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2024 (6) TMI 714 - HC - Insolvency and BankruptcyIssues Involved: 1. Setting aside of orders by Recovery Officer, DRT-III, Chandigarh. 2. Seeking possession of property under SARFAESI Act. 3. Refund of bid amount deposited by the successful bidder. Summary: Issue 1: Setting aside of orders by Recovery Officer, DRT-III, Chandigarh - CWP-22367-2021 was filed by Central Bank of India to set aside orders dated 25.10.2021 and 28.10.2021 passed by Recovery Officer, DRT-III, Chandigarh. The petitioner sought to proceed with the auction of properties as per the proclamation of sale notice issued on 07.09.2021. - The Recovery Officer had directed the auction proceedings to be put on hold and ordered fresh valuation from a new empanelled valuer. Subsequently, the proclamation of sale and related orders were cancelled and withdrawn. Issue 2: Seeking possession of property under SARFAESI Act - CWP-11117-2022 was filed by M/s Kaur Sain Spinners Limited seeking to set aside the notice dated 11.05.2022 issued by Tehsildar-cum-Executive Magistrate, Samrala, for possession of property pursuant to the order dated 07.12.2021 passed by Additional District Magistrate, Khanna u/s 14 of SARFAESI Act. The petitioner also sought to restrain the respondent Bank from dispossessing them of the property and to stay all proceedings under SARFAESI Act. Issue 3: Refund of bid amount deposited by the successful bidder - During the pendency of the writ petitions, an application u/s 7 of IBC 2016 was filed by Punjab National Bank and admitted by NCLT, Chandigarh, rendering both writ petitions infructuous. - Respondent No. 9, the successful bidder in the auction held on 05.11.2021, sought a refund of the entire bid amount along with poundage fee and interest of 12%. The auction/sale was set aside by the Recovery Officer on 24.04.2023. - The Recovery Officer concluded that the proclamation of sale dated 07.09.2019 was illegal and set aside the auction held on 05.11.2021. The order directed the refund of the bid amount deposited by the successful bidder. Court's Decision: - The court found no merit in the objection raised by the IRP regarding the release of the bid amount. The factual aspect of the auction and subsequent setting aside of the sale was a matter of record. - The court held that the corporate debtor had no legal right or beneficial interest in the bid amount deposited by the auction purchaser, as the sale had been set aside and the refund ordered. - The court directed the Recovery Officer to release the amount deposited by respondent No. 9 expeditiously in terms of the order dated 24.04.2023. - Both writ petitions were disposed of as infructuous, with parties at liberty to avail remedies available to them in accordance with law before appropriate forums.
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