TaxTMI 
TaxTMI 
2026 (9) TMI 1507
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....he Sale Certificate dated 26.03.2026 issued in favour of Respondent No.2, MCM Pacific Pte. Limited., in respect of Phase-III assets of Lanco Kondapalli Power Limited. The said application was dismissed by Ld. NCLT by virtue of the impugned order dated 20.08.2026, with a cost of Rs. 10 lakhs. BRIEF FACTS OF THE CASE: 2. On 23.04.2019, Lanco Kondapalli Power Limited (hereinafter referred to as the 'corporate debtor') was admitted into CIRP. As CIRP ended in failure, the corporate debtor was admitted into liquidation on 16.04.2021 and Mr. Pankaj Dhanuka was appointed as the Liquidator. The Liquidator issued a public announcement inviting claims from the stakeholders of the corporate debtor on 25.04.2021, in accordance with Regulation 12 of IBBI (Liquidation Process) Regulations, 2016. Thereafter, he conducted five rounds of e-auction between 11.01.2022 to 16.12.2022 for the sale of the corporate debtor as a going concern or for sale of assets of the corporate debtor on a piecemeal basis. Out of these five rounds of e-auction, the second round was conducted on 16.06.2022, in which Respondent No.2 was declared as the successful bidder for Phase-III assets and the Letter of Intent ....
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....3.2026 is at material variance with the process document dated 08.04.2022 and the order dated 09.03.2026 passed in IA No.422/2026, that the said Sale Certificate permits a six-fold extension of the dismantling period from 30 days to 180 days, that facilitation for export is being provided by the Liquidator which was not envisaged under the process document, that a post-sale fee arrangement has been made which compromises the Liquidator's neutrality and that a continuing post-sale role for the Liquidator has been created in violation of the doctrine of functus officio. He has stated that the process document is the foundational and binding charter of a sale process under IBC and the same cannot be violated as per the principles laid down in the judgment of the Principal Bench of this Tribunal dated 06.11.2025, in the matters of Orissa Alloy Steel Pvt. Ltd. v. S M Steels and Power Ltd., CA (AT) (Ins) No. 255-257 & 214-216 of 2025. He has further contended that the Sale Certificate dated 26.03.2026 has been issued 4 years after the e-auction and it incorporates terms that did not exist at the time of the e-auction which is a material irregularity. He has stated that the sale considera....
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.... a settled principle that a person who has not participated in the auction cannot merely by expressing keen interest after issuance of the Sale Certificate, seek to reopen entire auction and the LOI unless a case of fraud, collusion or material irregularity of a serious nature is made out. In the present case, the applicant had not demonstrated sufficient interest in the auction process that would entitle it to seek setting aside of the concluded e-auction, LOI and the Sale Certificate. Therefore, it being a non-participant in the e-auction process has not established such locus that would entitle it to seek setting aside of the concluded e-auction, LOI and Sale Certificate. Ld. NCLT has also held that challenge to e-auction dated 16.06.2022 and LOI dated 21.06.2022 is barred by limitation because the auction sale has attained finality and has not been challenged till the date of filing of the said application. 6. Regarding the allegation that the Sale Certificate included certain stipulations such as extended dismantling period, export facilitation and reimbursement of professional fee which were not there in the process document, Ld. NCLT has held that in clause 11(ii) of the ....
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....the Appellant and other prospective bidders would have participated in the auction, had the extended dismantling period, export facilitation and cost reimbursement mechanism been notified earlier remains hypothetical, that the Appellant has placed no material to show that he was interested to participate in the 2022 auction, and therefore a subsequent expression of interest after issuance of the Sale Certificate cannot create a right to seek annulment of a concluded auction. 11. Based on such observations, Ld. NCLT has concluded that the Appellant has not made any case for setting aside of the e-auction, the LOI or the Sale Certificate and that the 6-months dismantling / removal period cannot be treated as a fundamental deviation from the bid document and the auction terms and conditions and that since the facilitation and reimbursement stipulations in the Sale Certificate shall operate only subject to the Code and the Liquidation Regulations, the process document and applicable law. Proceeding further, Ld. NCLT has rejected the prayer for setting aside the e-auction. Further, holding that the challenge by way of filing the application is belated and speculative and that it has ....