2026 (1) TMI 430 - AT - IBC

E-auction bidding glitch claim after missed highest bid rejected; auction upheld as platform logs showed continuous participation and valid close.

The dominant issue was whether an e-auction should be set aside on the ground that the applicant was unable to submit the highest bid due to an alleged ... Application filled for setting aside the e-auction - technical glitch encountered during the e-auction process - unable to submit the highest bid due to technical failure on the auction website - HELD THAT:- Appellant’s case is that after receiving the confirmation mail, the Appellant participated in the e-auction. There is no proof of any contemporaneous complaint/ call or email pointing about the glitch. Furthermore, when the Appellant was participating with the other bidder in both the Lots, the Appellant submitted last but one bid after 04:00 PM in both the Lots and after the last bid submitted by the Appellant, the other bidder has increased its bid by Rs. 10 lakhs and Appellant failed to increase its bid after five minutes and after expiry of five minutes, the auction stood confirmed in favour of the other bidder. When the Appellant has been submitting competitive bids, till the very end of auction, the theory setup by the Appellant that he faced technical glitch in submitting the bids, is belied from the materials on record. The allegations made by the Appellant in his applications and materials brought on record did not raise any ground for setting aside the e-auction. Appellant had fully participated in the bid and submitted the bid even after period of two hours was over. The Appellant submitted his last but one bid also. Last bid being of the Successful Auction Purchaser and there was no further bid submitted by the Appellant within five minutes, the bid of another Auction Purchaser was accepted as successful bid. Thus, in the present case, there was no Technical Glitch as alleged by the Appellant. We have already noticed submissions of the parties and facts and have come to the conclusion that the Appellant failed to prove any technical glitch, since he has successfully participated in auction of both the Lots and has given several bids, which have been noticed by the Adjudicating Authority and by us. From the facts brought on record, the Adjudicating Authority has carefully examined the relevant materials and the materials which were produced by the e-platform, which has conducted the auction, which indicate that the Appellant was continuously participating in the bid till the last but one bid and hence, the submission of the Appellant that he faced technical glitch is unsubstantiated. The Adjudicating Authority did not commit any error in rejecting the IAs filed by the Appellant for quashing the e-auction held with respect to assets of Waseem Ahmad Khan and Farah Khan. We, thus, do not find any error in the impugned order passed by Adjudicating Authority in these Appeal(s) warranting interference in exercise of appellate jurisdiction. In result, both the Appeal(s) are dismissed. Issues: (i) Whether the Adjudicating Authority erred in rejecting the application seeking setting aside of the e-auction held on 01.05.2025 for assets of a bankrupt on the ground of alleged technical glitches on the e-auction platform; (ii) Whether the Adjudicating Authority erred in refusing to appoint a technical expert to examine the e-auction platform and to direct a re-auction.Issue (i): Whether the Adjudicating Authority erred in rejecting the application to set aside the e-auction on ground of alleged technical glitches.Analysis: The recorded bid history and system-generated reports showed continued participation by the applicant after the alleged time of glitch, including multiple bids submitted until shortly before the successful bids. The Adjudicating Authority relied on the audit trail demonstrating bids placed after the alleged malfunction and noted absence of any immediate contemporaneous complaint within the available five-minute extension windows. On that material, the Authority found the allegation of platform failure unsubstantiated and concluded the choice to increase bid lay with the bidder within the extension period.Conclusion: The issue is decided against the appellant and in favour of the respondent.Issue (ii): Whether the Adjudicating Authority erred in refusing to appoint a technical expert and in declining directions for a re-auction or technical report by the platform provider.Analysis: Precedents cited by the appellant involved different factual matrices where independent technical reports established system malfunction. On the available record here, the Adjudicating Authority found the platform's audit trail and transcripts sufficient to demonstrate continuous bidder activity and no identifiable platform failure. In light of those findings the Authority concluded there was no basis to appoint an independent technical expert or to order a re-auction.Conclusion: The issue is decided against the appellant and in favour of the respondent.Final Conclusion: The appellate challenge to the rejection of applications contesting the e-auctions for alleged technical glitches is dismissed on the ground that the material before the Adjudicating Authority did not substantiate platform failure or justify appointment of a technical expert or ordering a re-auction.