2020 (9) TMI 744 - Tri - Insolvency and Bankruptcy

Extension of time granted to the Applicant to make deposit - restraint on Liquidator of the Respondent Company from alienating the property and/or creating any interest of whatsoever nature - HELD THAT - The liquidator was present during the virtual hearing and did not raise any objection for the request made by the Applicant. This Bench considering the extraordinary situation created by the Covid-19 Pandemic is inclined to grant time for the Applicant to make the payment. This Application was filed on 26/06/2020 - Even though the time sought by the Applicant had already elapsed, considering the overall situation, the Applicant is allowed to make the balance payment along with interest at the rate of 12% per annum within 30 days from the date of this order. Application allowed.

Summary

Issues: Application for extension of time to deposit balance amount for purchased property from Liquidator.

1. Background and Relief Sought:
The Application was filed by the purchaser of immovable property seeking an extension to deposit the balance amount of ?32,41,00,000 plus interest and reimbursement of security expenses. The property was acquired through e-auction after the Corporate Insolvency Resolution Process and liquidation order against the Corporate Debtor.

2. Auction Process and Payment Made:
The Respondent conducted an e-auction where the Applicant emerged as the highest bidder for ?46.01 Crores, paying an EMD of ?4.60 Crores. The Respondent accepted the bid with conditions requiring 25% payment by a specific date and the balance with interest by another date.

3. Impact of Covid-19 on Payment:
Due to the Covid-19 pandemic, the Applicant faced challenges in arranging the balance payment. The Ministry of Health & Family Welfare issued an Office Memorandum cautioning against mass gatherings, affecting banking activities. The Applicant's staff was under lockdown, hindering office work and financial transactions.

4. Request for Extension and Loan Approval:
The Applicant requested an extension of 30 days for payment due to Covid-19 disruptions. Negotiations with L&T Finance Ltd. for a loan were delayed, impacting the disbursement process. Despite making additional payments, the balance due was ?32.41 Crores plus interest and security charges.

5. Legal Precedent and Decision:
The Applicant cited a previous NCLT Ahmedabad Bench order granting time for payments due to Covid-19. The liquidator did not object to the extension request during the virtual hearing. Considering the exceptional circumstances caused by the pandemic, the Tribunal granted the Applicant an additional 30 days to make the balance payment with 12% annual interest.

In conclusion, the Tribunal acknowledged the challenges faced by the Applicant due to the Covid-19 situation and decided to provide the requested extension for payment, emphasizing the need for flexibility and understanding during these extraordinary times.