Appeal partially allowed, cost reduced to Rs.2 Lakhs under Insolvency & Bankruptcy Code.

The appeal against the order imposing a cost of Rs.9 Lakhs on the Appellant for misconceived litigation under Section 61 of the Insolvency and Bankruptcy Code, 2016 was partly allowed. The Tribunal acknowledged concerns of frivolous litigation but reduced the cost to Rs.2 Lakhs in the interest of justice. The Appellant's conduct in challenging eligibility criteria after participating in the bidding process was criticized, leading to the imposition of the reduced cost to be paid within one week.

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Issues:
Appeal against Impugned Order imposing cost of Rs.9 Lakhs on Appellant for misconceived litigation under Section 61 of the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. The Appellant challenged the imposition of a cost of Rs.9 Lakhs by the Adjudicating Authority as arbitrary, citing Rule 149 of the NCLT Rules 2016 and arguing that the cost should be set aside. The Appellant participated in a bid for auctioning properties of the Corporate Debtor in Liquidation, but faced rejection based on turnover and net worth criteria. The Liquidator allowed the Appellant to bid for one property after subsequent emails and communications. The Appellant contended that the Adjudicating Authority erred in imposing the cost without considering the Appellant's eligibility for at least one property.

2. The Respondent/Liquidator maintained that the Appellant was eligible for one property only and had multiple opportunities to prove eligibility. The Liquidator allowed the Appellant to bid for one property, but the Appellant filed an application seeking to cancel the bid on the day of the bid. The Respondent argued that the Appellant's contention regarding bid terms and eligibility criteria was misconceived, as the Liquidator had the authority to modify bid terms to maximize stakeholder value. The Respondent asserted that the Adjudicating Authority was justified in imposing the cost of Rs.9 Lakhs.

3. The documentary evidence revealed that the Appellant disputed the pre-bidding qualification binding bidders and sought relief under the eligibility criteria in the tender document. The Appellant's conduct in challenging eligibility criteria after participating in the bidding process was deemed misconceived. The Adjudicating Authority criticized the Appellant for wasting time and energy by engaging in frivolous litigation, leading to the imposition of the cost.

4. The Tribunal acknowledged the Adjudicating Authority's concerns regarding frivolous litigation but reduced the cost from Rs.9 Lakhs to Rs.2 Lakhs in the interest of justice. The Appeal was partly allowed, modifying the cost to be paid within one week. The Tribunal directed the Registry to upload the Judgment on the Tribunal's website and provide a copy to the Adjudicating Authority promptly.

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