2022 (3) TMI 54 - Tri - Insolvency and Bankruptcy

Tribunal Upholds Liquidator's Actions in Property Purchase Case

Zio Homes Pvt. Ltd. Versus Amit Shah, Liquidator of Biodiversity Conservation (India) Pvt. Ltd. and Ors.

The Tribunal dismissed the applications filed by M/s. Zio Homes Private Limited, refusing the extension of time for completing the purchase of a property ... Seeking extension of time to the Applicant for completing the purchase under the LOI until such time the disputes in connection with the Disputed Extent are resolved and attained finality - waiver of interest purported to be imposed on the Applicant for any delay on payment of the balance consideration - whether the Liquidator was entitled to issue a letter of intent only for an extent of 45.21 Acres as against the total extent of 47.99 Acres as described in EOI process memorandum and all other subsequent correspondence? - HELD THAT:- On perusal of Various terms and clauses of the EOI process memorandum and other consequential documents and also the applicable provisions of the Code and Regulations made thereunder and accordingly there is no merit in both the Applications and that the Liquidator is fully empowered to issue the LOI to the part extent i.e., for 45.21 Acres forming part of the total extent of 47.99 Acres of the property. The Applicant failed to show any clause or term from any of the EOI Process memorandum or any provisions or Regulations of the IBC, which prohibits the Liquidator from issuing a LOI for an extent less than the extent shown in the EOI. Application dismissed. Issues:1. Extension of time for completing purchase under LOI2. Waiver of interest on delay in payment3. Other orders in the interest of justiceExtension of Time for Completing Purchase under LOI:The case involved M/s. Zio Homes Private Limited seeking an extension to complete the purchase of a property after being declared the successful bidder in an e-auction. The Applicant filed I.A. No. 83/2021 requesting time extension until resolution of disputes over the Disputed Extent of land. The Tribunal examined the circumstances, including the issuance of a Letter of Intent (LOI) only for a portion of the total land, and concluded that the Liquidator was empowered to issue the LOI for a part extent, dismissing the Applicant's plea for extension.Waiver of Interest on Delay in Payment:Additionally, M/s. Zio Homes Private Limited sought the waiver of interest purportedly imposed for any delay in payment of the balance consideration. The Tribunal scrutinized the terms of the EOI process memorandum, e-auction terms, and relevant regulations. It was determined that there was no illegality or arbitrariness in the Liquidator's actions, including directing the Applicant to accept the LOI unconditionally. The Tribunal found no merit in the Applicant's plea for interest waiver.Other Orders in the Interest of Justice:Furthermore, the Applicant filed I.A. No. 216/2021 seeking various directions, including acting on the confirmation of Expression of Interest auction price for the entire extent of the property. The Tribunal deliberated on the applicable provisions of the Insolvency and Bankruptcy Code (IBC) and related regulations. It was held that the Liquidator was within rights to issue the LOI for a lesser extent than initially described in the EOI process memorandum. Consequently, both I.A.'s were dismissed as the Tribunal found no merit in the Applicant's contentions.In conclusion, the Tribunal dismissed both applications, emphasizing that the Liquidator had acted within legal boundaries in issuing the LOI for a reduced extent of the property. The judgment underscored the importance of adhering to the terms outlined in the EOI process memorandum and relevant regulations, ultimately upholding the actions of the Liquidator in the e-auction process.