TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 835
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....(AT) (CH) (INS) No. 49 of 2021 to rely on the pleadings, in regard to the subject matter of the instant proceedings. The Appellant/Applicant had engaged KPMG Assurance and Consulting Services LLP ('KPMG') for the ambit of work Viz., (i) in reviewing the documents and electronically stored information available with the client, as regards the 'Auction' and 'Bidding Process', (ii) in reviewing the documents given by the Liquidator, as part of the ongoing 'litigation process', (iii) in reviewing the supporting documentation, logs and metadata to identify potential instances of bid rigging or manipulation in the auction process (iv) to perform document review procedures and attempt to identify misrepresentation, if any. (v) in reviewing the System general 'Auction Logs', 'User Logs' and analysis of all relevant Data generated from 'Auction Website' and (vi) to provide a 'Fact Finding Report Basis Review' conducted, to be submitted to this 'Appellate Tribunal' as part of the 'Litigation Proceedings'. 2. The Learned Counsel for the Applicant / Appellant submits that the 'KPMG' was engaged by the 'Appellant' for its 'Expert Review and Analysis' and that the 'Independent Report' dat....
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....Petition' is not good enough to establish that inspite of due diligence, additional evidence could not be produced / filed before the 'Adjudicating Authority'. If no satisfactory explanation is offered for non-production of additional documents before the 'Appellate Authority', then, the 'Interlocutory Application' is liable to be dismissed. 8. If the 'Appellate Tribunal' can determine the 'Appeal' (based on the available materials on record), without the production of the 'Additional Documents' / 'Additional Evidence', in a given case, and pronounced its judgment, then, the Interlocutory Application for letting in additional documents in a given proceeding before the 'Appellate Tribunal', does not arise. 9. As far as the present case is concerned, this 'Tribunal' on a careful consideration, respective contentions, keeping in mind of the 'Report' dated 20.03.2021 of M/s. Tata Communications and the Independent Auditor's Report dated 24.04.2021, are from 'Third Parties' and these additional materials admittedly have come into existence, after the 'impugned order' dated 18.03.2021, passed by the 'Adjudicating Authority', based on the 'Principle' that an 'Appellate's stage' is not m....
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....of the page. As rightly pointed out by the Respondents namely, R2 and R3 the snapshots evidence which has been predominantly produced being system generated by the Applicant to sustain its plea that the auction itself has been closed at the time viz., 05:43:17 hour IST is not supported by a certificate as required under the provisions of Section 65-B (4) of the Indian Evidence Act, 1872. 47. In fact, none of the screenshots which are system generated as relied before this Tribunal by the Applicant is supported by the certificate as are mandatory under the provisions of Section 65-B (4) of the Indian Evidence Act, 1872 which it is required of, in order to place reliance, as held by the Hon'ble Supreme Court in the decision of Arjun Panditrao Khotkar -vs- Kailash Kushanrao Gorantyal (2020) 7 SCC 1. Further, the Hon'ble Supreme Court also held in Anvar P.V - vs - P.K. Basheer (2014) 10 SCC 473, a certificate must accompany the electronic record like computer printout, compact disc, video compact disc, pendrive, etc., when the same is relied upon as an evidence. 48. Even perusal of the Bids History Report as filed before this Tribunal annexed at page No. 99 of the Application dis....
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....stant case "ZOOM" sharing of screen is seen to have been carried which also gives a scope for internet connectivity issue as rightly contended by R2 which makes the connectivity not seamless which it is required of, particularly during the E-auction process of the nature involved presently before this Tribunal as these are commercial transactions of high value and hence it is required of the Applicant to be vigilant. 53. In the circumstances, it is for the Applicant to have its connectivity of its system to be constantly logged in into the Eauction of the process and portal consistently and remained continuously vigil and not to have logged out at any point of time. Further, the Applicant it also seen that for a long time (in view of the E-auction process) where minutes matter, had not been reacting as referred to in paragraph supra and the Applicant being a bidder is not required to wait till last moment just before the expiry of five minutes duration within which the bids are required to be refreshed, in view of any connectivity issue or any technical glitch that may arise on the side of the Applicant thereby scuttling his effort of bidding being a bidder in the E-auction proc....
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....ld not be proper for this court to undermine the value of such auction sale conducted not only by the secured creditor but also by the Official Liquidator who was permitted to be associated with the whole process of finding out of valuation as well as the conduct of sale. M/s. Venus Realcon has rightly placed reliance upon the judgments of this court in the case of Valji Khimji & Co. v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. MANU/SC/3408/2008 : 2008 (9) SCC 299 and Vedica Procon Private Limited v. Balleshwar Greens P. Ltd. MANU/SC/0870/2015 : 2015 (8) SCALE 713. In Valji Khimji, the law was enunciated in Paragraph 28 in the following words: "If it is held that every confirmed sale can be set aside the result would be that no auction-sale will ever be complete because always somebody can come after the auction or its confirmation offering a higher amount. It could have been a different matter if the auction had been held without adequate publicity in well-known newspapers having wide circulation, but where the auction-sale was done after wide publicity, then setting aside the sale after its confirmation will create huge problems. When an auction-sale is adv....
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....ant/Applicant, the 'Adjudicating Authority' had erroneously dismissed the IA/74/2021 in CP/508/IB/2017 (Filed by the Applicant/Appellant under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 ('IBC'), read with Regulation 33 (1) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 ('Liquidation Regulations') read with Rule 11 of the National Company Law Tribunal Rules, 2016. 13. It is represented on behalf of the Appellant/Applicant that, the Applicant/Appellant was declared as 'H1 Successful Bidder' with the highest bid on the date of the e-auction, i.e., on 21.01.2021, when the eauction was closed at 17.42 hours and that the 1st Respondent (Liquidator) had refused to act on the result of the auction and contended that there was a higher bid received at 17.41 hours after the last bid of the Appellant at 17.37 hours (which alleged higher bid of the 3rd Respondent who was not visible to the Appellant on the e-auction portal), in the event a higher bid was actually placed before the expiry of five minutes from the Appellant's last bid at 17.37 hours and the same was not visible to the Appellant at 17.41 hours., there should have been a re-....
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....gher bid of the 3rd Respondent might not have been visible to the Appellant. 18. The categorical plea projected on the side of the Appellant is that, there is no evidence to contradict its position that the purported bid of the 3rd Respondent was visible to the Appellant, when it was placed at 17.41 hours on 21.01.2021. Apart from that, in the absence of evidence, withholding the best evidence in the light of evidence produced by the Appellant including the 'Project Pursuit Report by KPMG', any proof and in the interest of the integrity of the process, the 1st Respondent should have held a further auction between the Appellant and the 3rd Respondent, especially, when the Appellant was ready and willing to outbid the 3rd Respondent by increasing its bid amount substantially. 19. The Learned Counsel for the Appellant adverts to Clause 11 to Schedule I of Regulations 33 of the Liquidation Regulations which provides that 'the Liquidator may conduct multiple rounds of auctions to maximize the realization from the sale of the assets, and to promote the best interests of the creditors'. Further, the 1st Respondent / Liquidator being the 'custodia legis' was obligated as per Regulations ....
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....' was not volunteered by the 2nd Respondent to produce the same before this 'Tribunal', for its benefits. 24. The Learned Counsel for the Appellant comes out with a stand the 2nd Respondent produces the purported log reports which show the 'login' and 'logout' reports maintained in the 2nd Respondent System which cannot be verified by anyone and cannot be relied upon. Indeed, the 2nd Respondent continues to rely upon a 'Demo' annexed as 'Annexure R2 and R3' to the Counter Affidavit and the said 'Demo' was produced before the 'Adjudicating Authority' and in fact, there is no proof at all, on what actually transpired on that day. 25. It is represented on behalf of the Appellant that the 'Report' of the 'Tata Communications' shows that the Internet Connectivity to the Appellant had no issues on 21.01.2021 at the time of 'e-bidding'. 26. The Learned Counsel for the Appellant adverts to the inconsistencies in the 'Reports' of the 2nd Respondent to the effect that; a. "The Log Report and Bid History Report provided by the Respondent No.2 pertaining to the E-auction of the asset block of Ennore Coke Limited, indicates a difference in the "Bid date and time" field of the Bid History R....
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.... the Appellant brings it to the notice of this 'Tribunal' that in the 'E-auction Process' document, nowhere provides any such requirement for refreshing the e-auction page and also that the 2nd Respondent's 'E-auction Portal' had not given any 'Notification' to the 'Appellant' for 'Automatic Log Out', during the 'Eauction Process'. 29. Added further, that it is the version of the Appellant that the times stamp on the e-auction page was running, as evident from the 'screenshot' filed by the 'Appellant' and there was no explanation as to how the time was running on the e-auction page as was captured by the Appellant which ultimately showed that after five minutes of 17.37 hours, the eauction had closed at 17:42 hours, the Appellant being the highest bidder. 30. According to the Appellant, the 2nd Respondent does not say that a 'Bidder' is notified if it is automatically 'logged out' and in fact, the Liquidator has not challenged the correctness of the 'screenshots' produced by the Appellant either before or after the initiation of the 'Proceedings'. 31. The Learned Counsel for the Appellant contends that when an auction is a illegal one, the issuance of Sales Certificate will not v....
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.... a sound exercise of discretion. It is contended on behalf of the appellant that confirmation was discretionary with the Court and the Division Bench ought not to have interfered with the discretion exercised by the Company Judge. It is true that the discretion exercised by the Judge ought not to be interfered with unless the Judge has gone wrong on principle. As already pointed out the learned Company Judge having decided to put the property to auction went wrong in not holding the auction as a public auction after due publicity and this has resulted in prejudice to the Company and the creditors in that the auction did not fetch adequate price. The prejudice was inherent in the method adopted. The petition of Padam Chand Agarwal also suggests that want of publicity had resulted in prejudice. In these circumstances the Company Judge ought not to have confirmed the bid of the appellant in the auction held on December 24, 1964. We are accordingly of opinion that the Division Bench was right in holding that the order of the Company Judge dated February 19, 1965 should be set aside and there should be fresh sale of the property either by calling sealed tenders or by auction in accor....
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....e present case, it was alleged that there were several irregularities in the first auction. The tender notice did not state valuation of movable and immovable property; reserve price was not fixed, inventory of plant and machinery was not made available, etc. If on consideration of these facts, the Company Judge ordered fresh auction, in our considered opinion, no complaint can be made against such action." [Emphasis Added] 38. The Learned Counsel for the Appellant seeks in aid of the decision of the Hon'ble Supreme Court in Divya Mfg. Co. (P) Ltd. V Union Bank of India (2000) (6) SCC at page 69 at Spl. Page 78, wherein at paragraph 13, it is observed as under: 13. "From the aforesaid observation, it is abundantly clear that the Court is the custodian of the interests of the Company and its creditors. Hence, it is the duty of the Court to see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud. As stated above, in the present case, the sale proceedings have a chequered history. The appellant started its offer after having an agreement with the Employees' Samity for Rs.37 lakhs. This was on the face of it unde....
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....r loss to the highest bidder but that cannot be helped in view of the fact that such sales are conducted in Court precincts and not by a business house well versed with the market forces and price. Confirmation of the sale by a Court at a grossly inadequate price, whether or not it is a consequence of any irregularity or fraud in the conduct of sale, could be set aside on the ground that it was not just and proper exercise of judicial discretion. In such cases, a meaningful intervention by the Court may prevent, to some extent, underbidding at the time of auction through Court. In the present case, the Court has reviewed its exercise of judicial discretion within a shortest time." [Emphasis Added] 40. The Learned Counsel for the Appellant refers to the decision of the Hon'ble Supreme Court of India in LICA (P) Ltd. (No. 1) v. Official Liquidator, (2000) 6 SCC 79 at Spl. Page 81 at paragraph 5, wherein it is observed as under: 5. "The purpose of an open auction is to get the most remunerative price and it is the duty of the court to keep openness of the auction so that the intending bidders would be free to participate and offer higher value. If that path is cut down or close....
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.... was made. The jurisdiction of the Company Court is vast and wide. It can mould its reliefs. It may exercise one jurisdiction or the other. It may grant a variety of reliefs to the parties before it. The parties before the Company Judge are not only the Company or the creditors who had initiated the proceedings but also others who have something to do therewith. Even in a given case a larger public interest may have to be kept in mind. The court may direct winding up. It may prepare a scheme for its restructuring. 77. We, therefore, are of the opinion that the Company Judge was not correct in its view and passed the impugned judgments only having regard to the wrongful conduct on the part of the appellant in obtaining an award from the Conciliation Tribunal or failure to bring a better offer from another bidder. 78. The question which is really an intricate one is what relief can be granted. On the one hand, the Company has committed wrongs, on the other, its property has been sold in auction. Even a part of the property has been permitted by us to be taken out of the country. The factory, we are told, has started operation. It has employed a large number of workmen. Would th....
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.... [Emphasis Added] 1st Respondent/Liquidator's Submissions: 43. The Learned Counsel for the 1st Respondent/Liquidator contends that in the instant case, an 'Expression of Interest' ('EOI') was issued on 24.12.2020, inviting 'Prospective Bidders' to bid for the 'Assets' in (Liquidation) together with a 'Process Memorandum', wherein a reserve price of Rs.16,20,00,000/- was fixed. In fact, the 'Prospective Bidders' were required to pay 5% Earnest Money Deposit and upon acceptance of the 'Bid' (within seven days) 25% of the total price and later, within one month the remaining amount was to be paid. 44. It is represented on behalf of the 1st Respondent/Liquidator that the Auction took place on 21.01.2021 with two Qualified Bidders Viz., The Appellant and the Third Respondent. In reality, the e-auction was conducted through the 2nd Respondent who is a 'Professional Eauctioning Agency'. Furthermore, the 'bidding' was to be kept open between 3.00 P.M. to 5.00 P.M., with an automatic extension of five minutes (unlimited times), until a 'Successful Bidder' is chosen and that the 2nd Respondent was required to open the Portal and manage the process and submit a 'Report' to the Liquida....
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....esent e-auction was conducted in terms of the 'Process Memorandum' and the results were communicated to the 1st Respondent/Liquidator which is fully automated through the System and therefore, there is no irregularity in regard to the 'conduct of the Auction'. 49. The Learned Counsel for the 1st Respondent/Liquidator brings it to the notice of this Tribunal that both the 'Bidders' have taken part successfully in the 'e-auction' which began at 3.00 P.M. and that the 'auction' was not concluded at 5.00 P.M., since further 'Bids' were received from either 'Bidder', within five minutes. More importantly, the 'Bidding' went on till 17:46:00 hours as per the Report of the 2nd Respondent and in terms of the 'Process Memorandum' within five minutes extensions were permitted from the last 'Bid' submission Viz., 17:41:01 hours till 17:46:00 hours, as last 'Bid' was received 17:41:01 hours from the 3rd Respondent. Hence, as per the 'Process Memorandum' if the System had not received any 'Bids' within five minutes, then the System will automatically close the 'e-auction'. In short, on multiple times, the 'Requisite' five minutes extensions were provided to the 'Parties' Viz., Appellant/Applic....
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....hich involved around eight rounds of 'Bidding' by each party upto the stage. Further, in regard to the final bid, it is likely that the 'Appellant' was unable to view the same, as it was logged out or had some issue from its end, which is evident from the fact that it had sought trouble shooting assistance from the 2nd Respondent during the time of 'e-auction', and it has admittedly not followed the specific instructions of the 2nd Respondent to 'login' only from one 'Browser' and not to open 'multiple windows' while it was participating in the 'e-auction process', therefore, it is the plea of the 1st Respondent / Liquidator that the 'Appellant/Applicant' cannot assail the conduct of 'e-auction process' for a technical error on its part. 54. The Learned Counsel for the 1st Respondent/Liquidator urges before this 'Tribunal' that the '1st Respondent/Liquidator' had conducted the 'e-auction' in good faith and was guided by the '2nd Respondent/Agency' (in-charge of e-auction) in announcing the results of 'e-auction'. As a matter of fact, Section 233 of the I & B Code, 2016, 'protection of action' taken in 'Good Faith' by the 'Liquidator in discharge of his duties under the Code. 55. ....
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....reme Court of India in Valji Khimji & Co. v. The Official Liquidator, (2008) 9 SCC at Page No. 299 at Spl. Pgs: 304 and 305, wherein at paragraphs 27 to 31, it is observed and held as under: 27. "In our opinion the decision of this Court in Divya Mfg. Co. (P) Ltd. [(2000) 6 SCC 69] cannot be treated as laying down any absolute rule that a confirmed sale can be set aside in all circumstances. As observed by one of us (Hon. Katju, J.) in his judgment in Rajbir Singh Dalal (Dr.) v. Chaudhari Devi Lal University [(2008) 9 SCC 284], a decision of a Court cannot be treated as Euclid's formula and read and understood mechanically. A decision must be considered on the facts of that particular case. 28. If it is held that every confirmed sale can be set aside the result would be that no auction sale will ever be complete because always somebody can come after the auction or its confirmation offering a higher amount. It could have been a different matter if the auction had been held without adequate publicity in well known newspapers having wide circulation, but where the auction-sale was done after wide publicity, then setting aside the sale after its confirmation will create huge ....
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.... wherein at paragraphs 7 to 11, it is observed as under: 7. "In so far as the wide publicity was not given in the second eauction held on 15.04.2019 is concerned, the Liquidator has publicly advertised the auction notice in the Business Standard circulated in Delhi and Jaipur duly disclosing the asset for auctioning and followed the procedure as laid down in the Regulations 12 of (Liquidation Process Regulation). Hence we do not find any merit in the allegation. 8. In so far as the allegations of the Appellant with regard to reducing the time period is concerned, the Liquidator followed the procedures as contemplated in clause 3 of Schedule I of the Regulations, which provides that the Liquidator shall prepare the terms and conditions of sale, Regulation 2 of Schedule I and the Liquidator shall prepare a marketing strategy with the help of marketing Professionals, if required for sale of the Asset. The strategy may include releasing advertisement, preparing of information sheets for the asset, preparing a notice of sale and liaising with Agents. Moreover, in the code and in the liquidation Regulations, no time limit was specified for the auction process, other than the mode of....
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.... gone through the various submissions made by them. Appellant, Respondent No. 1 and liquidator and we found that R-2 to R-4 did not participate in the e-auction and filed an application as objectors and offering a higher price in order to create a lust for worth maximisation and thereby vitiated the whole process. In any case R-1 has also withdrawn the offer without there being any corresponding provision in the IBC and NCLT was entitled to forfeit their entire amount. Regulation 32, 32(A) and 33 of Insolvency and Bankruptcy Board of India liquidation process regulation 2016, provides for the mode of liquidation. Regulation 32 of Insolvency and Bankruptcy Board of India Liquidation Process Regulation 2016 the liquidator should originally sell the Corporate Debtor through an auction and private auction is permitted only in certain classes of assets which are of perishable nature, assets likely to deteriorate in value if not sold immediately, if it is sold at a higher price than the Reserve Price of a failed auction etc. Regulation 33(3) states as follows:- "The liquidator shall not proceed with the sale of an asset if he has reason to believe that there is any collusion between t....
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....screenshots are inadmissible because of the fact that as per Section 65B (4) of the Indian Evidence Act, 1872, 'Certificate' is a condition precedent for the admissibility of an 'Electronic Record' as 'Evidence'. 65. The Learned Counsel for the 2nd Respondent by referring to the Report dated 20.03.2021, prepared by Tata Communications and Auditor's Report dated 24.04.2021, secured from a 'Third Party' and these Reports were not filed before the 'Adjudicating Authority' for the purpose of 'Adjudication' and these materials cannot be allowed to be received at the 'Appellate's stage', before this 'Tribunal' in the instant 'Appeal' and for not filing the same before the 'Adjudicating Authority', no tangible reasons are projected on the side of the Appellant. 66. The Learned Counsel for the 2nd Respondent refers to the decision of the Hon'ble Supreme Court of India in the matter of N Kamalam v. Ayyasamy (2001) 7 SCC at Page 503, wherein at paragraph 19, it is observed as under: 19. "Incidentally, the provisions of Order 41 Rule 27 have not been engrafted in the Code so as to patch up the weak points in the case and to fill up the omission in the Court of Appeal - it does not authori....
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....Service Provider' cannot be held responsible for the 'System Error' or the 'Appellant's Internet Connection'. Furthermore, the 'Timer' associated with the 'E-auction' is the 'Client Based' / 'Global Timer' which repeatedly upgrades and updates by sending the signals to and fro with the 'Server' meaning that during the course of 'E-auction' the signal will be shared with the Server repeatedly which in turn will upgrade the 'Timer'. After the completion of 'E-auction', System generated e-mail is sent to the 'Successful Bidder' automatically. 2nd Respondent's Citations: 72. The Learned Counsel for the 2nd Respondent refers to the Judgment of the Hon'ble Supreme Court of India dated 14.07.2020 in Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, (vide in Civil Appeal Nos. 20825-20826 of 2017, wherein it is observed as under: 23. "Under Sub-section (4), a certificate is to be produced that identifies the electronic record containing the statement and describes the manner in which it is produced, or gives particulars of the device involved in the production of the electronic record to show that the electronic record was produced by a computer, by either a person occupying a re....
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....s. 2 70. Perusal of the opinion of the Full Bench in B.R. Gupta-I [Balak Ram Gupta v. Union of India, AIR 1987 Del 239] would clearly indicate with regard to interpretation of the word any in Explanation 1 to the first proviso to Section 6 of the Act which expands the scope of stay order granted in one case of landowners to be automatically extended to all those landowners, whose lands are covered under the notifications issued under Section 4 of the Act, irrespective of the fact whether there was any separate order of stay or not as regards their lands. The logic assigned by the Full Bench, the relevant portions whereof have been reproduced herein above, appear to be reasonable, apt, legal and proper. (emphasis added) without further proof or production of the original. The very admissibility of such a document i.e. electronic record which is called as computer output, depends on the satisfaction of the four conditions under Section 65-B(2). Following are the specified conditions under Section 65- B(2) of the Evidence Act: (i) The electronic record containing the information should have been produced by the computer during the period over which the same was regularly used to....
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....terms of Section 65-B of the Evidence Act, would the question arise as to the genuineness thereof and in that situation, resort can be made to Section 45-A opinion of Examiner of Electronic Evidence. 18. The Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if requirements under Section 65-B of the Evidence Act are not complied with, as the law now stands in India. xxx xxx xxx 20. Proof of electronic record is a special provision introduced by the IT Act amending various provisions under the Evidence Act. The very caption of Section 65-A of the Evidence Act, read with Sections 59 and 65-B is sufficient to hold that the special provisions on evidence relating to electronic record shall be governed by the procedure prescribed under Section 65-B of the Evidence Act. That is a complete code in itself. Being a special law, the general law under Sections 63 and 65 has to yield. 21. In State (NCT of Delhi) v. Navjot Sandhu a two-Judge Bench of this Court had an occasion to consider an issue on production of electronic record as evidence. While considering the printouts of the computerised records of the calls pertaining to the cellp....
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....evail over the general law. It appears, the court omitted to take note of Sections 59 and 65-A dealing with the admissibility of electronic record. Sections 63 and 65 have no application in the case of secondary evidence by way of electronic record; the same is wholly governed by Sections 65-A and 65-B. To that extent, the statement of law on admissibility of secondary evidence pertaining to electronic record, as stated by this Court in Navjot Sandhu case, does not lay down the correct legal position. It requires to be overruled and we do so. An electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements under Section 65-B are satisfied. Thus, in the case of CD, VCD, chip, etc., the same shall be accompanied by the certificate in terms of Section 65-B obtained at the time of taking the document, without which, the secondary evidence pertaining to that electronic record, is inadmissible. 23. When legal position is that additional evidence, oral or documentary, can be produced during the course of trial if in the opinion of the Court production of it is essential for the proper disposal of the case, how it can be held that the certifica....
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.... therefore, that the certificate required under Section 65B(4) is a condition precedent to the admissibility of evidence by way of electronic record, as correctly held in Anvar P.V. (supra), and incorrectly "clarified" in Shafhi Mohammed (supra). Oral evidence in the place of such certificate cannot possibly suffice as Section 65B(4) is a mandatory requirement of the law. Indeed, the hallowed principle in Taylor v. Taylor (1876) 1 Ch.D 426, which has been followed in a number of the judgments of this Court, can also be applied. Section 65B(4) of the Evidence Act clearly states that secondary evidence is admissible only if lead in the manner stated and not otherwise. To hold otherwise would render Section 65B(4) otiose." 73. The Learned Counsel for the 2nd Respondent cites the Judgment of the Hon'ble Supreme Court in India dated 18.09.2014 (Vide Civil Appeal No. 4226 of 2012) in Anwar PV v. P K Basheer, wherein it is observed as under: "A certificate must accompany the electronic record like computer printout, Compact Disc (CD), Video Compact Disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. All....
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....f this 'Tribunal' that the 3rd Respondent has spent various sums and in fact old machineries were repaired at the cost of 3rd Respondent and new machineries were ordered for the 'Plant'. The 3rd Respondent took possession of the factor and had applied for 'Renewal of Licenses' before the different 'Authorities' in fact, the 3rd Respondent had paid the 'whole consideration' for the 'Sale' and the 'Sale' was completed. 79. The Learned Counsel for the 3rd Respondent vehemently takes a stand that if this 'Tribunal' permits the subsequent 'bid' to undue the 'concluded sale', there will be no sanctity of a 'Court Sale' through a 'Public Auction' and an unscrupulous bidder would wait and watch on the wings. Moreover, an uncertainty in 'Public Auction' would detract genuine and bonafide bidders by adopting an 'unscrupulous practice'. 3rd Respondent's Decided Cases: 80. The Learned Counsel for the 3rd Respondent cites the decision of the Hon'ble Supreme Court in Pegasus Assets Reconstruction P Ltd. V. Haryana Concast Limited & Ors., reported in Manu/SC/1489/2015: AIR2016 SC 494, wherein at paragraphs 32 and 33, it is observed as under: 32. " On considering the submissions of parties, ....
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....a grossly inadequate price. This situation itself may indicate fraud or some collusion. However, if the price offered after the auction is over which is only a little over the auction price, that cannot by itself suggest that any fraud has been done. 33. In Vedica Procons case (supra) the aforesaid view was noticed and after considering many judgments in Paragraph 39, the Court approved the view taken in Navalkha and Sons vs. Sri Ramanya Das & Ors., 1969 (3) SCC 537 that there is a discretion in the Company Court either to accept or reject the highest bid before an order of confirmation of sale is made. However, once the Company Court is satisfied that the price is adequate, the subsequent higher offer cannot be a ground for refusing confirmation. The price of immoveable property keeps on varying depending upon the market conditions and availability of a buyer. Such fluctuations may attract fresh higher offers but normally such offers cannot be made the basis for reopening the confirmed sale which was otherwise valid. In the present case, we are satisfied that the sale made in favour of M/s. Venus Realcon does not require any interference. There is no good reason why the full....
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....s. where bids were received and were opened in the Court. The highest bid was that of the appellant M/s. Valji Khimji & Company amounting to Rs. 3.51 crores. With the consent of the learned advocates representing the secured creditors, the said bid was accepted and the sale was confirmed on 30.7.2003. The Court directed the appellant to deposit 25% of the purchase price i.e. Rs.63,98,000/- within 30 days from the said day and to deposit the balance amount within the next three months. The Court also directed that the amount may be deposited in instalments, but no instalment should be less than Rs.5 lakhs. Accordingly Hon'ble Supreme Court confirmed the auction sale in favour of the Appellant. CONCLUSION: 30. The appeal is, therefore, maintainable in view of the provision of Section 61 (1) of IBC as SBI has a large stake of Rs.469.29 cr. 31. The Auction is not challenged on the ground of fraud and/or irregularity. 32. There is no provision in the terms and condition of auction to withdraw from the auction process once it is agreed by the successful bidder (R-1) i.e m/s Maithan Alloys Limited. 33. Section 35 (1) (f) of the IBC empowers liquidator to sell the proper....
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....wise making a false statement before the court whether on affidavit or not is not to be treated lightly. The court acts on the basis of the statement made by a party to the lis. Whether such defence has been accepted or not is not of much importance but whether a false statement to the knowledge of the party has been made or not is. In any view of the matter, the court must draw an adverse inference in this behalf against the respondent. (Para 64) Furthermore, a person should not be permitted to take advantage of his own wrong. He should either stand by his statement made before a court of law or should explain the same sufficiently. In absence of any satisfactory explanation, the court will presume that the statement before a court is correct and binding on the party on whose behalf the same has been made. (Para 65) As the law stated in Thiru John case "a party's admission as defined in Sections 17 to 20, fulfilling the requirements of Section 21 of the Evidence Act , is substantive evidence proprio vigore. An admission, if clearly and unequivocally made, is the best evidence against the party making it and though not conclusive, shifts the onus on to the maker." (P....
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....d' and 'Collusion' vitiates the 'solemn proceedings' in any 'Civilised System of Jurisprudence'. 'Fraud' emanates from a deception committed by the 'disclosure of an incorrect facts knowingly and deliberately to invoke the exercise of power'. To put it pin-pointedly, it is an act of 'Trickery' or 'Deceit'. 85. The term 'Fraud' involves (i) Deceit (ii) An injury to the individual 'Deceived' (iii) An injury is like 'deprivation of an 'Movable' / 'Immovable Property' or of 'Money', and it will include whatever harm caused to any person in body, mind, reputation, etc.'. Meaning of Fraud: 86. Section 17 of the Indian Contract Act, 1872, defines 'Fraud', meaning and including the suggestion as to a fact of that which is untrue, by one who does not believe it to be true and active concealment of a fact by one having knowledge or belief of fact. Standard of Proof: 87. More importantly, in respect of an 'allegation', 'misrepresentation' or 'Fraud' is made, the level of proof required is extremely high and placed on par with the 'Criminal Trial'. Negligence: 88. The word 'Negligence' has manifestations Viz., a) 'Active Negligence' and b) 'Passive Negligence'. In case of 'Negligence....
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....e purpose of 'Auctioning of Leasehold Land', Building, Plant and Machinery, Furnitures and Fixtures and Vehicles at the Haldia of the Corporate Debtor as mentioned in Clause 7 of the 'Process Memorandum'. In fact, the 'Reserve Price' for the Assets, in terms of the Process Memorandum was Rs.16,20,00,000/-. 94. It comes to be know that as per the terms of the Process Memorandum, The Appellant/Applicant had submitted its 'Expression of Interest' by email dated 15.01.2021 along with 'Requisite Bid Form' and 'Earnest Money Deposit, etc., and it was approved for taking part in the 'E-auction' which was informed by the 2nd Respondent through email dated 16.01.2021. E-Auction Bidder Tutorial Sheet was provided to the Appellant/Applicant and the Appellant/Applicant took part in the Eauction on 21.01.2021 and incrementally increased its 'Bid' within every five minutes from the last 'Bid' placed by the another 'Bidder'. 95. The Appellant/Applicant placed its 9th Bid of Rs.17,80,00,000/- at 17:37:33 hours on 21.01.2021. It is the version of the Appellant/Applicant that after it placed its 9th Bid at 17:37:33, the 3rd Respondent had not placed its 'Bid' within five minutes of 17:37:33 hours.....
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....and they have committed fraud and the selection of the 3rd Respondent was a malafide one. 99. The 1st Respondent/Liquidator in his 'Reply' to IA/74/2021 in CP/508/IB/2017 had inter alia averred that as per 'Report' of the 2nd Respondent received by the 'Liquidator', the 'Bidding Process' which commenced at 3.00 P.M. on 21.01.2021 went beyond 5.00 P.M. etc., in fact, the 'Bidding Process' was completed at 17:46:00 hours, the last bid was submitted by the 3rd Respondent i.e., Mahalaxmi Wellman Fuel LLP at 17:41:01 hours at Rs.17,90,00,000/-. In fact, the last 'Bid' submitted by the Appellant/Applicant was at 17:37:33 hours, amounting to Rs.17,80,00,000/- and within four minutes thereof, the 3rd Respondent submitted a 'Higher Bid' at 17:41:01 hours. In the instant case, according to the 1st Respondent/Liquidator, the 3rd Respondent who submitted the last highest 'Bid' was considered as the 'H1 Bidder' (highest bid). 100. The Learned Counsel for the 1st Respondent/Liquidator points out that between 17:41:01 to 17:46:00 hours, there was no activity recorded in the System / Portal by the 'E-auction Service Provider'. As per the records of the 2nd Respondent/Auction Agency and in fact, ....
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....hat the Appellant/Applicant had simultaneously logged in from multiple browser as admitted by it and the translated version of the transcript (in English), runs as under: "Translated version of the transcript (in English) : APPLICANT : I AM SIMULTANEOUSLY LOGGED IN FROM TWO (2) BROWSERS. LIP1 : DON'T OPEN TWO BROWSERS SIMULTANEOUSLY." 105. The Learned Counsel for the 2nd Respondent adverts to the fact that in terms of the automatically system generated Log Report, the 'Appellant/Applicant' had not undertaken any 'activity' at 17:37:33 hours and the translated version of the transcript (in English), is as under: "Translated version of the transcript (in English) : Applicant : When did the auction end? lip1 : Auction has ended at 46 pm on 5.46 pm. Applicant : How auction has ended on 46? lip1 : one bid had come at 41 that has taken up it to 46. Applicant : Our bid was on 43, it displayed in our computer, and the same was generated at 43 in your system and at 17 min, it shows that it is closed." 106. The Learned Counsel for the 2nd Respondent points out that the Appellant / Applicant had not only violated the confidentiality by sharing the screen and recor....
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.... for choosing the 3rd Respondent. Furthermore, the 'Appellant/Applicant' last touch of the 'E-auction Process', after logging out of the System at 17:37:00 hours and thereafter re-logged at 17:57:59 hours i.e., after 20 minutes of the logging out. 112. In the instant case, the 'Appellant' has come out with a plea that the Respondents No. 1 and 2 have joined together in declaring the 3rd Respondent as the 'Successful Highest Bidder'. The 'Appellant' before the 'Adjudicating Authority' had relied upon the 'screenshots', which were System generated to fall back upon its contention that the auction was closed at 05:43:17 hours (Indian Standard Time) which was not accompanied by a Certificate as per the ingredients of Section 65B (4) of the Indian Evidence Act, 1872. 113. As a matter of fact, it is evident from the 'Bid History', that the 'Bids Sum' was made known as Rs.17,80,00,000/-. On 21.01.2021, the 'snapshots' of the screen were taken at 05:43:17 hours (Indian Standard Time), which is not backed up by a furnishing of Certificate, as per Section 65B (4) of the Indian Evidence Act. In reality, the onus is upon the 'Appellant/Applicant' to ascertain the Equipment / System through w....
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....00/-. 118. On behalf of the 2nd Respondent, it is pointed out that the 'Appellant' was getting logged out more often and further the 'Appellant' had admitted that it had logged in from two browsers simultaneously and for the aspect of sharing 'E-Auction', negligence, omission to act or for faulty Internet connection, the opposite party could not be blamed or accused of. 119. It cannot be gainsaid that Schedule I Mode of Sale (under Regulation 33 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016, Serial No. 10, it is mentioned as 'If the Liquidator is of the opinion that an auction where bid amounts are not visible is likely to maximize realizations from the sale of assets and is in the best interests of the creditors, he may apply, in writing, to the Adjudicating Authority for the permission to conduct an auction in such manner'. It is to be borne in mind that the '1st Respondent/'Liquidator' had not resorted to the recourse of preferring an 'Application', based on the ground that the 'Bid Sums' were not discernible, as per the stand taken on behalf of the 'Appellant/Applicant'. 120. It is pertinently pointed out that if an 'Act is committed ....
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....circumstance against it. 'Admissions' are admissible even though they are self harming. 'Admission' is substantive evidence 'Pro Prie Vigore'. 127. In fact, the 'Appellant/Applicant' had tacitly admitted that 'I AM SIMULTANEOUSLY LOGGED IN FROM TWO (2) BROWSERS. Further the 'Appellant/Applicant' chose to simultaneously shared the 'Auction' screen during the 'Auction' session by using the 'Third Party Application - ZOOM'. An 'Admission' by a 'Party' is the best piece of evidence which can be pressed into service against him. 128. As per the terms and conditions of the 'Auction', the Appellant/Applicant is to follow the rules of the game scrupulously, when the Appellant / Applicant is guilty of 'inaction' and 'latches on its part' and remained 'inactive' for more than 20 minutes from 17:37:34 hours till 17:57:59 hours, then, it is not open to it to assail the 'conduct of auction' in and by which, the 3rd Respondent was declared to be the 'Successful Highest Bidder' and later, the 'concluded sale', which cannot be set aside because of the fact that the 'Appellant/Applicant' is endeavoring to increase the 'Bid'. 129. At the risk of repetition, this 'Tribunal' that after getting 'Sal....