TaxTMI 
TaxTMI 
2024 (6) TMI 135
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....nal, Chennai Bench (in short 'Adjudicating Authority') under Section 61 of the Insolvency & Bankruptcy Code, 2016 (in short 'Code') refusing to revise timeline for making balance payments and instead directed forfeiture of the amount already by the Appellant, in case of failure on the part of the Appellant to adhere the timelines. Similarly, the Appellant, in Company Appeal (AT) (Insolvency) No. 443 of 2022 challenged the Impugned Order 29.06.2022, whereby the Adjudicating Authority directed to forfeiture the entire amount paid by the Appellant on any deviation from timeline set up by the Adjudicating Authority. 2. The Respondent in both the Appeals is Mr. Ramakrishnan Sadasivan, Liquidator of Surana Industries Limited (in short 'Corporate Debtor'). 3. The Appeals were heard by the Bench consisting of Hon'ble Mr. Justice M. Venugopal, Member (Judicial) and Hon'ble Ms. Shreesha Merla, Member (Technical) of this Appellate Tribunal. However, they have passed two different Impugned Orders dated 20.10.2023. Since, there was difference of opinion between the Member (Judicial) and Member (Technical), this matter was placed before the Hon'ble Chairperson for guidance, whereby the ....
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....0.06.2021 and no acceptable bids were received and therefore, it was decided to sale the Raichur Assets at the scrap value of approximately Rs. 50 Crores and the same was communicated to the Creditors at Stakeholders Meeting held on 31.07.2021 . 8. It is the case of the Appellant that during this period, he came to know about the Raichur Assets and being interested in these assets, the Appellant made an offer of more than twice the amount of scrap value i.e., Rs. 105.21 Crores on 09.09.2021. 9. At this stage, we also note that the liquidation value of Raichur Assets based on valuation done in December, 2018 was Rs. 338.01 Crores which was reduced in the Second valuation done on August, 2019 to Rs. 227.31 Crores and finally the liquidation value was further downgraded in third valuation done in August, 2020 to Rs. 117.23 Crores. As noted earlier, since no acceptable bids were received, the scrap value was determined as Rs. 50 Crores. 10. The Stakeholder's Consultation Committee (in short 'SCC') in its 9th Meeting dated 15.09.2021 agreed to sale the Corporate Debtor as a going concern to the Appellant for a sale consideration of Rs. 105.21 Crores. 11. The Appellant submit....
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....ing had consented to the sale of the Corporate Debtor as a Going Concern to the Respondent for a sale consideration amounting to Rs. 105.21 Crores. A copy of the minutes of the 9th Meeting of the Stakeholders is annexed herewith as ANNEXURE A8. 16. The Respondent has also deposited an amount of 10% of the sale consideration amounting to Rs. 10.521 Crores as a Commitment Advance prior to the filing of this application and had agreed to remit the balance sale consideration within 15 days of approval of the proposal by this Hon'ble Tribunal. It was made clear to the Respondent that the receipt of the Commitment Advance was in no way a final acceptance of the proposal and it was received without prejudice to any terms or conditions as may be stipulated by this Hon'ble Tribunal. The Commitment Advance shall be forfeited if the applicant is found to be ineligible under Section 29A of the IBC (as amended from time to time) or is found to have made a false or misleading declaration of eligibility under Section 29A of the IBC (as amended from time to time). Further, the Commitment Advance shall also stand forfeited if the Respondent fails to complete the acquisition of the ....
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....* Out of the amount of Rs. 15,78,15,000/- payable on 18th April, 2022, already an amount of Rs. 5,00,00,000/- was paid on 12th April, 2022. * The last installment of 50% shall be coupled with a grace period of 15 days extended till 30th May, 2022. Mr. Drabesh Jha expressed his sincere thanks to the members for the patient co-operation extended so far in the process and requested the members to place reliance on the buyer, since maximum efforts are being made to complete the Process before 30th April, 2022 Only as a measure of prudence, and factoring any unforseen circumstances the maximum timeline is being extended till 30th May, 2022. Interest on delayed payments: The prospective buyer also agreed that all payments made post 15th April, 2022 shall be coupled with payment of interest charged at the rate of @ 12% P.A." (Emphasis Supplied) 19. As per above, for the payment of entire money of Rs. 105.21 Crores, the Appellant submitted that the maximum time limit was to be extended upto 30.05.2022, keeping in view the unforeseen circumstances. Further it was decided to levy interest on delayed payment @12% per annum. 20. It has been br....
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....ance 50% of the sale consideration i.e., 34.60 Crore with 12% interest from 15.04.2022 till the date of payment. ii. The remaining sum of Rs. 34.60 Crore shall be paid on or before 31.07.2022 with 12% interest from 15.04.2022 till the date of payment. iii. The Applicant is directed to strictly comply with the said timelines. Any deviation from the same would amount to forfeiture of the entire amount paid by the Applicant" (Emphasis Supplied) 25. The Appellant submitted that he filed separate appeal assailing the said order of the Adjudicating Authority dated 29.06.2022 which inter-alia provided for forfeiture of entire amount paid by the Appellant. In this connection, the Appellant pointed out that by this time he has already paid Rs. 36.8 Crores including an upfront payment of commitment advance of Rs. 10.52 Cores. 26. The Appellant pleaded that he was making all efforts to make the balance payment, however, he came to know that the Enforcement Directorate (in short 'ED') had contemplated action against the former Directors of the Corporate Debtor and were contemplating attaching some of the assets of the Corporate Debtor. The Appellant also came t....
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.... long period, it would be difficult to place any proposal for further extension, before their legal department due to lack of sufficient justification and therefore the stakeholders may not accept or grant any extension except to adhering the NCLT Order directing the forfeiture of the amounts paid by the buyer in case of default in the specified timelines. * All the other lenders present also concurred with the views of IDBI Bank. * The lenders stated that time and again the buyer is coming up with a reason for extension of time and at the verge of completion of the extended period, a further extension is sought. This keeps on repeating and there is no certainity regarding the completion of the entire payment. There is no concrete proposal or timeline from the buyer's side which doubts the intention of fulfilling the payment obligations. * Moreover the extended Liquidation Period is about to come to a closure on 2nd October, 2022 based on the NCLT Order dated 9th June, 2022. So hardly 2 months is left for completion of the sale process. Based on the pattern followed by the buyer in the recent past, there is no surety that they will honour their payment ob....
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....referred the present appeal before this Appellate Tribunal. 34. We will go into details of relevant portion of the Impugned Order dated 10.08.2021, which is as under :- "7. The Applicant/successful bidder therefore file Application viz. IA (IBC)/512(CHE)/2022 before this Tribunal on 28.04.2022 seeking extension of time for making the balance payment. The aforesaid IA, was heard and decided by this Tribunal and an order was passed on 29.06.2022 and the order is as follows:- (i) "The Applicant is directed to pay in or before 30.06.2022 the balance 50% of the sale consideration le. 34.60 Crore with 12% interest from 15.04.2022 till the date of payment. (ii) The remaining sum of Rs.34.60 Crore shall be paid on or before 31.07.2022 with 12% interest from 15.04.2022 till the date of payment. (iii) The Applicant is directed to strictly comply with the said timelines. Any deviation from the same would amount to forfeiture of the entire amount paid by the Applicant This order was accepted by applicant but did not follow the payments terms. 8. It is reported that the Applicant/successful bidder has made a total payments of only Rs.37.8....
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....ich is apparent from the Press Release. Therefore, the Learned Senior Counsel submitted that the time period should be extended to him, so that he will be able to make further payment and clear the issue. 14. At this juncture, we raised certain queries to the Senior Counsel Mr. Virender Ganda appearing for the Applicant / Buyer. The time for payment was 15.04.2022 for the balance payment of approx Rs.95 Crores as per Order dated 22.03.2022 passed by this Tribunal. As to why the Applicant paid meagre sums on various dates, as recorded by the Liquidator on page 40 and @ para 8 above to this there is no proper explanation from the Learned Senior Counsel except the Enforcement Directorate press note. 15. We also called upon the Learned Senior Counsel Mr. Virender Ganda to state whether in this Application, is there any documents placed on record to show the bonafide of this Applicant as to whether he is having the capability or capacity to pay the entire balance amount of approx Rs.95.00 Crores, which should have been paid on or before 15.04.2022 or during the time as extended vide order dated 29.06.2022. To this the Learned Senior Counsel has stated that no ....
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....ies Ltd., should be quashed as per prayer(a). To this, our clear- answer is NO, because the Liquidator issued the consequential letter based on the final order passed by this Tribunal on 29.06.2022, which has set out the time line for the payment and for forfeiture, if there is any deviation on the time line as extracted in para 7 of this order. If the applicant is aggrieved, he has to challenge the order of this Tribunal dated 29.06.2022, which he has not done. Merely challenging the Liquidator's letter dated 2nd August, 2022 will not suffice. The non-payment of the balance amount as directed by the Tribunal, forfeiture becomes automatic. Liquidator has to only implement the Tribunal Order as a consequence. Hence, we find no merit in the plea to set aside the letter dated 02.08.2022. Prayer (a) is rejected. 21. The Applicant dithered in making payment because of certain news going around in the market that Enforcement Directorate has initiated action against the Corporate Debtor. The same is not a ground for non- payment because, it was private sale and at the time of sale, the Applicant purchased the property of the Corporate Debtor under liquidation with open eyes. ....
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....cating Authority has caused a grave injustice to the Appellant and has given undue and illegal enrichment to the Stakeholders of the Corporate Debtor, who were themselves responsible for leading the Corporate Debtor to liquidation. 39. The Appellant emphasised that the sale of the Corporate Debtor as a going concern to the Appellant is governed by Regulation 33(2)(c) r/w Schedule I, entry 2 of the IBBI (liquidation process) Regulations, 2016 and not under Regulation 33(2)(d) of the Liquidation Regulations, 2016. 40. The Appellant also submitted that sale of such assets stand completed in accordance with the 'Term of Sale' or 'Contract' as per entry 2(4) of Schedule 1 of Liquidation Regulations, 2016. 41. The Appellant attempted to present his case that in none of these documents or SCC Minutes, the word 'forfeiture' appeared except with reference to clause 9, proposal of the Appellant which provide for forfeiture of amount deposited as 'Commitment Advance' in case of failure of the Appellant to adhere the timelines. 42. The Appellant further submitted that on 13.04.2022. 10th SCC Meeting granted the extension of timelines for submitting the balance payment till 30.05.20....
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....ity could not levy any condition beyond the contract entered into between the Appellant and the Respondent. The Appellant elaborated that the terms of conditions of private sale are covered under Indian Contract Act, 1872. The Appellant further stated that in terms of the Indian Contract Act, 1872, the "Liquidated Damages", if any, could have been levied only in accordance with Section 74 of the Indian Contract Act, 1872. 47. In this connection, the Appellant cited judgment M/s R.K. Industries (Unit-II) LLP vs. M/s H.R. Commercials Private Limited and Other CA No. 7722 of 2021, where it was held that :- "The jurisdiction bestowed upon the Adjudicating Authority [NCLT] and the Appellate Authority [NCLAT] are circumscribed by the provisions of the IBC and borrowing a leaf from Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Others, they cannot act as a Court of equity or exercise plenary powers to unilaterally reverse the decision of the Liquidator based on commercial wisdom supported by the stakeholders." ( Emphasis Supplied ) 48. The Appellant further pleaded that there is no provision of forfeiture in the Code during liquidatio....
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....mount offered by the Appellant of Rs. 105.21 Crores therefore no amount including the commitment advance paid by the Appellant could have been affected by the Adjudicating Authority. In this regard, the Appellant cited two judgments, namely, Bombay High Court - Sau. Jyoti v. Sau. Sindhubai Ramraoji Shende & Anr., 2017 SCC Online Bom 8181, which reads as under :- "Terms of the contract must be clear and explicit to justify forfeiture of the advance amount. Further, if the amount paid is towards part payment of consideration and not intended to be earnest money, then the forfeiture clause would not apply." and Suresh Kumar Wadhwa v. State of Madhya Pradesh & Ors., (2017) 16 SCC 757 "A right to forfeit being a contractual right and penal in nature, the parties to a contract must agree to stipulate a term in the contract in that behalf. A fortiori, if there is no stipulation in the contract of forfeiture, there is no such right available to the party to forfeit the sum." 51. It is the case of the Appellant that he made the payment of Rs. 37.8 Crores which is more than 30% of the sale consideration as he was genuine purchaser and only due to unforeseen reasons....
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....ppellate Tribunal and relied on the observation made by the Hon'ble Supreme Court in the case of S.J.S. Business Enterprises Pvt. Ltd. v. State of Bihar & Ors. (2004) 7 SCC 166: " The existence of an adequate or suitable alternative remedy available to a litigant is merely a factor which a court entertaining an application under Article 226 will consider for exercising the discretion to issue a writ under Article 226. But the existence of such remedy does not impinge upon the jurisdiction of the High Court to deal with the matter itself if it is in a position to do so on the basis of the affidavits filed." 54. Concluding his remarks, the Appellant pointed out that both the Impugned Orders deserves to be set aside and the Appeals be allowed. 55. Per-contra, the Respondent denied all the averments of the Appellant in both the Appeals, treating these as misleading, mischievous and without any merit. 56. The Respondent submitted that the Appeals have become infructuous since the sale of the Corporate Debtor has been confirmed in favour of Successful Bidder i.e., Texcon Steels Ltd. for Rs. 145.38 Crores, who has already paid the entire money on 28.11.2022 and subsequen....
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....submitted that the Appellant cannot make a virtue out of his own defaults and submitted that several opportunities were given to him in accordance with law, however, the Appellant miserably failed to meet the stipulated timelines and therefore, there was no alternative for the stakeholders but to find an alternative way and thereafter they succeeded in selling the same to Texcon Steel Ltd. for Rs. 145.38 Crores. 62. The Respondent alleged that the Appellant is seeking approbation and reprobation simultaneously, since on one hand, the Appellant is making a case that Stakeholder made wrong enrichment due to forfeiture whereas on the other hand the Appellant alleged that the Respondent have not distributed forfeiture amount within Stipulated 90 days violating Regulation 42 of Liquidation Regulation, 2016. 63. The Respondent reiterated that the Appellant made payments of Rs 1.5 Cr as on 25.07.2023 pursuant to the Impugned Order dated 29.06.2022, thus accepting the order the Adjudicating Authority. The Appellant though filed an appeal challenging the order dated 29.06.2022 before this Appellant Authority on 13.08.2022, did not pursue to same until 24.01.2023 i.e. for around 6 mont....
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....dent strongly refuted that Indian Contract Act, 1872 has anything to do in the present appeals and stated that Section 73 and 74 of the Contract Act, 1872 are not applicable here in the facts of the present case. 70. The Respondent highlighted that the sale was made to the Appellant through a private sale which was required to be approved by the Adjudicating Authority in accordance with the Liquidation Rules, 2016 and this fact is unambiguous and clear. 71. The Respondent submitted that since, several concessions were sought by the Appellant, the Respondent had to approach the Adjudicating Authority to approve the sale as a going concern to the Appellant and therefore, although this was a private sale, it was a sale approved by the Adjudicating Authority and therefore, is not covered under Section 73 and 74 of the Indian Contract Act, 1872. The Respondent cited the judgment of this Appellate Tribunal where similar position was upheld in the case of Westcoast Infraprojects Private Limited Vs. Ram Chandra Dallaram Choudhary Company Appeal (AT) (Insolvency) No. 1258 of 2022. 72. The Respondent, denied that there has been undue enrichment at the cost of the Appellant and state....
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....present appeals, would be applicable for private sale or the private sale would be covered as per provisions of the Code r/w Liquidation Regulation, 2016. (iii) Whether Section 73 and 74 of the Indian Contract Act, 1872 are applicable in the present appeals. (iv) Whether, application was made before the Adjudicating Authority only for seeking exemptions in terms of Liquidation Regulation, 2016 or for confirmation of the private sale in favour of the Appellant. (v) Whether, the Adjudicating Authority has power to impose the conditions not recommend by SCC as contained the Impugned Order dated 29th June, 2022 w.r.t. forfeiture of the amount paid by the Appellant. (vi) Whether liquidated damages, if any, in the manner of forfeiture, could have been recovered from the Appellant. (vii) Whether, the minutes of the 10th SCC were unanimous decision or only recorded the submission made by the Appellants. (viii) Whether, the filing of the Writ Petition by the Appellant before the Hon'ble High Court of Madras and not disclosing before the Tribunal/ Appellate Tribunal was concealment of information by the Appellant. (ix) Whether, t....
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....ions are met. ➢ The condition 33(2)(a) is applicable when assets is perishable and Regulation 33(2) (b) is applicable when asset is likely to deteriorate its value if not sold immediately. These two conditions are not applicable in the present appeals. ➢ It is the case of the Appellant that the private sale was done in terms of Regulation 33 (2) (c) i.e., when assets is sold at a price higher than the reserve price of a failed auction. On the other hand, the Respondent has taken a strong plea that a private sale was made in terms of Regulation 33(2)(d) i.e., private sale subject to prior permission of the Adjudicating Authority is required to be obtained. ➢ It is a fact that there have been several attempts to auction the Raichur Assets which failed. It is also a fact that assets were sold at the price higher than the reserve price of a failed auction. However, we note that the Appellant sought several concessions and relief while giving his bid for Rs. 105.21 Crores. These reliefs were obviously not within the domain of liquidator or the Stakeholder Committee and were required to be approved by the Adjudicating Authority. &#....
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.... that the sale was proposed under Regulation 33(2)(d) and the relevant portion of the minutes reads as under :- List of the Proposal submitted by Shri Karshnt Alloys Private Limited: S.No. Description 1. Amount of Sale Consideration Rs. 105.21 Crores 2. Amount of Commitment Advance (received) Rs. 105.21 Crores (10% of the total sale consideration) 3. Date of remittance of Balance Sale Consideration Within 15 days from the date of approval of the sale by Hon'ble NCLT 4. Regulation 32- Manner of sale As per Regulation 32(e) - Sale of the corporate debtor as a going concern 5. Regulation 33 - Mode of Sale As per Regulation 33(2)(d) - Sale by means private sale 6. Comfort Letter for the payment of Balance Sale Consideration The Buyer has submitted a Letter of Comfort from M / s Kamal Renu Credit & Invest Private Limited stating their intention to provide Financial support to Shri Karshni Alloys Private Limited for acquisition and running operations of the Corporate Debtor ( Emphasis Supplied ) ➢ We further take into consideration that IA filed by the Appellant bearing I.A No. 512 of 2022 in I.A.....
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....strictly comply with the said timelines. Any deviation from the same would amount to forfeiture of the entire amount paid by the Applicant." ( Emphasis Supplied ) ➢ In this connection, we would also refer to the powers which permits the Adjudicating Authority to consider such request for extension of time. We note that the Adjudicating Authority has power to extend the time in terms of Rule 15 of NCLT Rules, 2016 which reads as under :- "15. Power to extend time.- The Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore is not made until after the expiration of the time appointed or allowed." (Emphasis Supplied) This rule empowers the Tribunal to extend the time fixed by these rules or fixed by any other orders, upon such terms, if any, as the justice of the case may require. ➢ From the facts of the present case, it is noted that the sale of Raichur Assets has seen prolonged history and only after 13 consecutive fa....
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.... Amount (in Crores) December, 2018 338.01 August, 2019 227.31 August, 2020 117.23 ➢ It is a fact that the Appellant offered his bid of Rs. 105.21 Crores which was accepted by the SCC and approved by the Adjudicating Authority. However, the Appellant failed to make the payments in time even by extended timelines and the private sale was cancelled and the amount was forfeited by the SCC. The SCC further authorised the Respondent to conduct a fresh auction and finally the assets of the Corporate Debtor were sold to Texcon Steel Ltd. for Rs. 145.38 Crores. ➢ Hence, the contention of the Appellant prima-facie seems attractive as the Respondent received more than Rs. 105.21 Crores. However, looking from other perspective, it is a fact that the Financial Creditors could not recover the outstanding dues and also could not sale the assets even finally at the first liquidation value of Rs. 338.01 Crores. ➢ Be that as it may, the Adjudicating Authority after examining of the merit did stipulate the condition regarding forfeiture of the money in the case of failure of the Appellant to pay in time of the amount already paid by....
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....held the order regarding forfeiture of the money overruling the objection of the Applicant that case. It is also pertinent to note that the Hon'ble Supreme Court has further intended that time is a crucial facet of a scheme under the IBC and allowing proceeding and indefinite delay cannot be allowed. ➢ We will also refer to the decision of the Hon'ble Supreme Court of India in the case of Authorised Officer, State of Bank of India vs. C. Natarajan & Anr. Civil Appeal no. 2545 of 2023, where Hon'ble Supreme Court of India held that :- "24. The up-shot of the aforesaid discussion is that whenever a challenge is laid to an order of forfeiture made by an authorized officer under sub-rule (5) of rule 9 of the Rules by a bidder, who has failed to deposit the entire sale price within ninety days, the tribunals/courts ought to be extremely reluctant to interfere unless, of course, a very exceptional case for interference is set up. What would constitute a very exceptional case, however, must be determined by the tribunals/courts on the facts of each case and by recording cogent reasons for the conclusion reached. Insofar as challenge to an order of forfeiture that ....
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....agreement - a course of action permitted by sub-rule (4). On 20th October, 2017, the contesting respondent made a further request for extension of time by 15 days citing pendency of proceedings at the instance of Stallion before the DRT. This request came to be rejected by the Authorized Officer by his letter dated 21st October, 2017 referring to absence of any order of stay in operation and that the contesting respondent was free to deposit the balance amount of sale price and take possession of the auctioned immovable property. The contesting respondent not having deposited the balance amount of sale price by 23rd October, 2018, the mutual agreement for extension of time, thus, lapsed with effect from 24th October, 2017. This resulted in the order of forfeiture being passed by the Authorized Officer in terms of sub-rule (5). 26. We do not see reason to hold that there has either been any manifest arbitrariness or unreasonableness, which warranted interdiction with the order of forfeiture. The contesting respondent in terms of the statutory ordainment was required to pay the balance amount of sale price on or before 15 days of confirmation of sale. Days prior to expiry of....
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....uction purchaser, another recovery proceeding would have to be initiated by the secured creditor in terms of Section(s) 73 and 74 of the 1872 Act to recoup the loss and expenditure occasioned to it by the defaulting successful auction purchaser. (ii) Secondly, such an interpretation would allow unscrupulous borrowers being hands-in-glove with the auction purchasers to use subversive methods to participate in an auction only to not pay the balance amount at the very end and escape relatively unscathed under the guise of Section(s) 73 and 74 of the 1872 Act, thereby gaming the entire auction process and leaving any possibility of recoveries under the SARFAESI Act at naught. [See; C. Natarajan (supra) at Para 19] 65. Thus, such an interpretation would completely defeat the very purpose and object of the SARFAESI Act and would reduce the measures provided under Section 13 of the SARFAESI Act to a farce and thereby undermine the country's economic interest. 90. We are conscious of the decision of this Court in Kailash Nath Associates v. Delhi Development Authority & Anr. reported in (2015) 4 SCC 136 wherein it was held that Section 74 of the 1872 Act will be a....
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....decision of Kailash Nath (supra) and leave it at that. Suffice to say, in view of the above discussion, Section(s) 73 and 74 of the 1872 Act will have no application whatsoever, when it comes to forfeiture of the earnest-money deposit under Rule 9 sub-rule (5) of the SARFAESI Rules 105. The High Court whilst passing the impugned order thought fit to reduce the extent of amount forfeited in view of the subsequent sale of the Secured Asset by the appellant bank at much higher price than the previous auction. This in the High Court's opinion meant that no loss had been caused to the appellant bank, as it had duly recovered more than its dues from the subsequent sale and as such was not entitled to forfeit the entire amount of deposit as doing so would amount to unjust enrichment, which is not permissible by the SARFAESI Act. 106. However, we are not in agreement with the aforesaid observations of the High Court. When an auction fails and a fresh auction is required to be conducted in respect of the Secured Asset, there looms a degree of uncertainty as to the extent of bids that may be received in the future auction or whether the fresh auction would even be successfu....
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.... of the entire deposit under Rule 9 sub-rule (5) of the SARFAESI Rules by the appellant bank after having already recovered its dues from the subsequent sale amounts to unjust enrichment." (Emphasis supplied) ➢ We consciously note that although above judgment is w.r.t. SARFAESI Act, however, is equally applicable to present case as the basic issues of applicability of Section 73 and Section 74 of Indian Contract Act, 1872 in auctions as well as undue enrichment by banks have been covered. We are guided by the same and accordingly find the merits in the pleadings of the Respondent. ➢ Hence, the contention of the Appellant that since, the Stakeholders could manage to sale the Raichur Assets at much higher value of Rs. 145.38 Crores against his offered bid of Rs. 105.21 Crores and therefore the money paid by the Appellant, should not have been forfeited, is not sustainable. ➢ As regard another issue whether the minutes of the 10th SCC were unanimous endorsing extension of time as proposed by the Appellant herein or the Stakeholders did not agree to the same, we would like to refer to the relevant portion of the 10th SCC Meeting,....
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.... Impugned Order dated 29.06.2022 extended the timelines but also stipulated condition regarding forfeiture. We have already noted that in the earlier discussion that the clause of forfeiture was added by the Adjudicating Authority in terms of Rule 15 of the NCLT Rules, 2016. It is settled principle based on doctrine of approbation and reprobation that party can either accept benefit arising of the same order or can challenge the same but not both. ➢ In the present case vide the Impugned Order dated 29.06.2022, the Appellant got liberty and benefits from the Adjudicating Authority regarding extension of timelines. The Appellant was also subjected to condition that in case of his failure to make all payments within stipulated timelines, the money paid by him shall stand forfeited. ➢ We also note that this specific clause was not challenged at that stage and two installments regarding payment for purchase of Raichur Plants were made i.e., on 13.07.2022 and 25.07.2022 which is after passing of the Impugned Order dated 29.06.2022. Although in the present appeal, the Appellant challenged the stipulation of forfeiture conditions, however, while making the p....
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.... TRUE COPY $ Document 2 1 The Prospective buyer had proposed a revised schedule of payment as follows:- Date of payment % of payment Amount (in Rs.) Total amount to be paid 1,05,21,00,000 Amount already paid on 10-09-2021 10% 10,52,10,000 Balance to be paid 15-04-2022 15-05-2022 30-05-2022 15-06-2022 28-06-2022 15% 15,78,15,000 10% 10,52,10,000 10% 10,52,10,000 10% 10,52,10,000 45% 47,34,45,000 Mr. Drabesh Jha, Authorised Representative of the Prospective Buyer expressed their inability to make the entire payment before 15th April, 2022. He stated that the Investors who were supposed to fund the proposal, had invested the funds elsewhere since a period of 6 Months had elapsed from the date of Filing of Application. Nevertheless efforts are being made to make ends meet through Personal resources and with other new investor for the project. Having briefed on the current position, the views of the lenders were sought in this regard, who in turn stated as follows:- • • Since a Court Order on the approval of the Sale of the Corporate Debtor as a Going Concern ....