# In the matter of Rathna Stores Pvt. Ltd. MA-779-2019 in CP-608-IB-2017

> NCLT judgment dated 2019-08-21. Citation: TCN-2019-NCLT-01886. The case involves an MA filed by the Liquidator of M/s. Rathna Stores Private Limited under…

- **Court:** NCLT
- **Order date:** 21 Aug 2019
- **Citation:** TCN-2019-NCLT-01886
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rathna-stores-pvt-ltd-ma-779-2019-in-cp-608-ib-2017-fc8e71d7

## Summary

### Background

The case involves an MA filed by the Liquidator of M/s. Rathna Stores Private Limited under Section 35(1)(f) of the Insolvency & Bankruptcy Code, 2016, seeking permission to conduct a private sale of the company's property. The liquidator was unable to find a bidder through two e-auctions, leading to the application for private sale permission. The reserve price for the e-auction was set at ₹31 Crores. Two proposed purchasers, M/s. Kalyan Silks and M/s. Accord Hotel, raised issues relating to income-tax attachment and deficiencies of documents, and did not participate in the bidding.

## Facts

M/s. Rathna Stores Private Limited is undergoing liquidation. The liquidator, V. Venkata Sivakumar, filed an MA seeking permission to conduct a private sale of the company's property under Section 35(1)(f) of the Insolvency & Bankruptcy Code, 2016. Two e-auctions were conducted, but no bidders participated due to issues raised by proposed purchasers regarding income-tax attachment and document deficiencies. The reserve price for the e-auctions was ₹31 Crores. Mr. Maharajan of Velavan Stores agreed to purchase the property for ₹27.60 Crores and advanced ₹2.76 Crores. The liquidator entered into an agreement of sale with Velavan Stores without prior permission from the court. The proposed sale price represents 86% of the reserve price. The liquidator consulted with

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## Issues and analysis

### Issue 1: Whether the Liquidator can be granted permission to conduct a private sale of the property of M/s. …

**Ratio:** The court can grant permission for a private sale if the liquidator has made sufficient

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**Reasoning:** The court reasoned that the liquidator had made efforts to conduct e-auctions, but no

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**Interpretation:** Section 35(1)(f) of the Insolvency & Bankruptcy Code, 2016, allows the

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**Application:** The court applied the ratio to the facts of the case, noting that the

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** V VENKATASIVAKUMAR…
- **Respondents:** RATHNA STORES PVT…; VELAVAN S…
- **Advocates:** S. Sathiyanarayana…

## Timeline

- **2019-01-25 — Public Announcement of…**: Liquidator issued a public announcement of e-auction as stated under Regulations 12(3) of…
- **2019-02-11 — First E-Aucti…**: Fixed e-auction date as 11.02.2019. Nobody…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 35(1) — Powers and duties of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-35)

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