# In the matter of V.S. Palanivel vs. P. Sriram, CS, Liquidator, Etc

> SC judgment dated 2024-08-28. Citation: TCN-2024-SC-00035. The appellant, V.S. Palanivel, filed appeals against the judgment and order dated September 16,…

- **Court:** SC
- **Order date:** 28 Aug 2024
- **Citation:** TCN-2024-SC-00035
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/vs-palanivel-vs-p-sriram-cs-liquidator-etc-51a0261b

## Summary

### Background

The appellant, V.S. Palanivel, filed appeals against the judgment and order dated September 16, 2022, passed by the National Company Law Appellate Tribunal, Chennai Bench, in three Company Appeals. These appeals arose from orders related to the liquidation of Sri Lakshmi Hotel Private Limited, including challenges to auction proceedings and the extension of time granted to the auction purchaser for depositing the balance sale consideration. The initial application by the financial creditor under Section 7 of the IBC was admitted on February 28, 2019, leading to the appointment of a Liquidator after no resolution plan was received. The Liquidator then conducted an auction of the company's assets, which the appellant contested on multiple grounds, including

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## Facts

Sri Lakshmi Hotels Private Limited, a family-held concern, purchased an immovable property in Tiruchirappalli. In 2006, the company took a loan of ₹1,57,25,000/- from a financial creditor. Disputes arose, leading to an arbitral award in favor of the financial creditor. The company challenged the award, but the petition was dismissed. On non-payment, the financial creditor filed an application under Section 7 of the IBC, which was admitted on February 28, 2019. No resolution plan was received, and the Committee of Creditors recommended liquidation. The Liquidator engaged valuers, arriving at an average liquidation value of ₹39,41,28,500/-. An auction was scheduled, but no bids were received. The reserve price was reduced by 25%, and M/s KMC Speciality Hospitals (India)

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## Issues and analysis

### Issue 1: Whether the Tribunal failed to appreciate that the auction conducted by the Liquidator was in …

**Ratio:** Regulation 31A requires a Liquidator to constitute a Stakeholders' Consultation Committee

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**Reasoning:** The court reasoned that the liquidation process in respect of the company had commenced

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**Interpretation:** Regulation 31A requires a Liquidator to constitute a Stakeholders' Consultation

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**Application:** In the present case, the liquidation process in respect of the company had

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## Parties

- **Judges:** HIMA K…
- **Appellants:** V.S. Pala…
- **Respondents:** Lakshmi Hotels…; P. SRIRAM, CS,…

## Timeline

- **2006-01-01 — Loan from Financial…**: Sri Lakshmi Hotels Private Limited took a loan from a financial creditor to the tune of…
- **2014-12-27 — Arbitral…**: The Arbitral Tribunal passed an award for a sum of ₹2,21,08,244/- in favour of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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