The Statutory Power
Section 343 empowers the liquidator to sell the company’s movable and immovable property, with the sanction of the NCLT where required. The liquidator may sell the assets as a going concern or on a piecemeal basis. The sale must be at fair value, and the liquidator must follow a transparent process.
The NCLT Approval
The NCLT’s approval is required where the sale is of a substantial asset, where the sale is to a related party, or where the liquidator seeks to dispense with the usual auction process. The liquidator should apply to the NCLT with the valuation report, the proposed sale terms, and the reasons for the proposed mode of sale.
The Fair Value Requirement
The liquidator must obtain a valuation from an independent valuer and must disclose the valuation to the NCLT. A sale at a price below the valuation requires a justification. A sale to a related party at a non-arm’s-length price is vulnerable to challenge by creditors or contributories.
The Transparency
The liquidator should invite public bids or follow a competitive process where the asset is of significant value. A private sale without a competitive process is permissible only where the NCLT is satisfied that it is in the best interests of the stakeholders.
Call to Action: For liquidator asset-sale approval, valuation review, or NCLT application drafting, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.