2022 (6) TMI 107 - AT - Insolvency and Bankruptcy

Auction - extension of 30 days time for filing auction bid - non-speaking order - HELD THAT - On examination of the email of the Appellant there is no difficulty to infer that the Appellant was not at all interested to participate but his sole object was to delay the bid. Even though as per auction notice which was held on the date fixed i.e. 20.04.2021 total 16 bidders participated but much belatedly the Appellant started raising dispute and finally he filed IA Petition before the Adjudicating Authority assailing the bid. Of course, the order of the Adjudicating Authority is not elaborate but on perusal of the same it is reflected that despite indulgence given by the Adjudicating Authority for depositing the amount as stated by the Appellant, he never comply with the same and one way or the other he was trying to delay the proceeding and as such the learned Adjudicating Authority was left with no option but to reject the same - The sanction letter which was annexed with the additional affidavit of the Appellant filed before the Adjudicating Authority makes it clear that the Appellant s application for capital bridge funding was of Rs.300 lakhs whereas sanction of funding was shown as Rs.700 lakhs. Such stand taken by the appellant itself creates serious doubts on the conduct of the appellant. The appellant has initiated the present proceeding only and only with a view to defeat the auction sale - Appeal dismissed.

Summary

Issues Involved:
1. Non-speaking order by the Adjudicating Authority.
2. Decision on merit by the Adjudicating Authority.
3. Rejection of the application by the Liquidator on extraneous considerations.

Issue-wise Detailed Analysis:

1. Non-speaking order by the Adjudicating Authority:
The appellant argued that the impugned order is liable to be set aside on the ground that it is non-speaking. The appellant's counsel emphasized that the order does not reflect any reason for the rejection of his application, making it non-speaking and thus invalid. The tribunal, however, found that despite the order not being elaborate, it reflected that the Adjudicating Authority had given indulgence to the appellant for depositing the amount, which he failed to comply with, leading to the rejection of the application.

2. Decision on merit by the Adjudicating Authority:
The appellant contended that his application was not decided on its merit. He argued that he was ready to deposit a much higher amount than the highest bidder and that his request for a Detailed Process Memorandum was unjustly rejected. The tribunal noted that the appellant sent an email on 15.04.2021 requesting an extension of the bid submission date and the Detailed Process Memorandum. The Liquidator rejected this request, stating that the appellant was neither a Director of the Company nor was the email from the registered email of the Company. The tribunal found that the appellant's intention was to delay the auction rather than participate genuinely, as evident from his actions and the timeline of events.

3. Rejection of the application by the Liquidator on extraneous considerations:
The appellant argued that his application was initially rejected by the Official Liquidator on extraneous considerations. The tribunal examined the timeline and actions of the appellant, including his visit to the site on 07.04.2021, and his email sent at 2.03 PM on 15.04.2021 requesting a 30-day extension for bid submission. The tribunal found that the appellant was not prepared to file the bid and was attempting to delay the auction process. The Liquidator's actions were found to be in line with the IBC Code, and the auction process was completed with 16 bidders participating and the highest bid being significantly higher than the reserve price.

Conclusion:
The tribunal concluded that the appellant had adopted undue steps to abuse the process of the court and his intention was to defeat the object of the auction. Despite the auction taking place on 20.04.2021, the appellant continued to keep the dispute alive on various pretexts. The tribunal dismissed the appeal, stating that it was a fit case for rejection with imposing heavy costs, but refrained from doing so, taking a lenient view. The appeal was dismissed with no order as to costs.