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Issues: (i) Whether the resolution applicant could be directed to furnish the balance performance security within an extended time and face forfeiture of the amounts already deposited on default; (ii) Whether the resolution applicant could be required to match the revised bid offered by the H-2 bidder and whether the H-2 bidder's offer could be considered if default continued.
Issue (i): Whether the resolution applicant could be directed to furnish the balance performance security within an extended time and face forfeiture of the amounts already deposited on default.
Analysis: The resolution plan had already been approved, but the applicant had repeatedly failed to furnish the balance performance security despite extensions and accommodations. The Bench held that the applicant was bound by the original bid terms and that the delay had materially hampered the time-bound insolvency process. It therefore directed deposit of the performance guarantee within one month to the satisfaction of the Committee of Creditors and held that, on further default, the earlier deposit of Rs. 10 lakhs and the partial performance security of Rs. 1 crore would stand forfeited.
Conclusion: The issue was decided against the defaulting resolution applicant and in favour of the applicant seeking enforcement of the security obligations.
Issue (ii): Whether the resolution applicant could be required to match the revised bid offered by the H-2 bidder and whether the H-2 bidder's offer could be considered if default continued.
Analysis: The Bench held that the original bid could not be reopened merely because the H-2 bidder later offered a higher amount, as requiring the H-1 bidder to match the revised bid would be contrary to the settled contractual framework. At the same time, if the H-1 bidder failed to comply with the extended security requirement, the Committee of Creditors was directed to negotiate with the H-2 bidder in a time-bound manner, and the pending approval applications could be withdrawn.
Conclusion: The demand to match the revised H-2 bid was rejected, while consideration of the H-2 offer on future default was permitted.
Final Conclusion: The order enforced the H-1 bidder's original obligations under the approved plan, declined reopening of the bid on the basis of a later higher offer, and preserved a fallback route through the H-2 bidder if default persisted.
Ratio Decidendi: A resolution applicant is bound by the approved plan and its original bid terms, and a later higher third-party offer does not justify reopening the concluded bid process, though default in furnishing agreed security may trigger forfeiture and consideration of an alternate bidder within the time-bound insolvency framework.
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