Tribunal Upholds Dismissal of Bid Extension Request Due to Non-Compliance

The Tribunal upheld the Adjudicating Authority's decision to dismiss the appellant's request for an extension of time to make the balance payment as the successful bidder. The appellant's plea citing unforeseen circumstances, such as the backing out of investors and currency depreciation, was rejected due to non-compliance with the Bid Process Document terms and the Insolvency & Bankruptcy Code's strict timelines. The appeal was dismissed, and all related applications were closed.

---

---

Issues Involved:
1. Request for extension of time to make balance payment by the successful bidder.
2. Compliance with the terms of the Bid Process Document and Letter of Intent.
3. Consideration of unforeseen circumstances affecting the bidder's ability to pay.
4. Adherence to the timelines stipulated under the Insolvency & Bankruptcy Code, 2016.

Detailed Analysis of the Judgment:

1. Request for Extension of Time to Make Balance Payment by the Successful Bidder:
The appellant, as the successful bidder, requested an extension of time to make the balance payment due to unforeseen circumstances, including the backing out of international investors and the sharp depreciation of Myanmar currency. The appellant had already paid Rs. 14,94,23,947 but was unable to disburse the remaining purchase consideration within the stipulated time. The Stakeholders' Consultation Committee (SCC) had rejected this request, and the appellant was not present at the relevant meeting despite being informed via email and telephone.

2. Compliance with the Terms of the Bid Process Document and Letter of Intent:
The Bid Process Document and the Letter of Intent (LoI) explicitly stated that the payment of the sale consideration by the successful bidder should be made within 90 days with interest or 30 days without interest. The appellant's plea for an extension was not countenanced due to the clear terms of the Bid Process Document, which did not allow for further extensions beyond the stipulated timelines. The appellant had defaulted in fulfilling the terms of the LoI for the second time, leading to the forfeiture of the amount paid and the cancellation of the LoI.

3. Consideration of Unforeseen Circumstances Affecting the Bidder's Ability to Pay:
The appellant cited unforeseen circumstances, such as the backing out of international investors and the depreciation of Myanmar currency, as reasons for the inability to make the balance payment. Despite these claims, the economic hardship in performance of a contract does not render it impossible to perform. The parties to the contract cannot escape their obligations due to changes in the economic scenario. The Liquidator had issued multiple communications to the appellant, urging the payment, but the appellant failed to comply.

4. Adherence to the Timelines Stipulated Under the Insolvency & Bankruptcy Code, 2016:
The Insolvency & Bankruptcy Code, 2016 emphasizes the importance of adhering to strict timelines to ensure the maximization of the value of assets and to avoid depreciation. The appellant's request for an extension of time was not in line with the essence of the Code, which aims for speedy resolution. The Tribunal highlighted that the Code is an inbuilt and self-contained code where speed is the essence. The appellant's failure to adhere to the timelines undermined the objective of the Code.

Conclusion:
The Tribunal, after considering the facts and circumstances of the case, upheld the decision of the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench, Court No.II) to dismiss the appellant's request for an extension of time. The Tribunal found no legal flaws in the impugned order dated 12.10.2022 and concluded that the appellant's plea could not be acceded to. Consequently, the appeal was dismissed, and all connected interlocutory applications were closed.

---