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The National Company Law Tribunal, Kolkata Bench, has ordered liquidation of Gujarat NRE Coke on a slump sale basis. The order was passed on Thursday.
The resolution professional for the Corporate Insolvency Resolution Process (CIRP), Sumit Binani, has been appointed the liquidator. In case of difficulty in the process of liquidation, Binani will be guided by the decision of the monitoring committee which comprises erstwhile members of the committee of creditors.
Sources pointed out that normally a company is discharged overnight. So it is first shut down and then sold.
Liquidation on a slump sale was being done so that it is sold as a "going concern". On the one hand, it was mostly likely to fetch a higher prices while on the other, the livelihoods of 1,178 workers on the company's payrolls would be protected.
The order states that Section 32, Chapter VI of the Insolvency and Bankruptcy Board of India (IBBI), (Liquidation Process) Regulation 2016, provides that the manner of sale can be on a standalone basis or in a slump sale. If the order is passed under Section 33(7) that the order of liquidation will be deemed to be a notice of discharge to the officers, employees and workers of the corporate debtor, then indeed 1,178 employees will be out of employment in one go.
Workers had filed an affidavit which said that by discharging 1,178 employees, their families, numerous small vendors, suppliers, contractors, job workers, and transporters of the company totalling about 10,000 would be affected. They had requested for a slump sale of the assets of the company including all its assets and properties as a going concern.
Workers had submitted a resolution plan on December 30 but it could not be considered due to paucity of time. Prior to the committee of creditors had rejected a sole bid from Rare ARC.
The court has granted 10 weeks for conducting the sale.