TaxTMI 
TaxTMI 
TaxTMI 
2025 (3) TMI 973
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.... Mumbai Bench in IA No.722 of 2024 and IA No.1693 of 2024 respectively. 2. Brief facts of the case giving rise to these two appeals are as follows:- 2.1. The CIRP against the Corporate Debtor- Trans Fab Power India Pvt. Ltd. commenced vide order dated 30.08.2019. Appellant, Suspended Director of the Corporate Debtor submitted a Resolution Plan in the CIRP of the Corporate Debtor which came to be approved by the Adjudicating Authority vide order dated 25.03.2021. Appellant (Resolution Applicant) failed to execute the plan. CoC decided to liquidate the Corporate Debtor. On an application filed by the Resolution Professional, an order dated 28.06.2023 was passed by the Adjudicating Authority directing for liquidation of the corporate debtor. Liquidator issued an e-auction notice dated 01.09.2023 for sale of corporate debtor as a going concern. The Respondent No.1- 'S.M. Electric Works' participated in auction held on 27.10.2023 and was declared as a successful bidder for the bid value of Rs.6, 05, 91, 998/-. On 30.10.2023, a letter of intent was issued by the liquidator in favour of successful bidder. The successful bidder had paid an amount of 25% of the total bid amount on 25.01.2....
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....e provision of Clause 1(12) of Schedule 1 is a mandatory provision and there was no jurisdiction of the liquidator or SCC to extend the time. Adjudicating Authority committed error in passing the order dated 27.02.2024 granting 60 days' further time to the successful bidder to make the balance payment which order is not in accordance with the Liquidation Regulations 2016 and deserves to be set aside. Counsel for the Appellant has relied on the judgment of this Tribunal in "Potens Transmissions & Power Pvt. Ltd. vs. Gian Chand Narang- Company Appeal (AT) (Ins.) No.532 of 2022" decided on 12.05.2022 as well as the judgment of the Hon'ble Supreme Court in "Civil Appeal Nos.9059-9061 of 2022- "V.S. Palanivel vs. P. Sriram, CS, Liquidator, Etc.". Counsel for the Appellant submits that when the sale itself was liable to be cancelled and has rightly been cancelled by the liquidator, there is no question of approval of sale by the Adjudicating Authority by subsequent order dated 15.07.2024, hence, the said order also deserves to be set aside. 5. Counsel for the successful bidder opposing the submissions of the Appellant submits that the Appellant who is Suspended Director of the Corporate....
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....t.: Provided further that the sale shall be cancelled if the payment is not received within the period provided under this clause.]" 9. Counsel for the Appellant submitted that it is no more res integra that the provisions of clause 12 are mandatory and there is no jurisdiction in the liquidator or SCC to extend the period and in the present case, liquidator has rightly cancelled the sale after successful bidder failed to make the payment. Reliance has been placed on judgment of this Tribunal in "Potens Transmissions & Power Pvt. Ltd. vs. Gian Chand Narang" (supra) where it was held that the provisions of clause 12 are mandatory. In the above case, an application was filed by auction purchaser where appellant had made various prayers. Liquidator also filed an application seeking permission to cancel the sale. Facts have been noticed in paragraphs 2 and 3 of the judgment which are as follows:- "2. This Appeal has been filed against the Order dated 25th April, 2022 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Principal Bench) in I.A. No. 3153 of 2021, I.A. No. 5255 of 2021 and I.A. No. 4317 of 2021. The Appellant is the Auction Purchaser whose bi....
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....e by the auction purchaser to deposit the amount. 11. The above case is a case where Adjudicating Authority has rejected the application of successful bidder and allowed the application of liquidator permitting him to cancel the sale. This Tribunal in the above case has held that the provision of Clause 12 Schedule 1 is mandatory. No exception can be taken to the law as declared by this Tribunal in the above case. 12. Counsel for the Appellant has also relied on the judgment of the Hon'ble Supreme Court in "V.S. Palanivel vs. P. Sriram, CS, Liquidator, Etc.". The above was a case which was filed by shareholder/ managing director of the corporate debtor challenging the order of the NCLT against which three appeals filed by the appellant were dismissed. In the above case also, successful bidder could not pay the amount within 90 days and an application was filed by the successful bidder for extension of time which application was allowed by order dated 05.05.2020 against which Company Appeal (AT) (CH) (Ins.) No.343 of 2021 was filed which was dismissed. In the facts of the above case, the Hon'ble Supreme Court had occasion to consider the Schedule 1 of the Liquidation Regulations 2....
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....the Applicant, praying for the following reliefs: a) That this Honorable Tribunal may be pleased to approve the sale of the Corporate Debtor as a going concern to the successful bidder viz. S.M. Electric Works. b) That this Honorable Tribunal may be pleased to issue following directions with respect to the sale of the Corporate Debtor as a going concern: i. Writing-off the entire existing shareholding of the Corporate Debtor and issuance of fresh equity shares to the successful bidder. ii. Continuation of the authority, powers and obligations of the Liquidator to complete the liquidation proceedings and also control and operate the liquidation account. iii. Payments to the stakeholders in accordance with Section 53 of the Code; iv. Protection of the successful bidder from all claims, liabilities. etc. pertaining to the period prior to liquidation commencement date of the Corporate Debtor. v. The Registrar of Companies shall change the status of the Corporate Debtor from 'In Liquidation' to 'Active'." 16. The liquidator, thus, approached the Adjudicating Authority for approval of the sale after receiving the entire amount and prayed for certain reliefs....