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TMI Blog2023 (3) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the last bid given by the Appellant was of Rs.38,40,00,000/- and since there is no incremental increase by Respondent No.1, its bid of same amount was rejected by the system. The requirement in the Process Document that if the both the bids in option 1 and 2 are equal, bidder under option 1 for sale as going concern shall be successful bidder, there was no measure to apply said provision in the system. System proceeded on its own basis as per terms and conditions. There is no dispute that one of the participant i.e. Respondent No.1 has submitted bids under option 1 i.e. sale of Corporate Debtor as going concern and bid by the Appellant was under option 2 and preference to bid under option 1 has to be given since sale of Corporate Debtor as going concern is audible objection in an insolvency proceeding for revival of the Corporate Debtor. The bidding was closed after receiving aforesaid bid and it was duty of the Liquidator to apply the relevant conditions to find out who should be declared as the successful bidder. The Liquidator instead of looking into the relevant conditions, acted mechanically and followed the auction platform in declaring the Appellant as the highest bid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1 allowing I.A No. 238/2022 filed by the Respondent No.1 seeking direction to declare the applicant as successful bidder and cancel the bid of Appellant which was accepted by the Liquidator. The Adjudicating Authority allowed I.A. No. 238/2022 and directed that amount deposited by the Appellant be refunded with interest as accrued within two weeks. Aggrieved by the order dated 20.06.2022, this appeal has been filed. Brief facts of the case necessary to be noticed for deciding the Appeal are: i. On an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short 'I B Code') by the Bank of India. Insolvency resolution process commenced against the Corporate Debtor - Kaneria Granito Limited by order dated 26.04.2019. ii. Liquidation proceedings were initiated by subsequent order dated 15.07.2020. The Liquidator issued e-auction sale notice on 09.02.2022 for sale of assets of Corporate Debtor in liquidation under four options. E-auction for Option 1 and 2 was to be conducted on 28.02.2022, simultaneously. Three bidders including Respondent No.1 and Appellant participated in the e-auction process. E-auction Process Information Document clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard Shri Krishnendu Datta, learned senior counsel for the Appellant, Shri Abhijeet Sinha, learned counsel appearing for Respondent No.1 and Shri Ravi Raghunath, learned counsel appeared for Respondent No.2 - Liquidator. 3. Shri Krishnendu Datta, learned counsel appearing for the Appellant submits that according to the E-auction Process Information Document, any qualified bidder can improve its offer in multiple of amount mentioned as Bid Incremental Value. Incremental value was minimum Rs.5,00,000/-. It is submitted that Appellant, Respondent No.1 as well as one another bidder namely 'H. R. Commercials Private Limited' participated in the e-auction. The auction was conducted by an entity namely 'Auction Tiger' and last valid bid was submitted by the Appellant with Rs.38,40,00,000/- on 28.02.2022 at 03:21 PM which was accepted by the system whereas on 03:23 PM, the Respondent No.1 submitted bid of Rs.38,40,00,000/- which was rejected by the system and the Appellant was declared as the highest bidder by the system. The Appellant has deposited the entire amount as required by the Liquidator and the Adjudicating Authority ought not to have interfered with the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Liquidation ( Corporate Debtor') forming part of Liquidation Estate offered by the Liquidator appointed by the Hon'ble NCLT Bench Ahmedabad vide order dated 15.07.2020. The sale of assets will be carried by the liquidator through e-auction platform at the web portal of https://ncltauction.auctiontiger.net. Date of e-auction is on Monday, 28.02.2022 (Timing: 11:00 am to 05:00 pm) with unlimited extension of five minute. Description Remarks 1 Event Type Auction under Liquidation Process 2 Property Details Option 1: Sale of Corporate Debtor as going concern along with all its assets [including land and building, plant and machinery and financial assets (excluding Cash Bank Balance)]. Option 2: Sale of set of assets collectively [including land and building, plant and machinery and financial assets (excluding Cash Bank Balance)]. Option 3: Sale on Standalone basis of Plant and Machinery including securities and financial assets (excluding Cash Bank Balance). Option 4: Sale on Standalone Bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent No.1 and another bidder participated in the e-auction held on 28.02.2022. All the three participants agreed to the auction document. At page 139 of the paper book, the Appellant has annexed details of the domain and the options. The document at page 139 mentions that - The auction under option 1/ option 2 to be carried out simultaneously and the bidder giving the highest bid under either of the options will be allotted the sale under the option selected by them and as informed to the liquidator. This is subject to terms and conditions as specified in the process document. 11. Reliance has been placed by the Appellant on the last three bids which have contained in the bidding document. It is useful to notice last seven entries i.e. entries on Sl. No. 172 to 178, which are to the following effect : Sr. No. Company Name Bid amount Bid date and time IP address Bid Status Remarks .. 172 .... Torrecid India Private Limited (jayesh@torrecid. com) ... 38,15,00,000.00 .... 28/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to our notice that during e-auction process, the Applicant had not raised the bid amount by Rs. 5 Lakhs intermittently which was mandated by the tender document and that point of time and that every point of time, the Applicant's bid was rejected by the system itself. Considering the material on record, we hold that during the entire e-auction process, if any party did not raise its offer by a certain sum of money that it is not sufficient to reject its bid unless and until its final offer is considered. Ultimately, the result of e-auction would depend on as to what amount is offered finally by the party taking part in the auction process. In this case, at end of eauction both the Applicant and successful bidder have finally offered the same amount but the Applicant had offered the amount to purchase the Corporate Debtor as a going concern. It is true that the Applicant ought to have raised the amount of Rs. 5 Lakh but in our considered opinion, the liquidator ought to have taken into consideration of the broad object of Insolvency and Bankruptcy Code, 2016 to sell the Corporate Debtor as a going concern and it was the pre-condition for e-auction set out by the liquidator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the highest bidder of the said auction has to consider the above clause as extracted above. The Liquidator went on only by the bidding platform and declared the Appellant as highest bidder since the bid of Respondent No.1 was rejected by the system. The fact is that the Respondent No.1 has matched the bid given by the Appellant and the matching of bid which was relevant for purchase by a bidder under option 1 as a relevant consideration and by various increase of the bidding incremental amount several times, Respondent No.1 has matched the bid of Appellant and on several occasion it has given a higher bid also. The entry at Item no.124 shows that Appellant gave bid of Rs.38,25,00,000/- thereafter Respondent No.1 immediately gave same bid of Rs.38,25,00,000/-, which was rejected by the system, then the Appellant increased its bid from Rs.38,25,00,000/- to Rs.38,40,00,000/- and again the Respondent No.1 matched the bid by giving same bid of Rs.38,40,00,000/-. There is no dispute that one of the participant i.e. Respondent No.1 has submitted bids under option 1 i.e. sale of Corporate Debtor as going concern and bid by the Appellant was under option 2 and preference to bid under opti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be no quarrel to the proposition laid down by the Hon'ble Supreme Court. In view of the aforesaid para, the Liquidator is the best person, in facts of the present case, to appreciate the requirements and interpretation of the Information Document and E-auction Document issued by him. In the present case, the Liquidator has not given effect to the requirement in the Information Document that in event bid under option 1 and 2 are equal, the bidder under option 1 shall be declared as successful bidder. 17. Another judgment relied by the Appellant in (2022) 5 SCC 302, Agmatel India Pvt. Ltd. vs. Resoursys Telecom Ors. , where in Para 24 and 26 on the interpretation of tender document following has been laid down by the Hon'ble Supreme Court: 24. The scope of judicial review in contractual matters, and particularly in relation to the process of interpretation of tender document, has been the subject matter of discussion in various decisions of this Court. We need not multiply the authorities on the subject, as suffice it would be refer to the 3-Judge Bench decision of this Court in Galaxy Transport Agency (supra) wherein, among others, the said decision in Afcons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Adjudicating Authority was as to whether in the facts and circumstances of the present case, on an application, Respondent No.1 was required to be declared as successful bidder, which decision has been taken by the Adjudicating Authority after considering the relevant Process Document. This Tribunal in the case of Y. Shivram Prasad vs. S. Dhanpal Ors., Company Appeal (AT) (Ins) No. 224 of 2018 has held as under:- 13. Therefore, it is clear that during the liquidation process, steps required to be taken for its revival and continuance of the Corporate Debtor by protecting the Corporate Debtor from its management and from a death by liquidation. Thus, the steps which are required to be taken are as follows:- i. By compromise or arrangement with the creditors, or class of creditors or members or class of members in terms of Section 230 of the Companies Act, 2013. ii. On failure, the liquidator is required to take step to sell the business of the 'Corporate Debtor' as going concern in its totality along with the employees. 14. The last stage will be death of the 'Corporate Debtor' by liquidation, which should be avoided. We see n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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