TaxTMI 
TaxTMI 
2022 (6) TMI 497
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....ivate Limited commenced under Section 9 of IBC, 2016 on 03.12.2018. Pursuant to which the Respondent herein was appointed as the IRP. Liquidation of the Corporate Debtor was ordered on 14.06.2019 in MA/559/2019 and the Respondent was appointed as the Liquidator of the Corporate Debtor. 2. It is submitted that on 16.03.2020 the movable assets of the Corporate Debtor were sold by the Respondent in e-auction for an amount of Rs. 107.01 lakhs. The Applicant is the sole Financial Creditor of the Corporate Debtor, it is alleged that the Respondent is yet to submit the Applicant distribution proceeds regarding the sale of the above movable properties. 3. It is further stated that the Respondent have since appropriated a sum of Rs. 99 lakhs from the Liquidation account of the Corporate Debtor as maintained with the Applicant. 4. The Respondent has published e-auction sale notice in The New Indian Express on 10.09.2020 for an auction to be conducted on 23.09.2020 for the sale of the land and buildings of the Corporate Debtor at reserved price of Rs. 1,06,55,550/- (Rupees One Crore Six Lakhs Fifty Five Thousands Five Hundred Fifty Five only) and the Bid Increment was decided at Rs. ....
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....l charges. Any NCLT Proceedings in this matter against you, I well bear all the Expenses and incidental charges. I am very much sorry for the unavoidable inconvenience caused in this regard. Place: Erode. Date:24/09/2020 Yours Truly, sd- (S. Ramalingam) End:- 1. Highest Bid Report 2. Item wise break up of Bid 3. Bid History" 12. The applicant inquired with the respondent regarding the outcome of the e-auction. On 24.09.2020 the Respondent has written to the Applicant an e-mail contents of which are reproduced below. The said e-mail is placed at page No. 56 of the application:- "Dear Sir, The E auction held on 23/09/2020 was cancelled and the same will be done in due course of time. This is for your kind information." 13. The Applicant further states that the Respondent re-fixed the auction on 25.09.2020 and that the Applicant was never informed about the same. 14. It is the allegation of the Applicant Bank that on 25.09.2020 the auction commenced at the upset price of Rs. 1,06,55,550/- (Rupees One Crore Six Lakhs Fifty Five Thousands Five Hundred Fifty only), i.e. wh....
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.... 23.09.2020 the same is reproduced below:- "The Liquidator has absolute right to accept or reject the bid or adjourn, postpone, extend the auction without assigning any reason" 22. The Ld. Liquidator submits that the Applicant is not entitled the relief as prayed. 23. Both sides admitted that the impugned property has so far not been registered in the name of the auction purchaser till the date of hearing. 24. Heard both sides and perused the documents placed on record. Ld. Counsel for the Liquidator in reply to question posed by this Tribunal during the hearing stated that the EMD provided by Mr. S. Ramalingam, (person who placed a wrong bid on 23.09.2020) was forfeited by the Liquidator. 25. From the documents it is apparent that the auction held on 23.09.2020 was keenly contested auction. In all five bidders were in the designated room. The bidders have placed 52 bids of which 43 valid bids were found to be valid, these were received from 10:00 AM till 11:40 AM. 26. At the commencement of auction at 10:00 AM and Mr. S. Ramalingam has given the first bid for Rs. 1,07,55,550/- at 10:05 AM. The last bid i.e., bid No. 52 was by Mr. S. Ramalingam for Rs. 15,65....
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....0. vi. In place of maximization of value, the auction held on 25.09.2020 decreased the value for the financial creditor. To top it all, the Liquidator never kept the financial creditor in loop for the proceedings held on 25.09.2020. vii. The entire episode smacks of wrongdoings and mala fide on the conduct of the Liquidator in conducting the two auctions on 23.09.2020 and 25.09.2020. 31. In view of the findings above, IA/796/2021 is allowed. The auction held on 25.09.2020 is hereby set aside. 32. The Registry is directed to mark a copy of this Order to IBBI who in turn to conduct detailed inspection of the Liquidator and the records pertaining to the Corporate Debtor to find out irregularities, if any. IA/206/CHE/2021 33. IA/206/CHE/2021 was filed by the successful Applicant who has purchased the immovable property of the Corporate Debtor in e-auction conducted on 25.09.2020 with the following prayers. a. Direct the 1st Respondent/Liquidator to issue and register the Sale Certificate in the name of the Applicant herein, free from all encumbrances and consequently, handover the possession of the Auction property i.e., Factory Land and Building ....