Section 74 not attracted: liquidator may forfeit EMD and consideration under clear tender terms in liquidation sale SC upheld the NCLAT order sustaining the Liquidator's power to forfeit the EMD and part consideration under the express terms of the tender document in a ...
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Section 74 not attracted: liquidator may forfeit EMD and consideration under clear tender terms in liquidation sale
SC upheld the NCLAT order sustaining the Liquidator's power to forfeit the EMD and part consideration under the express terms of the tender document in a liquidation sale. It rejected the appellant's contention that such forfeiture was in the nature of penalty recoverable only by an independent action under Section 74 of the Contract Act, holding that the contractual stipulation validly authorized forfeiture on the bidder's default. Allegations of defect in the corporate debtor's title and suppression of material information by the Liquidator were not accepted as grounds to invalidate the forfeiture. The appeal was dismissed.
The Supreme Court, exercising its appellate jurisdiction, declined to interfere with the order dated 28 April 2023 passed by the National Company Law Appellate Tribunal (NCLAT) in Company Appeal (AT) (Insolvency) No. 1258 of 2022. The Court held that it found "no reason to interfere with the impugned order," thereby affirming the NCLAT's decision in the insolvency proceedings. Consequently, the Civil Appeal was dismissed. The Court further directed that all pending applications, if any, stand disposed of, bringing the entire appellate and ancillary proceedings in this matter to a close.
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