2023 (4) TMI 877 - AT - Insolvency and Bankruptcy

Tribunal Upholds Decision on Property Auction Appeal, Emphasizes Payment Timelines

ASJ Finsolutions Pvt. Ltd. Versus Best Foods Ltd. Through Liquidator & Ors.

The Tribunal upheld the Adjudicating Authority's decision to reject the Appellant's application for claiming chain documents of a property sold through ... Rejection of application claiming the chain documents of the property sold to the Appellant through e-auction process for verification before balance sale consideration - HELD THAT:- Admittedly, the Appellant was the successful bidder of the property mentioned at Item No.5 in the e-auction document. The Liquidator sent a communication on 16.11.2021 informing the Appellant that Appellant is the successful bidder and is required to deposit amount as per the Liquidation Regulation, 2016. The submission of learned counsel for the Appellant that there was dispute raised with regard to the property in filing a Writ Petition and Suit, there was a bonafide litigation regarding title of the property and original sale deed have not shown to it. The Appellant having not deposited the balance amount within the time allowed, the Adjudicating Authority did not commit any error in rejecting the application filed by the Appellant. Appeal is dismissed. Issues involved:The judgment involves the rejection of an application by the Adjudicating Authority for claiming chain documents of a property sold through e-auction, the dispute regarding the balance sale consideration amount, and the failure of the successful bidder to deposit the balance amount within the specified timeline.Details of the judgment:1. The Appellant filed an appeal against the order rejecting their application for claiming chain documents of a property sold through e-auction. The Adjudicating Authority admitted the Company Petition in 2018, leading to the order of Liquidation in 2021. The Appellant, declared as the highest bidder, failed to deposit the balance amount within the stipulated time, resulting in the rejection of their application by the Adjudicating Authority.2. The Appellant argued that due to a Writ Petition filed in the Punjab and Haryana High Court regarding the property's title, they had not deposited the balance amount as the original sale deed had not been provided to them.3. The Liquidator contended that the Appellant, as the successful bidder, was obligated to deposit the balance amount within the specified timeline, as per the e-auction notice which included details of any litigation related to the property. The Liquidator asserted that the Appellant's failure to deposit the balance amount was unjustified.4. The Tribunal considered the arguments presented by both parties and examined the case records.5. The Tribunal noted that the Appellant was indeed the successful bidder for the property in question as per the e-auction document. Despite the Appellant's claim of a dispute regarding the property's title due to ongoing litigation, the e-auction notice had provided details of the property, including the litigation information.6. The Tribunal emphasized that the presence of third-party litigation or disputes over the property's title could not justify the Successful Bidder's failure to deposit the balance amount within the statutory timeline specified in the Liquidation Regulation, 2016. Referring to a previous case, the Tribunal highlighted the mandatory nature of the payment timeline and upheld the Adjudicating Authority's decision to reject the Appellant's application.7. Concluding that the Adjudicating Authority did not err in rejecting the Appellant's application due to non-compliance with the payment deadline, the Tribunal dismissed the appeal.8. The Liquidator informed that the property would be re-auctioned, providing the Appellant with an opportunity to participate if they meet the necessary conditions.