9911796707
TMI Blog2024 (4) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... Bidder challenging the order dated 01.06.2023 passed by National Company Law Tribunal, Allahabad Bench, Prayagraj in IA No.394 of 2022 filed by the Appellant, insofar as it did not grant relief as prayed in prayer clause V(B) of IA No.394 of 2022 and further did not direct Respondent to pay interest @ 12% per annum from 10.06.2022 actual date of issuance of Sale Certificate till 02.06.2023 on sale consideration amount deposited by the Appellant. 2. Brief facts of the case necessary to be noted for deciding the Appeal are: (i) Corporate Insolvency Resolution Process ("CIRP") process commenced against the Corporate Debtor - JVL Agro Industries Ltd. by an order passed by the Adjudicating Authority in Section 7 Application filed by Standard Chartered Bank on 25.07.2018. On 19.08.2020, an order was passed by Adjudicating Authority directing for liquidation of the Corporate Debtor. (ii) Order of liquidation was challenged by Promoter in this Tribunal by filing Appeal being Company Appeal (AT) (Insolvency) Nos.832 of 2020 - Satya Narayan Jhunjhunwala vs. Supriyo Kumar Chaudhuri, which Appeal was dismissed by this Tribunal vide order dated 18.01.2022. After dismissal of the Appeal by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iquidator filed IA No.210 of 2022 for urgent hearing of IA Nos.89 and 98 of 2022. Another IA No.292 of 2022 was filed by the Liquidator on 19.09.2022 for urgent hearing of IA Nos.89 and 98 of 2022, which Application was rejected by the Adjudicating Authority on 19.09.2022. An Appeal (Company Appeal (AT) (Insolvency) No.1235 of 2022) was preferred by the Liquidator against the order dated 19.09.2022, which was dismissed by this Tribunal on 13.10.2022 requesting the Adjudicating Authority to consider the matter on the date fixed or as early as possible. (vii) On 04.11.2022, the Appellant filed IA No.394 of 2022 praying for issuance of Sale Certificate, which was stayed by order dated 04.04.2022. The Appellant filed Company Appeal (AT) (Insolvency) No.1525 of 2022 claiming that order dated 04.04.2022 was not absolute prohibiting from issuing Sale Certificate and Sale Certificate could be very well issued, even if it is subject to order passed in IA 98 of 2022. The Appeal was disposed of on 23.12.2022 requesting the Adjudicating Authority to consider IA No.394 of 2022 on the next date or as early as possible. (viii) Hearing took place on IA Nos.89 and 98 of 2022 and by order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iquidator did not take appropriate steps for obtaining prior approval from the Adjudicating Authority for issuance of Sale Certificate. Hence, the amount of interest, which was earned by the deposit made the Appellant, the Appellant is entitled to get the refund. It is submitted that the Appellant has taken loan for making payment of the sale consideration and due to non-issuance of Sale Certificate, the Appellant, could not adhere to the terms of the Loan. The Appellant has also approached this Tribunal by filing an Appeal, being Company Appeal (AT) (Insolvency) No.1525 of 2022, which was disposed of on 23.12.2022. The order passed by the Adjudicating Authority is nonspeaking order and no reasons have been given for refusing the relief of interest as claimed by the Appellant. The Adjudicating Authority failed to exercise its jurisdiction under Section 60(5)(c) of the IBC read with Rule 11 of the NCLT Rules, 2016. The Adjudicating Authority failed to consider that provisions of Clause 12 and 13 of Schedule-1 of Liquidation Regulation 2016 are mandatory and the Liquidator ought to have obtained approval of the Adjudicating Authority for issuance of Sale Certificate. The entire sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal in this Tribunal being Company Appeal (AT) (Insolvency) No.1525 of 2022 seeking direction for issuance of Sale Certificate, which was prohibited by Adjudicating Authority by order dated 04.04.2022. The Appeal was disposed of by this Tribunal, however, the prayer of the Appellant to issue Sale Certificate was not granted. The Adjudicating Authority heard IA Nos.89 and 98 of 2022 on several dates and ultimately by order dated 01.06.2023 dismissed the Applications. Consequently, the Application filed by the Appellant being IA No.394 of 2022 was allowed. The Appellant is not entitled for any interest on the sale consideration. The sale consideration had to be deposited by the Appellant as per the terms and condition of E-auction, which also noticed that Sale Certificate could not be issued to the Appellant due to restraint contained in the order dated 04.04.2022 and Liquidator is not to be blamed for any restriction imposed by the Adjudicating Authority. The Liquidator has taken all necessary steps for disposal of the matter and the Appellant's submission that the Liquidator has not done his duty is wholly incorrect and fallacious. There is no question of unjust enrichment by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating Authority and orders were reserved on 07.06.2022. However, the Bench being reconstituted, the matter was again listed for rehearing. The Liquidator filed IA No.210 of 2022 for early hearing and again IA No.292 of 2022 was filed for early hearing, which was dismissed by the Adjudicating Authority on 19.09.2022. The order dated 19.09.2022 passed by the Adjudicating Authority on IA No.292 of 2022 is as follows: "IA No. 292 / 2022 This application has been filed by the applicant/ liquidator under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 with a prayer to prepone the applications bearing IA No.89 of 2022 and IA No.98 of 2022 in CP (IB) No.223/ALD/2018 at the earliest date. We have perused the last order in which the next date of hearing is 18th October, 2022. Keeping in view the fact that this Bench is also holding the Chandigarh Bench and there is a huge pendency in both the Benches and additionally, considering the urgency in the matter involved, we have already fixed it higher on the board on the date fixed and parties have been directed to file their written submissions. In these circumstances, there is no justification to prepone the application and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as per clause 6 of the E-Auction Process Document annexed at Annexure-C read with the provisions of stipulated under Regulation 33 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016; [C] That this Hon'ble Tribunal may be pleased to direct to grant an order directing the respondent to issue Final Sales Invoice as contemplated in the Sale Notice dated 11.04.2022 annexed at Annexure-B and E-Auction Process Information Document dated 11.04.2022 annexed at Annexure-C so as to enable the applicant to make requisite payment towards GST and TCS as per the provisions of the law; [D] That this Hon'ble Tribunal may be pleased to fix early date of hearing of Interlocutory Application No. 98 of 2022 in CP(IB) No. 223 of 2018, and dispose the same as expeditiously possible; [E] Pending the admission, hearing and final disposal of this application, this Hon'ble Tribunal may be pleased to direct the respondent herein to deposit an amount of Rs 85 Crores in a Cumulative Fixed Deposit Receipts in a Nationalised Bank for the period till the Sale Certificate in terms of the Sale Notice and EAuction Process Information Document, both dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not issue any direction to issue Sale Certificate. This Tribunal noticed that amount deposited by the Appellant has been deposited in Term Deposit Advice, which has been produced in the Court. This Tribunal, however, disposed of the Appeal observing that Adjudicating Authority shall give priority to the matter and take appropriate decision as early as possible. In paragraphs 5 and 6 of the order, this Tribunal directed : "5. The Application 394 of 2022 is still pending before the Adjudicating Authority and we have been informed that it is fixed on 25th January, 2023, we see no reason to keep this Appeal pending, we dispose of this Appeal requesting the Adjudicating Authority to consider the I.A. No. 394 of 2022 on the next date or as early as possible and pass appropriate Order. Both the parties may request the Adjudicating Authority to pass any further order as may be deemed fit and proper. 6. Appellant having deposited the huge amount of Rs. 107.35 Crores, it is expected that the Adjudicating Authority shall give priority to the matter and take appropriate decision as early as possible. Learned Counsel for the Liquidator submits that period of deposit is automatically renewa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hedule-1, which is under Regulation 33 of the Liquidation Process Regulation, provides as follows : "(12) On the close of the auction, the highest bidder shall be invited to provide balance sale consideration within ninety days of the date of such demand: Provided that payments made after thirty days shall attract interest at the rate of 12%: Provided further that the sale shall be cancelled if the payment is not received within ninety days. (13) On payment of the full amount, the sale shall stand completed, the liquidator shall execute certificate of sale or sale deed to transfer such assets and the assets shall be delivered to him in the manner specified in the terms of sale." 18. The Regulations provides that on the close of the auction, the highest bidder shall be invited to provide balance sale consideration within ninety days from the date of such demand and Regulation (13) provides that on payment of the full amount, the sale shall stand completed and the Liquidator shall execute certificate of sale. There cannot be any dispute to the statutory scheme as delineated under Clauses 12 and 13 of the Schedule-1 of the Liquidation Regulation. But as noted above, there being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Interest in equity has been held to be payable on the market rate even though the deed contains no mention of interest. Applicability of the rule to award interest in equity is attracted on the existence of a state of circumstances being established which justify the exercise of such equitable jurisdiction and such circumstances can be many. 22. We may refer to the decision of this Court in Executive Engineer, Dhenkanal Minor Irrigation Division v. N.C. Budharaj [(2001) 2 SCC 721] wherein the controversy relating to the power of an arbitrator (under the Arbitration Act, 1940) to award interest for pre-reference period has been settled at rest by the Constitution Bench. The majority speaking through Doraiswamy Raju, J., has opined that the basic proposition of law that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation by whatever name it may be called viz. interest, compensation or damages and this proposition is unmistakable and valid; the efficacy and binding nature of such law cannot be either diminished or whittled down. It was held that in the absence of anything in the arbitration agreement, excludin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate was issued and assets were handed over to the Appellant. No one can be said to be prejudiced by order of the Court. The Liquidator has made all efforts for disposal of the IA Nos. 89 and 98 of 2022 and it cannot be said that Liquidator failed in its duty in prosecuting the proceedings and taking steps to obtain approval of the Adjudicating Authority for issuance of the Sale Certificate. 23. The sale consideration was deposited by the Appellant, which was lying with the Liquidator and has earned interest. Sale consideration received for the assets of the Corporate Debtor is to be distributed to the stakeholders. The present is a case where assets have been handed over to the Appellant. Present is not a case where due to any reason, the Appellant is entitled for refund of sale consideration. In event the Appellant may be entitled for refund of sale consideration the prayer for refund of the sale consideration along with interest could have been considered. But, here the sale consideration, which was deposited and which has earned interest is in lieu of the assets, which have been ultimately sold to the Appellant and handed over to him. 24. We, thus, are of the view there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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