TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 697
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....r. The Adjudicating Authority allowed I.A. No. 238/2022 and directed that amount deposited by the Appellant be refunded with interest as accrued within two weeks. Aggrieved by the order dated 20.06.2022, this appeal has been filed. Brief facts of the case necessary to be noticed for deciding the Appeal are: i. On an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short 'I&B Code') by the Bank of India. Insolvency resolution process commenced against the Corporate Debtor - Kaneria Granito Limited by order dated 26.04.2019. ii. Liquidation proceedings were initiated by subsequent order dated 15.07.2020. The Liquidator issued e-auction sale notice on 09.02.2022 for sale of assets of Corporate Debtor in liquidation under four options. E-auction for Option 1 and 2 was to be conducted on 28.02.2022, simultaneously. Three bidders including Respondent No.1 and Appellant participated in the e-auction process. E-auction Process Information Document clearly stipulated that prospective bidder are required to increase their bid by minimum incremental amount of Rs.5,00,000/-. Further, when bid was placed by one of the bidder in the last five minutes....
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....- Liquidator. 3. Shri Krishnendu Datta, learned counsel appearing for the Appellant submits that according to the E-auction Process Information Document, any qualified bidder can improve its offer in multiple of amount mentioned as Bid Incremental Value. Incremental value was minimum Rs.5,00,000/-. It is submitted that Appellant, Respondent No.1 as well as one another bidder namely 'H. R. Commercials Private Limited' participated in the e-auction. The auction was conducted by an entity namely 'Auction Tiger' and last valid bid was submitted by the Appellant with Rs.38,40,00,000/- on 28.02.2022 at 03:21 PM which was accepted by the system whereas on 03:23 PM, the Respondent No.1 submitted bid of Rs.38,40,00,000/- which was rejected by the system and the Appellant was declared as the highest bidder by the system. The Appellant has deposited the entire amount as required by the Liquidator and the Adjudicating Authority ought not to have interfered with the decision of highest bidder. It is submitted that in the event the Appellant was aware that the bid of Respondent No.1 which was rejected by system shall be considered, the Appellant was sure to increase his bid and ....
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....tor through e-auction platform at the web portal of https://ncltauction.auctiontiger.net. Date of e-auction is on Monday, 28.02.2022 (Timing: 11:00 am to 05:00 pm) with unlimited extension of five minute." Description Remarks 1 Event Type Auction under Liquidation Process 2 Property Details Option 1: Sale of Corporate Debtor as going concern along with all its assets [including land and building, plant and machinery and financial assets (excluding Cash & Bank Balance)]. Option 2: Sale of set of assets collectively [including land and building, plant and machinery and financial assets (excluding Cash & Bank Balance)]. Option 3: Sale on Standalone basis of Plant and Machinery including securities and financial assets (excluding Cash & Bank Balance). Option 4: Sale on Standalone Basis of Land & Building. 8. Clause 10 of the E-auction Process Information Document mentions that the incremental value is Rs.5 Lakhs. On the same day Process Document for Submission of Expression of Interest for Participation was issued by the Liquidator which contains detailed information and instructions. Clause 2.5 under the heading 'Introduction' provides as follows: "....
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....es on Sl. No. 172 to 178, which are to the following effect : Sr. No. Company Name Bid amount Bid date and time IP address Bid Status Remarks .. 172 .... Torrecid India Private Limited (jayesh@torrecid. com) ... 38,15,00,000.00 .... 28/02/2022 15:12:31.463 .... 49.36.83. 248 .... Accepted ... .. 173 Arrhum Tradelink Pvt. Ltd. (infolahoti@gmail. com) 38,20,00,000.00 28/02/2022 15:16:34.723 49.206.34 .146 Accepted .. 174 Torrecid India Private Limited (jayesh@torrecid. com) 38,25,00,000.00 28/02/2022 15:17:03.133 49.36.83. 248 Accepted .. 175 Arrhum Tradelink Pvt. Ltd. (infolahoti@gmail. com) 38,25,00,000.00 28/02/2022 15:20:01:077 49.206.34 .146 Rejected by system }"> Bid was not revised with respect to increment criteria. 176 Arrhum Tradelink Pvt. Ltd. (infolahoti@gmail. com) 38,25,00,000.00 28/02/2022 15:21:25:483 49.206.34 .146 Rejected by system }"> Bid was not revised with respect to increment criteria. 177 Torrecid India Private Limited (jayesh@torrecid. com) 38,40,00,000.00 28/02/2022 15:21:44:623 49.36.83. 248 Accepted .. 178 Arrhum Tradelink Pvt. Ltd. (infolahoti@gmail. com) 38,40,00,000.00 28/02/2022 15:23:55:34....
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....system to run even after the successful bidder had offered the highest amount and exactly at that point of time within two minutes the Applicant offered the same price. The fact is that the Applicant had offered the same price to purchase the Corporate Debtor as a going concern, the liquidator ought to have considered this aspect. It is the object of the Insolvency and Bankruptcy Code, 2016 i.e., to maximize the value of the assets of the corporate person and to promote entrepreneurship etc. It is not the object of the Insolvency and Bankruptcy Code, 2016 only to clear the debts of the creditors of such a corporate person. It is the duty of the liquidator to protect the existence of the Corporate Debtor as far as possible and avoid its death by ultimately pushing the Corporate Debtor to be dissolved." 13. As noted above, the document clearly indicate that if bid under option 1 and 2 are equal, then bidder under option 1 as going concern shall be declared as successful bidder. The system of bidding and various entries shows that bid of Appellant and Respondent No.1 were of equal amount, whereas the system of bidding as was applied by the bidding forum rejected the bid of Responden....
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....he Appellant that if the appellant had known that bid of Respondent No.1 will be considered, he would have further increased his bid, needs no consideration by us. The Adjudicating Authority has taken decision after considering all the relevant consideration and the Adjudicating Authority is right in its observation that it was duty of the Liquidator to protect existence of the Corporate Debtor as far as possible and avoid its death by ultimately pushing the Corporate Debtor to be dissolved. Respondent No.1 having submitted bid under option 1 for sale of Corporate Debtor as going concern, the Liquidator ought to have considered this aspect. The Liquidator went forward mechanically as per the Auction Platform without applying its mind. We are of the considered view that the Adjudicating Authority did not commit any error in declaring the Respondent No.1 as successful bidder. 15. Learned counsel for the Appellant has relied on the judgment of Hon'ble Supreme Court in "(2016) 16 SCC 818, Afcons Infrastructure Ltd vs. Nagpur Metro Rail Corporation Ltd. & Anr", where in Para 15 following has been laid down by the Hon'ble Supreme Court: "15. We may add that the owner or the em....
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....ts; and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purchase of the tender, the Court would prefer to keep restraint. Further to that, the technical evaluation or comparison by the Court is impermissible; and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable to the Constitutional Court, that, by itself, would not be a reason for interfering with the interpretation given." 18. The Hon'ble Supreme Court has clearly held that the author of the tender document is taken to be the best person to understand and appreciate its requirements. In the present case, Liquidator was the person who was the best person to understand and appreciate the E-auction Process Information Document, however, the Liquidator committed error in not declaring the Respondent No.1 as successful bidder as per Clause 10, which error has been corrected by the Adjudicating Authority. 19. The above two judgments relied by the Appellant also does not help the Appellant in any manner. Learned counsel for the Appellant has also place reliance on the judgment in "(1985) 3 SCC 267, Ram and S....