TMI Blog2024 (4) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... , which was deposited and which has earned interest is in lieu of the assets, which have been ultimately sold to the Appellant and handed over to him. There is no merit in the submission of the Appellant that Liquidator should be directed to make payment of interest on the sale consideration, which was deposited by the Appellant due to delay in handing over of assets to the Appellant, which assets could not be handed over earlier due to restraint order of the Adjudicating Authority dated 04.04.2022, which could be vacated only on 01.06.2023. There are no merits in the appeal - appeal dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellant : Mr. Krishnendu Datta , Sr. Advocate along with Mr. Saumitra Chaturvedi , Mr. Himanshu Chaubey , Mr. Srijan Sinha , Mr. Siddharth Garg and Mr. Shubham Solanki , Advocates For the Respondent : Ms. Swati Dalmia and Mr. Palzer Moktan Advocates JUDGMENT ASHOK BHUSHAN , J. Interlocutory Application No. 3688 of 2023 This Application has been filed by the Appellant for condoning the delay of 13 days in filing of the Appeal. Sufficient cause being shown, the delay in filing of the Appeal is hereby c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted Bid Application Form along with EMD to the Liquidator to enable itself to submits its bid to purchase the property slotted at A-5 in E-auction Process Documents dated 11.04.2022. On 25.04.2022, the Appellant addressed an email to the Liquidator requesting the Liquidator to provide details with regard to any pending litigations in respect of the subject property. On 29.04.2022, the Liquidator informed the Appellant that it has been declared as the Successful Bidder for offering the highest amount of Rs.107.35 crores for purchasing the subject property. Letter of Intent ( LOI ) was issued by the Liquidator on 29.04.2022 to the Appellant. The LOI mentioned that it is subject to terms and conditions set out therein in Process E-auction Documents and such orders as may be passed by NCLT and NCLAT or any other competent Court, including order dated 04.04.2022 passed by NCLT in IA Nos. 89 and 98 of 2022. The LOI was unconditionally accepted by the Appellant without any demur or protest. On 01.06.2022, the Appellant deposited the entire sale consideration with the Liquidator. (v) On 07.06.2022, hearing in IA Nos.89 and 98 of 2022 was concluded before the Adjudicating Authority and orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um (from 10.06.2022 until the date of issuance of sale certificate being 02.06.2023) on the sale consideration amount of Rs.107.35 Crores deposited by the Appellant, as prayed vide Para V(B) of I.A. No.394 of 2022, in the interest of justice; (b) Pass such other or further order as this Hon ble Appellate Tribunal may deem fit in the proper circumstances of the case. 4. We have heard learned Senior Counsel for the Appellant as well as learned Counsel for the Liquidator. 5. The learned Senior Counsel for the Appellant, challenging the order submits that Adjudicating Authority committed error in not granting the relief as prayed in para V(B) to grant interest on the sale consideration amount deposited by the Appellant. It is submitted that under the Liquidation Regulation, 2016, since the amount was deposited by the Appellant and the sale was completed, it was obligation of the Liquidator to handover possession of the assets to the Appellant, which asset could not be handed over. It is submitted that after the Appellant having been declared as Successful Bidder, it was the duty of the Liquidator to file an Application seeking prior approval for issuance of Sale Certificate as was earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the Liquidator refuting the submissions of learned Counsel for the Appellant submits that the Liquidator was diligent in pursuing IA Nos.89 and 98 of 2022 and has filed twice the Applications for early hearing of IAs. Although, IA Nos.89 and 98 of 2022 were heard by the Adjudicating Authority and orders were reserved on the IAs, but due to reconstitution of the Bench, the IAs were again directed for fresh hearing. The order dated 04.04.2022 by which Adjudicating Authority permitted the Liquidator to go ahead with the e-auction, but directed the Liquidator to obtain prior approval before issuing Sale Certificate. The Liquidator being bound by the order, could not have issued Sale Certificate. The LOI was issued to the Appellant, which contained reference to the order dated 04.04.2022, which was condition mentioned in the LOI. The Liquidator also filed Appeal before the Appellate Tribunal, challenging the order of the NCLT, by which urgent hearing Application filed by the Liquidator was rejected by the Adjudicating Authority. This Tribunal on 13.10.2022 disposed of the Company Appeal (AT) (Insolvency) No.1235 of 2022 requesting the Adjudicating Authority to consider the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the counsel on record for the applicant. List the matter on 26th April, 2022. In the meantime, auction sale to proceed as planned. However, the same shall be subject to outcome of this IA. Further, the liquidator shall not proceed to issue sale certificate without prior approval of the Adjudicating Authority. 9. The Appellant was Successful Bidder of the property slotted at A-5, for which a LOI dated 29.04.2022 was issued by the Liquidator. LOI in paragraph-8 has clearly mentioned about the order dated 04.04.2022 passed by the Adjudicating Authority in IA Nos.89 and 98 of 2022. Paragraphs-8 of the LOI is as follows: 8. This Letter of Intent shall be read with the terms of the E Auction Process Information Document and is subject to the terms and conditions set out therein and such orders as may be passed by the Hon ble NCLT/NCLAT, any other Competent Court including the order dated 04.04.2022 passed by the Hon ble NCLT, Allahabad Bench in I.A. No.89 of 2022 and I.A. No.98 of 2022 in C.P.(IB) No.223/ALD/2018 [Standard Chartered bank vs. M/s JVL Agro Industries Ltd.]. This Letter of Intent shall be binding on you as the Successful Bidder. 10. From the sequence of events, as not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as made above. 12. The above clearly indicates that Liquidator was diligently pursuing the proceedings and has requested for hearing of the IA Nos. 89 and 98 of 2022. It is also relevant to notice that IA No.394 of 2022 was filed by the Appellant on 14.11.2022. In the IA, following prayers were made by the Appellant: (A) That this Hon ble Tribunal may be pleased to allow the present application, in the interest of justice and direct the respondent to issue Sale Certificate to the applicant in compliance with the terms and conditions stipulated in the Sale Notice E- Auction Process Information, both dated 11.04.2021 annexed at Annexure-B Annexure- C read with the provisions of the Insolvency and Bankruptcy Code, 2016 and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016; [B] That this Hon'ble Tribunal may be pleased to pass an order directing the respondent to deposit an amount towards interest at the rate 12% per annum on the sale consideration amount of Rs 107.35 Crores to the Applicant starting from 10.06.2022 uptil the date of issuance of sale certificate by the respondent for non-issuance of sale certificate within 10 days from the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in the E-Auction Process Information Document dated 11.04.2022 (Annexure-C) so as to adhere with terms and conditions of the sanction letters dated 27.05.2022 and 30.05.2022 (Annexure-M N); (H) That this Hon ble Tribunal may be pleased to grant any ancillary or consequential directions or such other and further reliefs as may be deemed fit and proper by this Hon ble Tribunal, in the interest of justice. 13. In IA No.394 of 2022, an order was passed on 14.11.2022 by the Adjudicating Authority, refusing the prayer of the Appellant for issuance of Sale Certificate. Order dated 14.11.2022 in IA No.394 of 2022 is as follows : IA No. 394 / 2022 IA No. 397 / 2022 Let the notice of the same be given to the other side. Ld. Counsel for the applicant in IA No.394/2022 IA No.397 of 2022, have prayed for the short interim relief for issuance of the sale certificate which has already been stayed v.o.d. 4th April, 2022. However, at this stage, the relief cannot be granted. 14. The Appellant also filed an Appeal before this Appellate Tribunal, being Company Appeal (AT) (Insolvency) No.1525 of 2022 challenging order dated 14.11.2022 passed in IA No.394 of 2022. However, this Appellate Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled under any law, statute, rules or regulations or tort, principles of restitution or unjust enrichment or otherwise to claim for any loss, damage, cost or expense which may arise from or be incurred or suffered on account of anything contained in this E- Auction Process Information Document or otherwise, including the accuracy, adequacy, authenticity, correctness, completeness or reliability of the information or opinions, if any, contained in this E-Auction Process Information Document for Sale of the Stand-alone Block(s) of assets of the Corporate Debtor and any assessment, assumption, statement or information contained therein or deemed to form part of this E-Auction Process Information Document, and the Liquidator or any of his respective advisors, consultants and representatives and the Company, do not have any responsibility or liability for any such information or opinions and therefore, any liability or responsibility is hereby expressly disclaimed . 17. The learned Counsel for the Appellant has referred to Schedule-1 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. He has relied on Clauses 12 and 13 of Schedule-1. Schedule-1, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate was prohibited by the Adjudicating Authority and the Sale Certificate could be issued only after order dated 01.06.2023 passed by the Adjudicating Authority, rejecting IA Nos.89 and 98 of 2022, no blame can be put on the Liquidator for not issuing Sale Certificate, immediately after the deposit of sale consideration by the Appellant. 20. The learned Counsel for the Appellant has placed reliance on the judgment of the Hon ble Supreme Court in South Eastern Coalfields Ltd. vs. State of M.P. Ors. (2003) 8 SCC 648, where the Hon ble Supreme Court has held that interest is also payable in equity in certain circumstances and the proposition of law is that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation by whatever name it may be called. In paragraphs 21 and 22, following have been held: 21. Interest is also payable in equity in certain circumstances. The rule in equity is that interest is payable even in the absence of any agreement or custom to that effect though subject, of course, to a contrary agreement (see Chitty on Contracts, 1999 Edn., Vol. II, Para 38-248 at p. 712). Interest in equity has been he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty that he proposes to purchase. He cannot after having purchased the property on such terms then claim diminution in the price on the ground of defect in title or description of the property. The case of the Official Liquidator selling the property of a company in liquidation under the orders of the Court is altogether different from the case of an individual selling immovable property belonging to himself. There is, therefore, no merit in the application made on behalf of Triputi that there should be a diminution in price or that it should not be made liable to pay interest on the sum of Rs 1 crore 98 lakhs. 22. In the above case, the Court rejected the prayer with regard to sale by Liquidator and that Successful Bidder should not be directed to pay interest on the sale consideration. There was delay in payment of sale consideration, hence the direction was issued for payment of interest. The present is a case where, there is no delay in payment of sale consideration by the Appellant, but assets could not be handed over due to restraint order of the Adjudicating Authority. When restraint order was vacated, immediately, Sale Certificate was issued and assets were handed over t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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