TaxTMI 
TaxTMI 
2023 (7) TMI 211
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.... 02.03.2023 passed by the Adjudicating Authority [National Company Law Tribunal, Mumbai Bench] in I.A. No. 947/2022 in C.P. (IB) No. 297/ (MB)/ 2018, whereby the Adjudicating Authority set aside the e-auction dated 08.04.2022 of the sole property of the corporate debtor. 2. The Company Appeal (AT) (Ins) No. 401 of 2023 has been filed by Mr. Naren Seth, the liquidator of Ciemme Jewels Ltd./ Corporate Debtor, wherein he is aggrieved by the impugned order setting aside e-auction dated 08.04.2022 for sale of sole property of the corporate debtor in liquidation and directing the Appellant/ liquidator to personally bear the cost of auction/re-auction, contemplating haste on part of the Appellant/liquidator. In another Company Appeal (AT) (Ins) No. 695 of 2023, the appeal has been filed by M/s Marine Electrical (India) Pvt. Ltd./ Successful bidder of the sole property of the Corporate Debtor consisting of land and building against the impugned order which cancelled the E-auction. 3. Since, both appeals are arising out of same impugned order dated 02.03.2023, on the same subject, therefore these have been clubbed and heard together and are now being dealt in subsequent paragraphs and sha....
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.... the correct dates and times for the several steps of the E-Auction were provided in a tabular form hereunder :- S. No. Particulars Date and Time 1. Submission of EoI 04.04.2022 5.00 pm 2. Submission of KYC documents 07.04.2022 5.00 pm 3. Submission of EMD 07.04.2022 5.00 pm 4. E-Auction 08.04.2022 2.00 pm to 4.00 pm 10. Learned Counsel for the Appellant/Liquidator alleged that the bidders interested in the purchase of the Premises took undue advantage of the typographical error made by the Appellant/ Liquidator despite the same having been rectified later. 11. Learned Counsel for the Appellant/Liquidator further stated after the Auction Notice was made part of the public domain, the Appellant/ Liquidator received a bid, above the Liquidation Value and above the Reserve Price and the Successful Bidder (Respondent No. 3/ Marine Electrical (India) Private Limited) submitted a bid for Rs. 11.6 Crores, submitted the EMD and also a 50% deposit. Learned Counsel for the Appellant/Liquidator stated that, admittedly due to the influence in the market by few individuals/ entities, the Appellant/Liquidator, felt it prudent to proceed with Respondent No. 3/ Marine Electrical (....
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....n." (Emphasis Supplied) 15. Learned Counsel for the Appellant/Liquidator stated that the Adjudicating Authority has erred in imposing the cost of the fresh auction on the Appellant as the auction which has been conducted and the sale of the Premises is legal. 16. Learned Counsel for the Appellant/Liquidator submitted that the Adjudicating Authority has failed to appreciate that the Appellant acting in his official capacity as the Liquidator has the right to accept or reject any bid in consonance with the terms and conditions of the auction process. In support of this, the Appellant relied on the judgment of the Hon'ble Supreme Court in Civil Appeal No. 2024 and 2025 of 1972 titled "State of Orissa & Ors. Vs. Harinarayan Jaiswal & Ors." decided on 14.03.1972. 17. Concluding his remarks, Learned Counsel for the Appellant/Liquidator submitted that he acted in bonafide manner and in interest to get maximum value out of the property, hence his appeal may be allowed and Impugned Order may be set aside. 18. Learned Counsel for M/s Marine Electrical India Limited (Successful Bidder in E-auction)/ Appellant in Company Appeal (AT) (Insolvency) No. 695 of 2023 submitted that the Liq....
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....ed and entire sale took place without any inspection. Learned Counsel for the Respondents assailed the conduct of the Liquidator who finished the entire exercise within five days including Saturday and Sunday without giving reasonable time. Learned Counsel for the Respondents stated that even the corrigendum on the IBBI website and newspapers was published on 08.04.2022 and 09.04.2022 after the sale was concluded. 24. Learned Counsel for the Respondent No. 1 also alleged that in fact only one working day i.e. Monday was given for submission of documents and no time was provided to do due diligence including site visit, execute the required documents and to arrange for funds for Rs. 11.15 Crores and submission of EMD accordingly. 25. Learned Counsel for the Respondent No. 1 emphasised that the entire exercise of E-auction was done with fraudulent intention and the entire process is to be considered wrong as upheld by this Appellate Tribunal in case of Raj Singhania Vs. Chinar Steel Segment Centre Pvt Ltd., (2022 SCC OnLine NCLAT 225), where it was held that material irregularity in conduct of auction vitiate the entire process of auction. 26. Learned Counsel for the Respondent No....
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.... completing the E-auction exercise. We also take note of serious allegations of the Respondent No. 1 that entire auction was conducted in flat five days including weekend. 30. We are not in position to appreciate any solid grounds for such hurry since at least two bidders shown their interest for the said property and have given their EMDs of Rs. 1.15 Crores. The averment of the Liquidator that he was trying to do away wrongful influence by few individuals/entities is not convincing at all and rather create suspects in the mind regarding true intentions. It is seen that date of publication of final E-auction notice is 02.04.2022 with merely one working day (Monday) to submit KYC, another three days upto 07.04.2022 to submit EMD of Rs. 1.15 Crores and finally one more day upto 08.04.2022 to give bids. Thus, the entire liquidation process was supposed to be completed in one week. Although, no specific timelines have been given in the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016, normally notice period of 30 days is given to get best value. In this connection, as a referring point only, we would like to refer to the provision of sub-rule (6) of Rule....