Tribunal upholds auction cancellation, penalties imposed, fresh auctions ordered

The Tribunal upheld the cancellation of 'Chhota's' auction and directed fresh auctions for the assets. 'Chhota' faced a penalty with the forfeiture of 10% of the bid amount, while 'Singhi Infrapower' was given a final opportunity to deposit the balance amount. The Tribunal ensured compliance with liquidation regulations and the Adjudicating Authority's directives, dismissing 'Chhota's' applications for recall and review.

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Issues Involved:
1. Liquidation Proceedings and E-Auction of the Corporate Debtor's Assets
2. Payment and Possession Issues by the Highest Bidder
3. Missing Parts and Machinery Allegations
4. Fresh Auction and Forfeiture of Deposits
5. Intervention by Third Parties
6. Compliance with Adjudicating Authority's Orders

Detailed Analysis:

1. Liquidation Proceedings and E-Auction of the Corporate Debtor's Assets:
The Corporate Debtor, 'Haridwar Iron and Ispat Rollings Ltd.', was admitted to insolvency on 22.05.2018, and liquidation was directed on 17.09.2019. The Liquidator conducted multiple e-auctions. The fifth e-auction on 12.10.2020 saw 'Chhota' as the highest bidder for plant and machinery, while the sixth e-auction on 27.11.2020 saw 'Singhi Infrapower Projects Pvt. Ltd.' as the highest bidder for land and building.

2. Payment and Possession Issues by the Highest Bidder:
'Chhota' was issued a letter of intent on 22.10.2020 and made the balance payment on 31.01.2021. A Sale Certificate and Letter of Possession were issued on 02.02.2021, with a deadline to lift the material by 21.03.2021. Despite reminders, 'Chhota' did not remove the machinery, resulting in the Liquidator seeking directions from the Adjudicating Authority.

3. Missing Parts and Machinery Allegations:
'Chhota' raised concerns about missing parts and machinery on 19.02.2021 and filed a police complaint. The Liquidator refuted these claims, emphasizing that the sale was on an "as is where is" basis. The Adjudicating Authority found no merit in 'Chhota's' allegations and upheld the terms of the sale.

4. Fresh Auction and Forfeiture of Deposits:
Due to 'Chhota's' failure to remove the machinery, the Adjudicating Authority directed a fresh auction and forfeiture of the deposit if the machinery was not removed within a week. The Liquidator complied, and the auction in favor of 'Chhota' was canceled. The Tribunal upheld this decision, directing the forfeiture of 10% of the bid amount (Rs.41 Lakhs) and refund of the balance subject to conditions.

5. Intervention by Third Parties:
'Sunhill Proptech Private Limited' sought to intervene, offering Rs.4.25 crore for the plant and machinery. The Tribunal directed a fresh auction as per liquidation regulations, rejecting the direct sale to 'Sunhill Proptech'.

6. Compliance with Adjudicating Authority's Orders:
The Tribunal upheld the Adjudicating Authority's orders dated 28.01.2022 and 16.02.2022, dismissing 'Chhota's' applications for recall and review. 'Singhi Infrapower' was directed to deposit the balance amount within one month, failing which their deposit would be forfeited, and a fresh auction for land and building would be conducted.

Conclusion:
The Tribunal disposed of both appeals, upholding the cancellation of 'Chhota's' auction and directing fresh auctions for the assets. 'Chhota' was penalized with the forfeiture of 10% of the bid amount, while 'Singhi Infrapower' was given a final opportunity to deposit the balance amount. The Tribunal ensured compliance with liquidation regulations and the Adjudicating Authority's directives.

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