2023 (3) TMI 697 - AT - Insolvency & Bankruptcy

E-auction - seeking direction to declare the applicant as successful bidder and cancel the bid of Appellant which was accepted by the Liquidator - It is submitted that since the Respondent No.1 has given the equal bid of Rs.38,40,00,000/- within two minutes of the bid submitted by the Appellant, by virtue of the E-auction Process Information Document, the Respondent No.1 was to be declared as Successful Bidder and the Liquidator committed error in declaring the Appellant as Successful Bidder.

HELD THAT:- The document clearly indicate that if bid under option 1 and 2 are equal, then bidder under option 1 as going concern shall be declared as successful bidder. The system of bidding and various entries shows that bid of Appellant and Respondent No.1 were of equal amount, whereas the system of bidding as was applied by the bidding forum rejected the bid of Respondent No.1, which was required to be analysed by the Liquidator. It is on the record that the last bid given by the Appellant was of Rs.38,40,00,000/- and since there is no incremental increase by Respondent No.1, its bid of same amount was rejected by the system. The requirement in the Process Document that if the both the bids in option 1 and 2 are equal, bidder under option 1 for sale as going concern shall be successful bidder, there was no measure to apply said provision in the system. System proceeded on its own basis as per terms and conditions.

There is no dispute that one of the participant i.e. Respondent No.1 has submitted bids under option 1 i.e. sale of Corporate Debtor as going concern and bid by the Appellant was under option 2 and preference to bid under option 1 has to be given since sale of Corporate Debtor as going concern is audible objection in an insolvency proceeding for revival of the Corporate Debtor. The bidding was closed after receiving aforesaid bid and it was duty of the Liquidator to apply the relevant conditions to find out who should be declared as the successful bidder. The Liquidator instead of looking into the relevant conditions, acted mechanically and followed the auction platform in declaring the Appellant as the highest bidder.

The Liquidator is the best person, in facts of the present case, to appreciate the requirements and interpretation of the Information Document and E-auction Document issued by him. In the present case, the Liquidator has not given effect to the requirement in the Information Document that in event bid under option 1 and 2 are equal, the bidder under option 1 shall be declared as successful bidder.

The liquidation process has to be conducted as per the Liquidation Regulation and as per the Process Document issued by the Liquidator. When the process was completed, highest bidder was to be chosen as per the terms and conditions. Present is not a case where this Tribunal should allow the bidding process to again commence. The question before the Adjudicating Authority was as to whether in the facts and circumstances of the present case, on an application, Respondent No.1 was required to be declared as successful bidder, which decision has been taken by the Adjudicating Authority after considering the relevant Process Document. This Tribunal in the case of Y. SHIVRAM PRASAD AND ASSET RECONSTRUCTION COMPANY (INDIA) LTD. VERSUS S. DHANAPAL & ORS. AND SERVALAKSHMI PAPER LTD. & ORS [2019 (5) TMI 386 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] has held that it is clear that during the liquidation process, steps required to be taken for its revival and continuance of the Corporate Debtor by protecting the Corporate Debtor from its management and from a death by liquidation.

The Adjudicating Authority has also permitted to refund the amount of deposited by the Appellant with the accrued interest as accrued - no grounds have been made to interfere with the impugned order.

Appeal dismissed.