# In the matter of Power Mech Projects Ltd. vs. Essar Power (Jharkhand) Ltd. & Ors.

> NCLAT judgment dated 2025-02-04. Citation: TCN-2025-NCLAT-00238. The appeal challenges the order dated 11.12.2024 passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 4 Feb 2025
- **Citation:** TCN-2025-NCLAT-00238
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/power-mech-projects-ltd-vs-essar-power-048dafe8

## Summary

### Background

The appeal challenges the order dated 11.12.2024 passed by the National Company Law Tribunal (NCLT), Principal Bench, which allowed IA No. 5745 of 2024 filed by the Liquidator seeking permission to sell the Corporate Debtor (CD), Essar Power (Jharkhand) Ltd., as a going concern through a private sale method. The Adjudicating Authority had allowed the application, leading to the current appeal.

## Facts

1. Liquidation process commenced against Essar Power (Jharkhand) Ltd. on 03.01.2020, and a liquidator was appointed.
2. The liquidator initiated e-auction process for sale of the Corporate Debtor's (CD) assets, but only two residential units were sold after 21 e-auctions.
3. Orissa Alloy Steel Pvt. Ltd. (OASPL) submitted an offer dated 26.09.2024 to acquire the CD as a going concern, excluding assets at Kolkata Port Trust (KoPT), for Rs. 67 crores.
4. The Stakeholder's Consultation Committee (SCC) met on 30.09.2024 and directed the Liquidator to negotiate with OASPL to increase its offer.
5. On 01.10.2024, OASPL increased its offer to Rs. 73 crores and requested the Right of First Refusal (RoFR) if a Swiss Challenge Mechanism was adopted.
6. The SCC approved OASPL's revised

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in allowing the Liquidator to proceed with a Swiss …

**Ratio:** The Liquidator has the power to sell the assets of the Corporate Debtor through an

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**Reasoning:** The tribunal reasoned that the Swiss Challenge Mechanism was approved by the

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**Interpretation:** The Swiss Challenge Mechanism is interpreted as a method for discovering the

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**Application:** The tribunal applied the ratio to the facts by noting that the Liquidator filed

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** M/s. Power Mech…
- **Respondents:** Essar Power…
- **Advocates:** Abhijeet…; Gaichangpov…; +7 more

## Timeline

- **2020-01-03 — Liquidation C…**: Liquidation process commenced…
- **2024-04-24 — 18th E-Au…**: Upto 18th e-auction held, only two…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 35 — Powers and duties of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-35)

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