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Potens Transmission And Power Pvt Ltd. Vs. Gian Chand Narang - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (12 May 2022)

Ninety days period provided for making the deposit is the maximum period under which the Auction Purchaser had to make the deposit

MANU/NL/0313/2022

Insolvency

Present Appeal has been filed against the Order passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi,). The Adjudicating Authority has allowed the application filed by the Liquidator and observed that, Adjudicating Authority is left with no option but to allow the Application of Liquidator cancelling the sale of the Corporate Debtor in favour of the Auction Purchaser, in view of the failure of Auction Purchaser to make payment in terms of 2nd proviso to Clause 1(12) under Schedule I of the Liquidation Process Regulations, 2016.

According to Liquidation Process Regulations, 2016, it is clear that 90 days' period provided for making the deposit is the maximum period under which the Auction Purchaser had to make the deposit. 2nd Proviso of the Item 12 of the Schedule I provided that sale shall be cancelled if the payment is not received within 90 days. When the Consequence of non-compliance of the provision is provided in the statute itself, the provision is necessary to be held to be mandatory. Item 12 provides that, payment is to be made within 90 days and with interest after 30 days at the rate of 12 percent. Non-compliance of 2nd Proviso, sale shall be cancelled, if the payment is not received within 90 days.

The Adjudicating Authority has rightly observed that in view of the Appellant having not made payment in 90 days, Adjudicating Authority has no option except to allow the Application filed by the Liquidator for cancellation of the sale. The action taken by the Adjudicating Authority is in accordance with the statutory provisions. There is no merit in the submissions of Learned Counsel for the Appellant. No error has been committed by the Adjudicating Authority in passing the Impugned Order by allowing the Application filed by the Liquidator and closing the Applications filed by the Appellant. Appeal dismissed.

Tags : PAYMENT   FAILURE   TIME PERIOD  

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