2026 (8) TMI 1078

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....challenging the impugned order of the learned Adjudicating Authority directing the appellant to deposit the bank guarantee amount of Rs.. 2.0 crores to the liquidation estate of the corporate debtor, which, according to the appellant, it is not liable to pay as it had withdrawn from the race. 2. The material facts relevant for the current purpose are: a) The corporate debtor was ordered to be liquidated, and during the liquidation process, schemes were invited for the sale of the corporate debtor as a going concern in terms of Regulation 2B of the IBBI (Liquidation Process) Regulation. In response to the same, the appellant herein and M/s Seshasayee Paper and Boards Limited submitted their respective schemes. Both these schemes ....

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....Rs.. 2.0 crores. Upon the appellant withdrawing his appeal in C.A.451 of 2020, the liquidator moved the Adjudicating Authority with I.A. 846 of 2020 and I.A.844 of 2020 respectively against the appellant and Seshasayee Papers, for realising the said EMD amount. These applications came to be listed together. According to the appellant, it could not appear in I.A.846 of 2020 as the matter came to be listed during covid days whereas Seshasayee Papers contested the application that was filed against it through its counsel. Ultimately, on 12.05.2023, I.A 846 of 2020 came to be allowed, and the appellant was directed to pay a sum of Rs.. 2.0 crores to the liquidation estate of the corporate debtor. This order is now under challenge. 4. Th....

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....rate debtor was eventually sold as a going concern to M/s. Seshasayee Paper & Boards Ltd. 6. We gave careful consideration to the arguments advanced by the rival side and find the contention of the appellant to be reasonable and legally sustainable. The EMD in question is for submitting the scheme. The scheme of the appellant's choice indeed was submitted, but it was not accepted. Once the scheme was not accepted, it was for the appellant to decide whether to participate in the process or not. A scheme proponent only undertakes to submit a scheme of his/its design and not any scheme to the satisfaction of the CoC or the Adjudicating Authority. In that situation, once the initial scheme was not accepted, it then becomes a choice of the sc....