# In the matter of Manthan Broadband Services Pvt. Ltd. IA(IBC)-334-KB-2023 in C.P (IB) No.1634-KB-2018

> NCLT judgment dated 2023-02-14. Citation: TCN-2023-NCLT-04601. This case involves an application challenging an E-auction notice dated January 11, 2023,…

- **Court:** NCLT
- **Order date:** 14 Feb 2023
- **Citation:** TCN-2023-NCLT-04601
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/manthan-broadband-services-pvt-ltd-iaibc-334-kb-2023-in-cp-ib-no1634-kb-2018-9c03d001

## Summary

### Background

This case involves an application challenging an E-auction notice dated January 11, 2023, concerning the sale of shares of the corporate debtor, Alliance Broadband Services Pvt. Ltd., during liquidation. The applicants, who are members of the suspended board of directors of Manthan Broadband Services Pvt. Ltd., contend that they are guarantors to the Financial Creditors and that the failure to realize dues from the liquidation process would prejudice them. They argue that the majority shareholders of Alliance devised a stratagem to obtain the shareholding of Alliance by initiating CIRP against Manthan. They also claim that Alliance has not relinquished its security interest in the shares, making the sale a violation of regulations. The liquidator argues that the shares

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## Facts

Manthan Broadband Services Pvt. Ltd. (Corporate Debtor) is undergoing liquidation. Alliance Broadband Services Pvt. Ltd. is a financial creditor of Manthan. The applicants, who are members of the suspended board of directors of Manthan, challenged an e-auction notice for the sale of 77,500 shares of Alliance held by Manthan. The applicants claim that they are guarantors to the Financial Creditors and that the failure to realize dues from the liquidation process would prejudice them. They argue that Alliance has not relinquished its security interest in the shares, making the sale a violation of regulations. They also claim that the reserve price is undervalued. The liquidator contends that the pledge is over, Alliance has not proven its security interest, and the sale

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## Issues and analysis

### Issue 1: Whether the e-auction of shares of Alliance Broadband Services Pvt. Ltd. held by Manthan Broadband …

**Ratio:** The court has the power to allow or disallow the e-auction based on the principles of

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**Reasoning:** The court reasoned that a considerable time had lapsed since the liquidation order, and

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**Interpretation:** The court interpreted that delaying the liquidation process further would not

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**Application:** The court applied this reasoning to the specific facts of the case, where the

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Appellants:** Rajiv Dh…
- **Respondents:** Manthan Broadband…; Mr.Kuldeep Verma,…

## Timeline

- **2019-09-18 — CIRP Init…**: Manthan (Corporate Debtor) was…
- **2021-03-08 — CoC Deci…**: The CoC of Manthan…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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