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TMI Blog2023 (9) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... within 30 days from the date of the order with an interest @ 4% from forfeiture date, failing which, he has been liable to pay the forfeiture amount of EMD with an interest of 7% till the actual payment is made. 2. In short, the Liquidation proceedings were initiated against the Corporate Debtor by the Adjudicating Authority vide order dated 17.10.2017 pursuant to which the Liquidator put up one cable manufacturing unit at Shyamnagar, West Bengal (Shyamnagar Property), one of the several assets of the Corporate Debtor, for sale by way of e-auction in terms of Regulation 32 r/w Schedule 1 of the IBBI (Liquidation Process) Regulations, 2016 (in short 'Regulations') 3. The Liquidator floated Expression of Interest (EOI) for sale vide invitation dated 08.07.2020. The relevant clauses 12.17, 12.18 and 12.19 of the EOI, set up by the Liquidator are reproduced as under : - "12.17. The H1 Bidder shall have to deposit 25% of the Sale Consideration, within 5 days of the Demand made by the Liquidator. The EMDtendered by the H1 Bidder against accepted Bid shall be adjusted towards this 25% Sale Consideration. However, where the EMD wassubmitted as bank guarantee, the same is not adjusted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the terms were agreed to, the request made by the Respondent was rejected by the Appellant for extension of time but was allowed to make the balance payment by 16.09.2020 vide its mail dated 14.09.2020. However, since no payment was made even till 16.09.2020, the Appellant sent a pre-forfeiture notice on 18.09.2020 and gave final opportunity to Respondent to pay the balance sale consideration by 21.09.2020 and upon the failure of the payment within stipulated time, the amount paid by the Respondent (i.e. the EMD and 25% of the sale consideration) was forfeited. 7. It is further alleged that since H2 did not show interest in purchasing the auctioned property, the Appellant issued a fresh invitation on 23.09.2020, keeping the reserve price at Rs. 20.63 Crores of the same property, which was sold in a fresh e-auction at the highest bid of Rs. 23.33 Crores (as compared to the bid price of Rs. 24.73 Crores in the previous auction where the Respondent failed to honour its bid). The full payment towards the sale consideration has been made by H1 in the fresh auction within timeline prescribed, therefore, the Appellant has executed the sale certificate in favour of H1 bidder and handed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve price, earnest money deposit as well as pre-bid qualifications, if any". The entire emphasis of the Appellant is on the point that once the Respondent being the highest bidder has accepted the terms and conditions laid down in the EOI (Clause 12.17 to 12.19 Supra) it cannot be allowed to urge that the period of 90 days should have been granted from the date of demand instead of the timeline fixed by both the parties mutually. 10. On the other hand, Counsel appearing on behalf of the Respondent has submitted that the circular dated 26.08.2019 was subject matter of the controversy in CA (AT) (Ins) No. 398 of 2021 in which this Court has made the following observations: - "12. Having heard Counsel for Appellant and Amicus Curiae and considering the material placed by them, it does appear to us that the laudable object with which Clause 12 was substituted is defeated by issuing such Circular dated 26.08.2019. When in an auction somebody has given a higher bid, if instead of 15 days, the person gets a breathing time of 90 days to make a payment, no other person gets affected. We have seen the Discussion Paper referred to by the Learned Amicus Curiae which was alongwith the Draft R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ines. The guidelines which are inconsistent with the subordinate legislation would not be enforceable. If provision is clear, external aid, that too inconsistent, cannot be applied. The provision has to be enforced by Tribunal as it is." 11. It is further submitted that the Regulation 33 of the Regulations deals with the mode of sale. He has referred to Regulation 33(1) which says that "the liquidator shall ordinarily sell the assets of the Corporate Debtor through an auction in the manner specified in Schedule 1". Then he drew our attention to Schendel 1 which deals with the mode of sale. Clause 12 of Schedule 1 which was substituted on 25.07.2019 says that "on the close of auction, the highest bidder shall be invited to provide balance sale consideration within nineteen days of the date of such demand: provided that payments made after thirty days shall attract interest at the rate of 12%: Provided further that the sale shall be cancelled if the payment is not received within 90 days." 12. He has argued that it is incumbent upon the Appellant (Liquidator) to have followed Clause 12 of Schedule 1 and could not have laid down its own terms and conditions because the invitation ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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