ASJ Fin solutions Private Limited vs. Best Foods Ltd & Ors - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (21 Apr 2023)

Fact of litigation and suit by certain parties in the property cannot be ground for the Successful Bidder of not making payment of balance amount

MANU/NL/0359/2023

Insolvency

Present Appeal has been filed against the order passed by the Adjudicating Authority by which order application filed by the Appellant for issuing direction to the Liquidator for claiming the chain documents of the property sold to the Appellant through e-auction process initiated vide notice for verification before balance sale consideration amounting to Rs.19,17,00,000 be paid, has been rejected.

Admittedly, the Appellant was the successful bidder of the property mentioned at Item No.5 in the e-auction document. The Liquidator sent a communication informing the Appellant that Appellant is the successful bidder and is required to deposit amount as per the Liquidation Regulation, 2016. The submission of learned counsel for the Appellant that there was dispute raised with regard to the property in filing a Writ Petition and Suit, there was a bonafide litigation regarding title of the property and original sale deed have not shown to it.

The factum of litigation by Writ Petition in High Court by a third party and suit by certain parties in the property cannot be ground for the Successful Bidder of not making payment of balance amount. The balance amount was to be deposited within the time as required in Schedule-I of Liquidation Regulation, 2016. This Appellate Tribunal while considering provisions of the Schedule-I of the Liquidation Regulation, 2016 in Potens Transmissions & Power Pvt. Ltd. vs. Gian Chand Narang" has laid down that, the said timeline is statutory.

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. Present Court do not find any merit in the submissions of Learned Counsel for the Appellant. The Appellant having not deposited the balance amount within the time allowed, the Adjudicating Authority did not commit any error in rejecting the application filed by the Appellant. Appeal dismissed.

Tags : E-AUCTION PROCESS DOCUMENTS DIRECTION