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2023 (1) TMI 810 - AT - Insolvency and BankruptcySeeking to withdraw from e-auction process - refund of EMD and first installment deposited - whether even after attachment of the assets of the corporate debtor under PMLA Act on 02.12.2021, the auction purchaser was required to deposit the entire sale amount? - HELD THAT:- Before the Order of attachment was passed on 02.12.2021, no default can be said to have committed by Auction Purchaser in depositing the amount since first installment was deposited within time and the successful purchaser had 90 days time to deposit the balance amount and before expiry of 90 days the assets of the corporate debtor were attached. In view of the attachment of the assets of the corporate debtor on 02.12.2021, Liquidator can neither complete the sale, can issue sale certificate nor can hand over the assets of the corporate Debtor to the Successful Auction Purchaser and due to aforesaid event the Application was filed by the Successful Auction Purchaser to withdraw from auction and for refund of the EMD. The Successful Auction Purchaser has genuine case for not proceeding with the deposit of the balance bid amount due to attachment of the assets of the corporate debtor on 02.12.2021 as noted above. The 90 days period had not even come to an end on 02.12.2021 so as to impute any violation of the term and conditions by the Successful Auction Purchaser. The Adjudicating Authority after considering the submissions of parties has taken the views that as on today the liquidator is not in a position to hand over the custody of the units of the corporate debtor for which e-auction was held and the Division Bench of the High Court on 24.12.2021 has directed parties to maintain status quo. The Adjudicating Authority has rightly passed an order permitting the Successful Bidder to withdraw from the auction and directed to refund of the amount of the EMD Rs. 5 Crores and First Installment of Rs. 30 Crores. Even in a case where Successful Auction Bid as going concern is not approved, Successful Auction Bidder is not entitled for any Interest on the EMD and 1st Installment. We are of the view that the Successful Auction Bidder is not entitled for interest on the amount of EMD and First Installment and the Adjudicating Authority without adverting to clause 15.4 has issued direction for refund of the EMD and 1st Installment along with interest. The Adjudicating Authority has rightly permitted the Successful Auction Purchaser to withdraw from e-auction and directed for refund of the EMD of Rs. 5 Crores and 1st Installment of Rs. 30 Crores - the direction to refund the amount of Rs. 5 Crores and 30 Crores along with interest is unsustainable - Appeal allowed in part.
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