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TMI Blog2022 (11) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... hed and bids were called, ED had not attached any assets then e-auction was held on 09.04.2021 whereas provisional attachment came to be passed thereafter on 02.12.2021. So, this situation is also not attributable to the applicant who is the successful bidder herein. We are dealing with this application under section 60(5)(C) of the IBC, 2016 because it is a question of fact and the law relating to the process of liquidation of the corporate debtor. The stark facts on record are that the liquidator is not in a position to give the custody of assets of the corporate debtor to the applicant or give possession of the corporate debtor as a going concern to the applicant in spite of him being declared as a successful bidder and the applicant being deposited a sum of Rs. 30 crores with the liquidator. The Liquidator cannot withhold the amount for an indefinite period till proceeding under PMLA Act, 2002. The applicant is permitted to withdraw from E-auction process held on 09/04/2021 - the liquidator is directed to pay the applicant a sum of Rs. 30,00,00,000/- together with interest accrued thereon within two weeks from today - application allowed. - IA 240 of 2022 in CP(IB) 37 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition vide its order dated 17.03.2021 and permitted the liquidator to proceed with the sale of the corporate debtor in accordance with the provisions of the IBC, 2016. VII. On 19.03.2021, the Stakeholders Consultation Committee ( SCC ) suggested the liquidator to sell the corporate debtor as a going concern, and if such sale is not possible then to sell as a slump sale or on a piecemeal basis. VIII. On 09.04.2021, the e-auction was held for selling the corporate debtor as a going concern. The applicant participated as one of the bidders. On 10.04.2021, the applicant was declared to be a successful bidder. IX. On 16.04.2021, the liquidator issued in favour of the applicant a Letter of Intent. X. On 23.04.2021, the applicant deposited with the liquidator amount of Rs. 30 crores as the first installment of the sale. XI. On 08.09.2021, this Adjudicating Authority approved the sale of the corporate debtor as a going concern. XII. On 05.10.2021, the applicant filed an application before this Adjudicating Authority for modification of the order confirming the sale, and it was allowed. XIII. On 08.10.2021, the applicant informed the liquidator that it will deposit a ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intain the status quo. The appeal before the Hon ble Division Bench is still pending. 9. On this background, the applicant has approached us with request to allow him to withdraw from the e-auction process and direct the liquidator to refund the EMD because the liquidator is not in a position to effect the sale and hand over possession of the assets of the corporate debtor in pursuant to the auction sale. It is also submitted that though the applicant has purchased the corporate debtor as a going concern, but, in fact, as on today the status of the corporate debtor has been changed from going concern as most of the plants of the corporate debtor are shut down. 10. We called upon the liquidator to file the say to this application. Accordingly, the liquidator filed an affidavit in reply and opposed both prayers. 11. The liquidator contended that the applicant has purchased the corporate debtor in e-auction as is where is basis. The applicant was well aware that proceedings under PMLA Act, 2002 were going on when the applicant took part in the bidding process. According to the liquidator, the applicant did not deposit the balance amount within the time framed and delayed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchaser would not get affected, he took part in the e-auction process. He deposited with the liquidator a sum of Rs. 30 crores. Meantime, the ED passed provisional attachment order on the assets of the corporate debtor. The liquidator filed a writ petition against the order of attachment. That writ petition was allowed. But the order of the Hon ble Single Judge of Delhi High Court removing the attachment is a questioned in appeal before the Hon'ble Division Bench. The Hon'ble Division Bench passed the order to maintain the status quo. It is the say of the learned senior counsel that the applicant has purchased the corporate debtor as a going concern but during the last one year, the corporate debtor s units and plants are closed down. Its status is now changed to a closed unit and not a unit as a going concern. The legal battle between the liquidator and ED may go on for a couple of years. In such a situation, the applicant is now not interested to proceed with the e-auction process. He may be permitted to withdraw from the e-auction and the liquidator may be directed to refund the EMD. 14. Learned senior counsel further submitted that it is not the fault of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in between the applicant and the liquidator and ED has no say therein. Still, we permitted learned counsel to file written submissions but they are not filed. 18. At the outset, we note the fact that as on today, the liquidator is not in a position to hand over the custody of the units of the corporate debtor for which the e-auction was held and the applicant has been declared as a successful bidder. The assets are under the attachment of the ED. The Hon ble High Court vide order dated 24.12.2021 had directed parties to maintain the status quo relating to the assets till the second appeal is being disposed of. The applicant has already deposited a sum of Rs. 30 crores with the liquidator. 19. In the case of Popatrao Vyankatrao Patil v. State of Maharashtra (supra) the Hon ble Supreme Court dealt with similar controversy. In that case, the successful highest bidder had approached the Court with the request to refund the consideration on the ground that the contract stood frustrated. It would be useful to reproduce the facts and decisions of the Hon ble Apex Court. It is as follows: . 12. It is undisputed, that the appellant was the highest bidder for the sand block in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which the applicant approached us for withdrawal of e-auction and claiming refund of EMD are attributable to the applicant itself ? 20. The facts are admitted. The applicant had offered to purchase the corporate debtor as a going concern as per the sale notice dated 08.04.2021. In the sale notice, it has been mentioned that Option/Block A (Corporate Debtor as a going Concern)- All assets of the Corporate Debtor ass on a going concern basis as per Regulation 32A of IBBI (Liquidation Process) Regulations, 2016. Option/Block B (Slump Sale Basis)- 4 operational plants located at Kanchipuram-TN, Viskahakapatnam-AP, Varsana-GJ, Jaipur-RJ, and select operational financial assets pertaining to the 4 plants. So, the applicant s bid was for four operational plants of the corporate debtor. As on today, those plants which were in operation are closed down. The situation is not at all attributable to the applicant because the assets/plants are still in possession of the liquidator. 21. Apart from the above, the liquidator was aware that proceeding under the PMLA Act, 2002 was initiated and the assets of the corporate debtor were likely to be attached, still, he held the e-auction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is application is filed on 14.03.2022. 24. It was a submission of learned senior counsel for the liquidator that this Adjudicating Authority vide order dated 08.09.2021 confirmed the sale. If this Adjudicating Authority now allows the applicant to withdraw from the e-auction process then it would be amounting to recall or review earlier order by which the sale was confirmed. Such jurisdiction is not with this Adjudicating Authority. To support his submission, learned senior counsel relied on the order of Hon ble NCLAT in the case of Agarwal Coal Corporation Pvt. Ltd. vs. Sun Paper Mill Ltd., in IA No. 265/2019 and Company Appeal (AT) (Ins) No. 412/2019. 25. We have gone through that order. In that order, the applicant had filed the application before the Hon ble NCLAT to recall its order dated 16.10.2019 invoking provisions under Rule 11 of the NCLAT Rules, 2016 on the ground that the earlier order was sought by fraud. That application was rejected by Hon ble NCLAT holding that power to recall its own order is not with the Appellate Forum. The facts in this proceeding are altogether different. In this case, the applicant filed the application under section 60(5)(C) of the IBC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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