TMI Blog2023 (7) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... Liquidator. Apparently no time frame was given for any inspection of the premise by the prospective bidder, which is not very rightful thing to do on behalf of the Liquidator - It is also observed that the corrigendum for rectification of error in the notice for sale of assets was given in newspapers and IBBI website which was after the E-auction was completed, rendering these to be futile and at best paper exercise on post facto basis. There are no error in the Impugned Order dated 02.03.2023, wherein the E-auction was set aside and it was held that the Liquidator must bear all expenses incurred for the auction - appeal dismissed. - Company Appeal (AT) (Insolvency) No. 401 of 2023 Company Appeal (AT) (Insolvency) No. 695 of 2023 - - - Dated:- 4-7-2023 - [ Justice Ashok Bhushan ] Chairperson And [ Naresh Salecha ] Member ( Technical ) For the Appellant : Mr. Asav Rajan , Advocate For the Respondents : Mr. Malak Bhatt Ms. Tanishka Khatana , Advocates For the Appellant : Mr. S. S. Naganand , Sr. Advocate with Ms. Komal Munkhka Mr. Saurabh Agrawal , Advocates For the Respondents : Mr. Malak Bhatt Ms. Tanishka Khatana , Advocates JUDGMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the sale of the premises, the first auction was conducted on 04.12.2019 and second auction on 01.03.2021 both the auctions was unsuccessful as no bid was received. Learned Counsel for the Appellant stated that he prepared 3rd Notice dated 02.04.2022 for Sale of Assets and the same was uploaded on the official website of the Insolvency and Bankruptcy Board of India ( IBBI ) the E Auction Platform and also published in two newspapers, namely- Financial Express and Navakal on 02.04.2022. 7. Learned Counsel for the Appellant/Liquidator stated that due to a typographical error, in the last portion of the 3rd Notice for Sale of Assets, in point 5, the last date for submission of the Expression of Interest (in short EoI ) and the Earnest Money Deposit ( EMD ) was wrongfully mentioned as 15.04.2022 and 16.04.2022 respectively. Upon realizing the error, the Appellant immediately rectified the same and the 3rd Notice for Sale of Assets free of error was re-uploaded on the IBBI Website and E-Auction Platform and published in the Navakal on 09.04.2022. 8. Learned Counsel for the Appellant stated that according to the rectified Notice for Sale of Assets, E-Auction was to be condu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derailing the Auction process. 13. Learned Counsel for the Appellant/Liquidator submitted that his role was for the maximisation value of the assets of the Corporate Debtor and since he already received a bid above the liquidation value, he accepted the bid of Marine Electrical (India) Pvt. Ltd./ Successful Bidder. 14. Learned Counsel for the Appellant/Liquidator assailed the Order of the Adjudicating Authority who failed to appreciate that the Appellant has followed due procedure in conduction of the E Auction and reduction of the time by subsequent rectification is not reason enough for the auction to be set aside. In support of the same, the Appellant relied on the judgment of the National Company Law Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 732 of 2019 titled Manjit Commercial LLP v. SPM Auto Pvt. Ltd. Ors. dated 05.09.2019 by holding as under: 8. In so far as the allegations of the Appellant with regard to reducing the time period is concerned, the Liquidator followed the procedures as contemplated in clause 3 of Schedule I of the Regulations, which provides that the Liquidator shall prepare the terms and conditions of sale, Regulation 2 of Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the Successful Bidder stated that his action was in accordance with the notice period and the Adjudicating Authority has wrongly passed the Impugned Order in setting aside the E-auction dated 08.04.2022 without granting an opportunity to the Successful Bidder. 20. Learned Counsel for the Successful Bidder also assailed the conduct of M/s Sunrise Industries/ Respondent No. 1 who was ineligible to participant in view of delaying submitting the EoI beyond the prescribed timeline of 04.09.2022 and therefore has no locus. 21. Concluding his remarks, Learned Counsel for the Successful Bidder submitted that the Impugned Order need to be set aside and process of E-auction dated 08.04.2022 and Sale Certificate dated 11.05.2022 should be declared as valid. 22. Per-contra, the Respondent No. 1 (Sunrise Industries contested all the averments of the Appellant/ Liquidator as well as Successful Bidder i.e., Marine Electrical (India) Pvt. Ltd. Learned Counsel for the Respondent No. 1 stated that the Sale Notice was issued by the Liquidator on 02.04.2022 (Saturday) and Sale Notice incorrectly provided the date of 15.04.2022 and 16.04.2022 for submission of KYC documents and payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MD respectively. The notice also erroneously stated last date and time for submission of EoI by interested bidder as 15.04.2022 (5pm) with last date and time for payment of EMD as 16.04.2022 (5pm). These clear conflicting dates are sufficient to cause confusion and therefore can not be treated as mere typographical error as claimed by the Liquidator. In this connection, we also take note of following table used in the Impugned Order to understand gravity of errors in the dates. S. No. Particulars Date Day Remarks 1. Date of publishing E- Auction Notice 02.04.2022 Saturday Issued on Bank Holiday 2. Date of Submitting EOI/ Last Date of submitting KYC Documents 04.04.2022 Monday Only one working day of Monday was given, as the notice was issued on bank holiday which was succeeded by Sunday. No time was allowed for due diligence nor a reasonable opportunity to submit 3. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rule 8 of the SARFAESI Security Interest (Enforcement) Rules, 2002 which are as under:- Rule 8 Sake of immovable secured assets (6) the authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5) *** (Emphasis Supplied) This also indicates that sufficient time say 30 days ought to have been give. Thus, we find the Liquidator acted in hurry in concluding the E-auction. 31. We also observe that apparently no time frame was given for any inspection of the premise by the prospective bidder, which is not very rightful thing to do on behalf of the Liquidator. 32. It is also observed that the corrigendum for rectification of error in the notice for sale of assets was given in newspapers and IBBI website which was after the E-auction was completed, rendering these to be futile and at best paper exercise on post facto basis. 33. We also take note that the Adjudicating Authority has observed the following in Para 10 of the impugned order- 10. The liquidator has completed the e-auction in utmost haste within one week for the reasons best known to him. The hasty manner and the procedur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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