that a scheme being undertaken during liquidation would need to adhere to the procedure mentioned in section 230 of the Companies Act, including the requirement to obtain the approval of 75% of the creditors, the NCLAT upheld the primacy of valuation norms prescribed under the Liquidation Process Regulations by observing that, the requirement of obtaining valuation report from one valuer for a scheme under section 230 of the Companies Act, cannot be the basis to bypass the requirement of obtaining valuation from two valuer under regulation 35 of Liquidation Process Regulations.
Apart from observing that title related dispute does not justify ascribing a NIL value to a property over which the corporate debtor stakes a claim, NCLAT held that where the valuation was not conducted as per the Code, a H1 bidder would not qualify as ‘aggrieved person’ under section 61 of the Code. Separately, the NCLAT had also highlighted the requirement of maintaining confidentiality of such valuation report.
Finally, it was observed that a secured creditor, who is not a member of stakeholder consultation committee on account of non-relinquishment of security could maintain an appeal against an order sanctioning a scheme under section 230 of the Companies Act.
Source: Barandbench
