Supreme Court clears auction of Samrudhhi Realty assets to recover Rs 5,000 cr debt
Supreme Court on Tuesday gave a go ahead to the liquidator to conduct auction of the assets of Samrudhhi Realty to recover debt of around Rs 5,000 crore.
However, a bench led by Justice Abhay S Oka said that if an auction of any of the assets of Essel Finance Advisors and Managers LLP is conducted, it will be subject to the final outcome of the appeal.
Essel Finance had challenged the NCLAT's order that «erroneously» dismissed its appeal and upheld the NCLT's May 2024 order directing it to defray their portion of the liquidation process costs.
The company, which operates as an investment manager to undertake fund management activities, had subscribed to redeemable secured non-convertible debentures from debt-laden Samrudhhi Realty, which was admitted to insolvency resolution process in April 2019 and to liquidation in May 2020.
The dispute allegedly arose out of the demands raised by the liquidator against Essel to defray the liquidation process costs and relinquish the security created in favour of the latter in the assets of the corporate debtor.
During the liquidation, Essel had filed a claim for Rs 123.57 crore as on liquidation commencement date and had chosen to stand out of the liquidation estate and realize its security interest in the assets of Samrudhhi on its own, the appeal stated.
The liquidator has not been forthcoming to provide the details of the sale and valuation and had raised “exorbitant” demands of Rs 5.71 crore as the share that is due from Essel towards liquidation cost, senior counsel
