TaxTMI 
TaxTMI 
2025 (1) TMI 1686
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....rim Resolution Professional who was replaced by Vikram Bajaj as RP on 17.04.2018. 2. The RP filed an application bearing I.A. No. 412 of 2020 under Section 33(1)(a) of the Code for liquidation of the CD which was allowed by the Tribunal on 01.03.2021 and the RP was appointed as the Liquidator." 3. The order dated 01.02.2021 was challenged by the suspended director of the CD in appeal i.e. CA (AT) (Ins) No. 276 of 2021. In the said appeal, the Appellant prayed for stay which was not granted vide order dated 05.04.2021 against which the said appellant filed an appeal before the Hon'ble Supreme Court bearing CA No. 2471 of 2021 which was dismissed on 30.07.2021. 4. The Liquidator issued e-auction notice on 25.10.2021. The said auction notice is reproduced as under :- 5. The subject matter of this appeal is the land measuring 68K 17M situated at village Nangal Khurd Tehsil, Dist. Sonepat, Haryana which is shown at item no. 5 in the said notice. 6. The Liquidator also issued e-auction process document on 25.10.2021 in which details of the land comprised in lot 5 has been given which is as follows :- Note 3 - Details of Land Comprised in Lot 5 i) Jand....
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....of the Liquidator as and when demanded. F. All payment made by the Bidder(s) under the e-auction shall be intimated to the Liquidator [email protected] and [email protected]. The Entire Amount paid by the applicant / bidder including the Earnest Money Deposit can be forfeited at any time, upon the occurrence of any of the following events: I. If any of the conditions under this Document are breached by the Bidder(s) or in case the Bidder(s) is / are found to have made any misrepresentation or II. If the Bidder(s) is / are found to be ineligible to submit the bid under Section 29 and Section 35(1) (1) of the IBC (as amended from time to time) or is / are found to have made a false or misleading declaration of eligibility under Section 29A and Section 35(1) (f) of the IBC . (as amended from time to time); or III. If the Bidder(s) is / are identified as the Successful Bidder(s) and fails to pay balance sale consideration as per terms of the sale. IV. If the Bidder(s) is / are found to have indulged in any of fraudulent or corrupt practices. 8. In para 15 of the process document, the timeline was provided which is also repro....
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....ter the process of Liquidation, for whatever reasons, any orders/ instructions/ guidance is passed by Hon'ble NCLT to intervene the Liquidation process, the same shall be binding on all the bidders without having claim or damages whatsoever. 9. E-auction took place on 15.11.2021. The highest bidder, namely, Respondent/ASJ Fin solutions Pvt. Ltd. sent an email on 15.12.2021 at 11:09 AM to the Appellant alleging that EMD of 25% amounting to Rs. 6,39,00,000/- out of bid amount of Rs. 25,56,00,000 has already been paid and the balance sale consideration of Rs. 19,17,00,000 shall be deposited by 14.02.2022 with interest at the rate of 12% p.a. The said email is reproduced as under :- 10. On 16.11.2021 the Appellant sent an email to Respondent informing it clearly that if the amount of balance sale consideration is not paid by outer limit of 14.02.2022 then amount deposited in respect of lot no. 5 shall be forfeited. The email dated 16.11.2021 is also reproduced as under :- 11. Thus, according to the terms and conditions of the sale, Respondent was to deposit the balance amount of Rs. 19,17,00,000/- within 30 days i.e. up to 16.12.2021 and in case it was not deposited by 16.....
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.... "13. In view of the above facts, we find merit in the contention of the respondent that the applicant had complete knowledge of the fact that the fractional land 14M (i.e. 0.0876 acres) out of total 68 K 17 M (8.60625 acres) the original title deeds are not available with the respondent. In view of such facts, we are of the view the applicant has wilfully defaulted in the payment of the balance amount of Rs. 19.17 Crores within the stipulated period. Considering the fact that the liquidation proceedings are strictly time-bound and sufficient time has already elapsed from the date of default in payment, no further extension of time is to be allowed for the payment of the balance amount." 16. The Respondent challenged the order dated 31.03.2023 by way of an appeal i.e CA (AT) (Ins) No. 492 of 2023 before this Court which was also dismissed on 21.04.2023. The operative part of the order read as under :- "6. The factum of litigation by Writ Petition in High Court by a third party and suit by certain parties in the property cannot be ground for the Successful Bidder of not making payment of balance amount. The balance amount was to be deposited within the time as r....
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....course but the Respondent challenged both the orders dated 31.03.2023 and 21.04.2023 by way of a writ petition before the Hon'ble High Court of Punjab and Haryana bearing CWP No. 13489 of 2023 which was also dismissed on 18.12.2023 with the following observations :- "11. Keeping in view facts and circumstances as above the writ petition is dismissed with liberty to petitioner to avail remedy(ies) as available in accordance with law. There is no expression of opinion on the merits of the pleas as raised in this writ petition with reference made thereto is only for purpose of decision of this writ petition" 18. After the aforesaid decision, the Respondent sent an email dated 01.04.2024 for refund of the EMD in response to which the Appellant informed the Respondent vide email dated 15.04.2024 that the said amount has been forfeited. Thereafter, the Respondent filed the application I.A. No. 1047 of 2024 under Section 60(5) of the Code for refund of 25% of the bid amount alongwith interest which was deposited in the auction for lot no. 5 held on 15.11.2021. the said application has been allowed by the Tribunal vide the impugned order dated 02.07.2024 directing the Appel....
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.... the Adjudicating Authority and even this Court is not conferred with jurisdiction to deal with the grounds of fairness and equity rather the Tribunal is bound to abide by the statutory provisions of the Code which is a complete code in itself. In this,regard, he has relied upon a decision of the Hon'ble Supreme Court in the case of Pratap Technocrats (P) Ltd. & Ors. Vs. Monitoring Committee of Reliance Infratel Limited & Anr., Civil Appeal No. 676 of 2021. 25. He has also submitted that the Tribunal has erred in relying upon a decision in the case of Authorised Officer, Central Bank of India Vs. Shanmugavelu, Civil appeal No. 235-236 of 2024 and Authorised Officer of State Bank of India Vs. C. Natrajan & Anr., Civil Appeal No. 2545 of 2023 which applies to provisions of SARFAESI Act, 2002 and not the order passed under the Code. 26. On the other hand, Counsel for the Respondent has submitted that issue regarding forfeiture of EMD was challenged for the first time before the Hon'ble P & H High Court in CWP No. 13489 of 2023 in which liberty was granted to the Respondent to avail remedies available in law, pursuant to which the Respondent had filed I.A No. 1047 of 2024....
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....pra) and the Authorised Officer, Central Bank of India (Supra) to contend that a trinity test has been laid down by the Court as to whether or not a successful auction purchaser is entitled to refund of EMD and the said trinity test is applicable as a general principle / rule in all cases of refund of EMD and it cannot be restricted to the SARFAESI as submitted by the Appellant. He has further submitted that Respondent had always bonafide intention to pay the balance amount which is evident from the communication made to the Appellant and also had the financial capacity for the same. It is submitted that in the same auction, the Respondent's sister concern, namely, M/s SPJ Properties Pvt. Ltd. participated for Lot No. 4 separately and was declared the successful bidder at Rs. 9.26 Cr. and had made the payment within the stipulated period. It is further submitted that the litigation initiated by M/s Aggarwal Trading Company before the Hon'ble High Court and the Tribunal were subsequent to the publication of the Bid document and same could not have been contemplated either by the Appellant or by the Respondent herein and had created huge uncertainty regarding the title of the....
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....ly receives a benefit which would be unconscionable to retain. In the leading case of Fibrosa v. Fairbairn, [1942] 2 All ER 122, Lord Wright stated the principle thus : "... (A)ny civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and are now recognized to fall within a third category of the common law which has been called quasi-contract or restitution." 32. It is further submitted that the Tribunal has examined the case on the angle of trinity test and has passed the impugned order which does not call for any interference. 33. We have heard Counsel for the parties and perused the record with their able assistance. 34. The admitted facts of this case are that the liquidator issued e-auction notice on 25.10.2021 which include lot no. 5 (in question in the present case) bearing 68K 17 M situated at village Nangal Khurd Tehsil, Dist. Sonepat, Haryana. In the e-a....
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....the Tribunal but the said application was withdrawn on 22.09.2022. 37. The Respondent also filed one application bearing CA No. 85 of 2022 under Section 60(5)(c) of the Code seeking direction to liquidator claiming chain documents of the property as has been done by the M/s Aggarwal Trading Company before depositing the balance sale consideration. It is interesting to note that the said application was dismissed on 31.03.2023 by the Tribunal holding that the Respondent had complete knowledge of the fact that of the fractional land 14M (i.e. 0.0876 acres) out of total 68k 17M (8.60625 Acres) the original title deeds are not available with the Appellant. It was further held that "in view of such facts, we are of the view that the applicant has wilfully defaulted in the payment of the balance amount of Rs. 19.17 Cr within the stipulated period. Considering the fact that the liquidation proceedings are strictly time bound and sufficient time has already elapsed from the date of default in payment, no further extension of time is to be allowed for the payment of the balance amount" Interestingly, the order dated 31.03.2023 by which the Tribunal has held that the Respondent was to be ....
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....is order has merged in the order passed in appeal filed by the Respondent which was dismissed on 21.04.2023 in which it has been further held that the balance amount was to be deposited by the Respondent within the time prescribed to which there cannot be any exception and it has also been categorically held that "prayer 'a' in the application which was filed through I.A No. 3153 of 2021, itself is indicative that Appellant was never interesting in making the payment and he by different prayers wanted to prolong the proceedings" These findings recorded against the Respondent were never challenged by the Respondent by way of an appeal and attained finality. The writ petition filed to challenge the order dated 31.03.2023 and 21.04.2023 was also dismissed against which no further proceedings were initiated before he Hon'ble Apex Court by way of a Special Leave Petition etc. All that has been done by the Respondent is filing of an application on the misconceived notion that liberty has been granted by the Hon'ble High Court to file an application before the Tribunal which has been entertained to set a naught the orders dated 31.03.2023 and 21.04.2023 which is not only i....
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....ts and since much water has been flown after the order of forfeiture was passed, by way of initiation of litigation by the Respondent by filing the first application bearing CA No. 85 of 2022 which was rejected on 31.03.2023 and appeal against it which was dismissed on 21.04.2023 and the said order remained uncontested and unchallenged before the Hon'ble Apex court by way of an appeal under Section 62 of the Code which was the only correct procedure to have been followed, the argument raised by the Respondent is only for the sake of it otherwise it does not have any legs to stand. 41. The last argument of the Respondent that there was no loss caused to the stakeholders is not available to it in view of the decision of the Hon'ble Supreme Court in the case of Pratap Technocrats Pvt. Ltd. (Supra). 42. Thus, in view of the aforesaid facts and circumstances, we are of the view that there is merit in the appeal filed by the Appellant and the impugned order suffers from illegality, therefore, the appeal is hereby allowed and the impugned order is set aside though without any order as to costs. Pending IAs, if any, are hereby closed. ============= Document 1 E-AUCTION S....
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....on. The applicants may contact Ms. Shikha Chaudhary (Team Liquidator) - Email - [email protected], Ph. 011-45789408 (0) / +91- 9811527752 or Mr. Vinod Chauhan (Team E-Auction Agency) - [email protected], Ph. +91-9813887931 for any assistance. Vikram Bajaj IBBYIPA-002/IP-N00003/2016-2017/10003 Liquidator - Best Foods Ltd. (In Liquidation) Email- [email protected] Ph. - 011-45789408(0) / 9999989408(M) Office -308, Pearls Business Park, Netaji Subhash Place, Pitampura, Delhi -110034 Document 2 Vikram Hajaj [email protected]> Gmail Confirmation of Sale - Lot 5 - E-Auction Sale - Best Foods Ltd. (In Liquidation) Wed, Ded 16, 2021 at 11:09 AM ASJ FINSOLUTIONS [email protected] To: Vitam Baini [email protected]> Cc: [email protected], [email protected] Dear Sir. Please refer to E-auction Sale of assets of Best Foods Ltd.(In Liquidation) hold on 16-11-2021, comprised in Lot 5 as under wherein we are declared as the highest bidder:" "Linnd sneasuring 68K'(ZM situated at Village Nangal Khurd, Telisil Distr., Sonopat, Haryana " We heraby confirm that in respect of the total Bid Amount of Re. 25,56,00,000-00 (Rupees Tw....