TaxTMI 
TaxTMI 
2026 (3) TMI 1155
X X X X Extracts X X X X
X X X X Extracts X X X X
....ocess/NRRA assignment process conducted under Regulation 37A of the IBBI (Liquidation Process) Regulations, 2016, and to set aside the selective and non-transparent acceptance of the offer of Respondent No.3. The Facts: 2. Material facts relevant for the current purpose are: a) Hema Automotive Private Limited ("Corporate Debtor") was admitted into CIRP on 08.07.2022. The sole substantial asset of the Corporate Debtor comprised a leasehold industrial plot admeasuring approximately 10,000 sq. mtrs. situated at RIICO Industrial Area, Neemrana, Rajasthan. b) On 29.11.2022, during CIRP, the lease granted by RIICO was cancelled. The Resolution Professional challenged the cancellation before the Adjudicating Authority and it passed an order directing status quo on the matter. Subsequently, upon failure of resolution, liquidation proceedings were initiated on 11.04.2023 and Respondent No.1 was appointed as Liquidator. c) The Liquidator attempted sale of the asset through e-auction under Regulations 32 and 33 of the Liquidation Regulations at a reserve price of 17.93 Crores. The auction failed. Prior thereto, before the initiation of CIRP, the second respond....
X X X X Extracts X X X X
X X X X Extracts X X X X
....quidation estate and to ensure maximisation of value of the corporate debtor's assets. Reliance was placed on the dictum of the Hon'ble Supreme Court in M/s R.K. Industries (Unit-II) LLP v. M/s H.R. Commercials Pvt. Ltd. [Civil Appeal No. 7722 of 2021, decided on 26.08.2022]. b) the Process Information Memorandum issued by the Liquidator expressly contemplated negotiations, inter se bidding, and other mechanisms aimed at price discovery and value maximisation. Once negotiations were not only contemplated but were in fact undertaken with Respondent No. 3 after opening of bids, the process ceased to be a rigid sealed-bid process governed strictly by cut-off dates. The appellant submits that selective negotiation with only one bidder while excluding other qualified bidders, is per se arbitrary and violative of the principles of fairness and equality. Reliance was placed on a judgement of the Principal Bench of the NCLT in Bank of Baroda v. M/s Rathi Super Steel Limited [I.A. (I.B.C.) No. 3871(PB)/2021 and I.A. (I.B.C.) No. 4489(PB)/2021 in C.P. (IB) No. 1446(PB)/2018]. c) It is an admitted factual position that the 10th SCC meeting commenced at 11:30 a.m. on 04.12.20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed the paramount objective of value maximisation, and that the Adjudicating Authority has erred in upholding an auction process that deserves to be rejected in law. 4. Per contra, the learned counsel for the liquidator submitted: a) The appeal is barred by limitation. The impugned order was passed on 20.09.2024, whereas the appeal came to be filed on 21.10.2024, without any application seeking condonation of delay. b) Appellant has suppressed the material fact of it accepting the refund of EMD after the decision of the SCC. It is submitted that the Appellant, having participated in the NRRA process with full knowledge of its terms and timelines, and having failed to emerge as the highest bidder, cannot now seek to re-open a completed process by making belated offers. c) On his appointment, the liquidator attempted sale of the leasehold rights through e-auction in terms of Regulations 32 and 33 with a reserve price of Rs. 17.93 crores. The auction failed as no bids were received. It is further highlighted that even prior to CIRP, the sole secured financial creditor, Respondent No.2, had attempted to auction the same asset at reserve prices of Rs. 14.0 c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant's authorised representative who was present in the SCC meeting, raised no objection when the SCC resolved to consider Respondent No.3's bid, nor did he insist on placing the revised offer before the SCC. Fourthly, the appellant sought refund of its EMD on 07.12.2023 and had since received it. Thus, the appellant was aware that the process had concluded and had also accepted its outcome. In these circumstances, entertaining any belated offers would make NRRA assignment processes interminable, as unsuccessful bidders could indefinitely seek to improve their offers post-decision, thereby defeating finality and undermining the Liquidator's duty to adhere to timelines under the Code. g) the appellant approached the Adjudicating Authority with I.A No. 511 of 2024 only on 25.01.2024, nearly 52 days after SCC approval and long after sale confirmation, which clearly evidenced acquiescence and waiver. h) Pursuant to the sale certificate on 29.12.2023 to the 3rd respondent, substantial right has vested in it. And the 3rd respondent has since restored the leasehold rights with RIICO, cleared its statutory dues, obtained utilities, and has also commenced its operations. S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n grounds of patent illegality or fraud, but on grounds of unfairness as the SCC -liquidator combination overlooked the revised offer of the appellant, not made before the closed-bids were opened but towards the fag end of the meeting of the SCC on grounds of unfairness in denying it an opportunity of negotiation after it had made a revised offer. The statement of law having been strongly declared by the Hon'ble Supreme Court in the authorities which both sides rely on, the principles that flow from them are still required to be applied to the facts before us. It is on the factual context of this case, we are not able to appreciate the contentions of the appellant, and our reasons are: a) Fairness is a constant that works differently in different factual context. And it needs to be understood in the context. The appellant who worries about denial of fairness to it has overlooked fairness to which the second respondent is entitled to. It is desperate to realise its dues. It tried its best to sell the property - a lease hold right over a piece of immovable property twice earlier but without success. The liquidator, the first respondent tried his best through the known method....