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TMI Blog2024 (6) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... n endorsing the extended timeline proposed by the Appellant. Doctrine of pprobation and reprobation - HELD THAT:- It is a fact that the Appellant moved an application for seeking extension of the timelines and based on the request of the Appellant the Adjudicating Authority vide its Impugned Order extended the timelines but also stipulated condition regarding forfeiture. It is already noted that in the earlier discussion that the clause of forfeiture was added by the Adjudicating Authority in terms of Rule 15 of the NCLT Rules, 2016. It is settled principle based on doctrine of approbation and reprobation that party can either accept benefit arising of the same order or can challenge the same but not both. The Appellant gave his deemed acceptance to the Impugned Order dated 29.06.2022 by making their two payments. Hence, there are force in the logic of the Respondent and the Appellant cannot be allowed such pleadings. Appeal dismissed. - [ Mr. Naresh Salecha ] Member ( Technical ) For the Appellant : Mr. Virender Ganda, Senior Advocate For Mr. Vishal Ganda along with Ms. Akanksha Mathur, Ms. Tanya Hasija and Mr. Anshit Aggarwal. For the Respondents : Mr. T. K. Bhaskar, Mr. Mayan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals in the present judgment. 5. Shorn of unnecessary details, it is suffice to note that Surana Industries Limited (in short Corporate Debtor ) was admitted into the Corporate Insolvency Resolution Process (in short CIRP ) on 02.01.2018. Subsequently, the Committee of Creditors (in short CoC ), after finding no resolution of the Corporate Debtor, decided to initiate the liquidation process against the Corporate Debtor and the Respondent filed an application bearing MA/453/2018 under Section 33(1)(a) of the Code and the Adjudicating Authority passed order dated 12.10.2018 and permitted for initiation of liquidation proceedings against the Corporate Debtor and also appointed Mr. Ramakrishnan Sadasivan as the Liquidator. 6. Heard the Counsel for the Parties and perused the records made available including the cited judgements. 7. It has been brought out that the Respondent has made several attempts to sale the assets of the Corporate Debtor in terms of Section 35(1)(f) of the Code and provisions contained in Insolvency and Bankruptcy Board of India (Liquidation Regulations), 2016 (in short Liquidation Regulation,2016). The Respondent conducted six auctions between the 06.02.2019 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor to the Appellant as a going concern for total consideration of Rs. 105.21 Crores and directed the Appellant to pay the amount within 15 days from the date of receipt of the order. 14. Now we would like to note the relevant portion of the said I.A. 997/ CHE/ 2021 in TCP/95/CHE/2017 filed by the Appellant which reads as under :- 3. Due to elapse of considerable time since the liquidation Commencement date, the decision was taken to sell the Raichur Assets at the scrap value of approximately Rs. 50 crores, The same was communicated to the creditors at the Stakeholders' Meeting held on 31.07.2021. While the position stood thus, the Liquidator received a bid dated 09.09.2021 for purchase of the Corporate Debtor as a going concern on, an as is where is basis , as is what is basis , whatever there is basis , and no recourse basis for Rs. 105.21 crores. The bid was made by the Respondent herein and certain concessions and waivers have been sought in connection with the purchase of the Corporate Debtor as a going concern. A copy of the bid submitted by the Respondent is annexed herewith as ANNEXURE A7. The Liquidator, after verifying that the proposal received from the Respondent i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2022, therefore, the Appellant had time till 15.04.2022 to make the balance payment. 16. The Appellant submitted that since more than six months passed between his original efforts for tying up for unsecured debts and passing of the order by the Adjudicating Authority approving his bids, it became difficult for him to immediately conclude fresh tie up with the investors since in the meanwhile the market conditions deteriorated due to Ukraine war. 17. It is informed that looking to the problem of the Appellant, 10th SCC Meeting was held on 13.04.2022, wherein the Stakeholders and the Respondent were apprised by the Appellant about his genuine difficulties. However, the Stakeholders advised the Appellant that they could not suo-moto extend the timelines without approval of the Adjudicating Authority. 18. At this stage, we would like to take into account the relevant portion highlighted both by the Appellant as well as the Respondent regarding relevant discussion on the subject in 10th SCC Meeting held on 13.04.2022 which reads as under :- After deliberations, Mr Drabesh Jha proposed a revised schedule for the payment proposal which is as follows- *Note: Since 15th April, 2022 being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as unanimous decision of all members of SCC. The Appellant assailed the conduct of the Adjudicating Authority who on his own imposed the clause regarding forfeiture, as a consequences for delayed payment by the Appellant instead of penal interest, as decided between the Stakeholders and the Appellant. 23. The Appellant in Company Appeal (AT) (Insolvency) No. 438 of 2022 has assailed the Impugned Order dated 29.06.2022 whereby the Adjudicating Authority allegedly gone beyond the terms which was mutually agreed between the Stakeholders and the Appellant in 10th SCC Meeting. The Appellant submitted that vide the Impugned Order dated 29.06.2022, the Adjudicating Authority directed the Appellant to pay on or before 30.06.2022 the balance of 50% of the sale consideration i.e., Rs. 36.60 Crores with 12% interest from 15.04.2022 till date of payment and further directed that remaining sum of Rs. 34.60 Cores to be paid on or before 31.07.202 with 12% interest from 15.04.2022 till the date o f payment. 24. At this stage, we would also record and reproduce the relevant portion of the Impugned Order dated 29.06.2022 which reads as under :- Order i. The Applicant is directed to pay on or before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted before the Adjudicating Authority on 04.08.2022, however during the period between 29.07.2022 i.e., the date of filing the application by the Appellant and the date of hearing on 04.08.2022, several development took place including provisional order dated 01.08.2022 of the ED in respect of certain properties of the Corporate Debtor and 13th meeting convened by the SCC on 01.08.2022 which decided to forfeit the amount deposited by the Appellant in view of Adjudicating Authority earlier order dated 29.06.2022. 30. Hence, it will be necessary to go through the relevant portion of the 13th SCC Minutes, which reads as under :- Views of the stakeholders present:- The member representing IDBI Bank stated that since a Court Order was passed by the Hon'ble NCLT Chennai with specific directions to the buyer to pay the entire sale consideration on or before 31st July 2022, it is beyond the scope of the stakeholders to accept any extension of timelines beyond 31st July, 2022. The member further stated that since the extension has been in discussion for a period of 3 months which is quite a long period, it would be difficult to place any proposal for further extension, before their lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TCP/95/IB/2017.The Appellant summarised that he has sought few relief which reads as under :- i. Quash and set aside the letter dated August 2, 2022; ii. Grant immunity to Corporate Debtor and its assets from any actions in relation of any offence committed prior to the commencement of the corporate insolvency resolution process; iii. The Appellant pending adjudication of this application, sought the following reliefs- Direct the Respondent to maintain status quo with respect to the assets of the Corporate Debtor; Grant an extension of time period for payment of the balance consideration; and Waive the payment of the interest at the rate of 12% per annum. (Emphasis Supplied) 33. The Appellant mentioned that the above application was heard on 10.08.2022 and the Adjudicating Authority erred in passing the Impugned Order dated 10.08.2022 dismissing his application and as such aggrieved by the same, the Appellant has preferred the present appeal before this Appellate Tribunal. 34. We will go into details of relevant portion of the Impugned Order dated 10.08.2021, which is as under :- 7. The Applicant/successful bidder therefore file Application viz. IA (IBC)/512(CHE)/2022 before this T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with interest @ 12% per annum, as per the order of this Tribunal dated 29.06.2022 passed in IA (IBC)/512(CHE)/2022. The letter has also stated that it is issued is in adherence to the order of this Tribunal dated 29.06.2022 and accordingly the amount of Rs.37.80 Crore which was paid by the Applicant was forfeited. 12. Further, the Learned Senior Counsel for the referred to the provision of Sec.32A(2) of IBC, 2016 and thereto, to say that in view of the Press Release dated 14.07.2022 issued by the Enforcement Directorate, the apprehensions of the applicant who has purchased the properties of the Corporate Debtor as a going concern, was that action may be taken by the Enforcement Director and this property also which is apparent from the Press Release. Therefore, the Learned Senior Counsel submitted that the time period should be extended to him, so that he will be able to make further payment and clear the issue. 14. At this juncture, we raised certain queries to the Senior Counsel Mr. Virender Ganda appearing for the Applicant / Buyer. The time for payment was 15.04.2022 for the balance payment of approx Rs.95 Crores as per Order dated 22.03.2022 passed by this Tribunal. As to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me for payment on some pretext or the other. There is no proper explanation for the extended period of payment. The application conduct of paying in installment reveals that except making the EMD, there was no provision to pay the balance by 15.04.2022 19. Be that as may be, on the facts as discussed above, we are not inclined to invoke section 32A(2) of IBC, 2016 in the present case because the stage has not come for us to give an interpretation to that provision in the facts of the present case. 20. The question that arises for consideration in the present case is whether the letter dated 02.08.2022 issued by the Liquidator of Surana Industries Ltd., should be quashed as per prayer(a). To this, our clear- answer is NO, because the Liquidator issued the consequential letter based on the final order passed by this Tribunal on 29.06.2022, which has set out the time line for the payment and for forfeiture, if there is any deviation on the time line as extracted in para 7 of this order. If the applicant is aggrieved, he has to challenge the order of this Tribunal dated 29.06.2022, which he has not done. Merely challenging the Liquidator's letter dated 2nd August, 2022 will not suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that subsequent to the Impugned Order dated 10.08.2022, the Respondent on 12.08.2022 published an e-auction sale notice of the assets of the Raichur Assets. 37. The Appellant submitted that since then the assets of the Corporate Debtor i.e., Raichur Assets have been sold at Rs. 145.38 Crores, therefore, there was no loss caused to the Financial Creditors because of the delay and submitted that he should have been returned his deposited amount of Rs. 37.8 Crores which is almost 30% of the total sale consideration of Rs. 105.21 Crores. 38. The Appellant submitted that the Adjudicating Authority has caused a grave injustice to the Appellant and has given undue and illegal enrichment to the Stakeholders of the Corporate Debtor, who were themselves responsible for leading the Corporate Debtor to liquidation. 39. The Appellant emphasised that the sale of the Corporate Debtor as a going concern to the Appellant is governed by Regulation 33(2)(c) r/w Schedule I, entry 2 of the IBBI (liquidation process) Regulations, 2016 and not under Regulation 33(2)(d) of the Liquidation Regulations, 2016. 40. The Appellant also submitted that sale of such assets stand completed in accordance with the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riage of justice. The Appellant also brought out that in the case of State of Orissa Anr. v. Mamata Mohanty, (2011) 3 SCC 436, it was held that :- It is a settled legal proposition that as a rule relief not founded on the pleadings should not be granted. 46. The Appellant strongly argued that the present case is of private sale and in effect was a contract entered into between the Stakeholders and the Respondent and as such is to be covered by the terms agreed upon both the parties. Therefore, the Adjudicating Authority could not levy any condition beyond the contract entered into between the Appellant and the Respondent. The Appellant elaborated that the terms of conditions of private sale are covered under Indian Contract Act, 1872. The Appellant further stated that in terms of the Indian Contract Act, 1872, the Liquidated Damages , if any, could have been levied only in accordance with Section 74 of the Indian Contract Act, 1872. 47. In this connection, the Appellant cited judgment M/s R.K. Industries (Unit-II) LLP vs. M/s H.R. Commercials Private Limited and Other CA No. 7722 of 2021, where it was held that :- The jurisdiction bestowed upon the Adjudicating Authority [NCLT] and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich were not intended by the legislature. 49. It is the case of the Appellant that the Hon ble Supreme Court of India and various other High Courts have also observed from time to time that the liquidated damages should be claimed based on that actual losses incurred into breach and not more than that. 50. The Appellant submitted that the Assets of the Corporate Debtor was subsequently sold at Rs. 145.38 Crores which is more than the amount offered by the Appellant of Rs. 105.21 Crores therefore no amount including the commitment advance paid by the Appellant could have been affected by the Adjudicating Authority. In this regard, the Appellant cited two judgments, namely, Bombay High Court - Sau. Jyoti v. Sau. Sindhubai Ramraoji Shende Anr., 2017 SCC Online Bom 8181, which reads as under :- Terms of the contract must be clear and explicit to justify forfeiture of the advance amount. Further, if the amount paid is towards part payment of consideration and not intended to be earnest money, then the forfeiture clause would not apply. and Suresh Kumar Wadhwa v. State of Madhya Pradesh Ors., (2017) 16 SCC 757 A right to forfeit being a contractual right and penal in nature, the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property has been sold. As no lesser amount is received, there is no loss caused to the Respondents. 53. The Appellant refuted the charge of the Respondent that the Appellant concealed the information regarding his writ filed before the Hon ble Madras High Court and pointed out that the writ proceedings have no bearing on the proceedings before this Appellate Tribunal and relied on the observation made by the Hon ble Supreme Court in the case of S.J.S. Business Enterprises Pvt. Ltd. v. State of Bihar Ors. (2004) 7 SCC 166: The existence of an adequate or suitable alternative remedy available to a litigant is merely a factor which a court entertaining an application under Article 226 will consider for exercising the discretion to issue a writ under Article 226. But the existence of such remedy does not impinge upon the jurisdiction of the High Court to deal with the matter itself if it is in a position to do so on the basis of the affidavits filed. 54. Concluding his remarks, the Appellant pointed out that both the Impugned Orders deserves to be set aside and the Appeals be allowed. 55. Per-contra, the Respondent denied all the averments of the Appellant in both the Appeals, treati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Impugned Order dated 29.06.2022 and manged to get stay on the distribution, however, after hearing of the case, the Hon ble Madras High Court dismissed the said Writ Petition and stay was vacated and subsequently, forfeited amount was distributed amongst the Financial Creditors on 05.12.2022. 61. The Respondent submitted that the Appellant cannot make a virtue out of his own defaults and submitted that several opportunities were given to him in accordance with law, however, the Appellant miserably failed to meet the stipulated timelines and therefore, there was no alternative for the stakeholders but to find an alternative way and thereafter they succeeded in selling the same to Texcon Steel Ltd. for Rs. 145.38 Crores. 62. The Respondent alleged that the Appellant is seeking approbation and reprobation simultaneously, since on one hand, the Appellant is making a case that Stakeholder made wrong enrichment due to forfeiture whereas on the other hand the Appellant alleged that the Respondent have not distributed forfeiture amount within Stipulated 90 days violating Regulation 42 of Liquidation Regulation, 2016. 63. The Respondent reiterated that the Appellant made payments of Rs 1.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. 68. The Respondent cited judgment in the case of Union of India (UOI) and Ors. Vs. N. Murugesan and Ors.- Civil Appeal Nos. 2491-2492 and 2493-2494 of 2021 and State of Punjab and Ors. Vs. Dhanjit Singh Sandhu Civil Appeal Nos. 5698-5699 of 2009 in support of his case. 69. The Respondent strongly refuted that Indian Contract Act, 1872 has anything to do in the present appeals and stated that Section 73 and 74 of the Contract Act, 1872 are not applicable here in the facts of the present case. 70. The Respondent highlighted that the sale was made to the Appellant through a private sale which was required to be approved by the Adjudicating Authority in accordance with the Liquidation Rules, 2016 and this fact is unambiguous and clear. 71. The Respondent submitted that since, several concessions were sought by the Appellant, the Respondent had to approach the Adjudicating Authority to approve the sale as a going concern to the Appellant and therefore, although this was a private sale, it was a sale approved by the Adjudicating Authority and therefore, is not covered under Section 73 and 74 of the Indian Contract Act, 1872. The Respondent cited the judgment of this Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing paragraphs:- Issues, inter-alia captured are :- (i) Whether, private sale was subject to Regulation 33(2)(c) or subject to Regulation 33(2)(d) of the liquidation regulation, 2016. (ii) Whether, the Indian Contract Act, 1872 in the present appeals, would be applicable for private sale or the private sale would be covered as per provisions of the Code r/w Liquidation Regulation, 2016. (iii) Whether Section 73 and 74 of the Indian Contract Act, 1872 are applicable in the present appeals. (iv) Whether, application was made before the Adjudicating Authority only for seeking exemptions in terms of Liquidation Regulation, 2016 or for confirmation of the private sale in favour of the Appellant. (v) Whether, the Adjudicating Authority has power to impose the conditions not recommend by SCC as contained the Impugned Order dated 29th June, 2022 w.r.t. forfeiture of the amount paid by the Appellant. (vi) Whether liquidated damages, if any, in the manner of forfeiture, could have been recovered from the Appellant. (vii) Whether, the minutes of the 10th SCC were unanimous decision or only recorded the submission made by the Appellants. (viii) Whether, the filing of the Writ Petition by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these Regulations when few conditions are met. ➢ The condition 33(2)(a) is applicable when assets is perishable and Regulation 33(2) (b) is applicable when asset is likely to deteriorate its value if not sold immediately. These two conditions are not applicable in the present appeals. ➢ It is the case of the Appellant that the private sale was done in terms of Regulation 33 (2) (c) i.e., when assets is sold at a price higher than the reserve price of a failed auction. On the other hand, the Respondent has taken a strong plea that a private sale was made in terms of Regulation 33(2)(d) i.e., private sale subject to prior permission of the Adjudicating Authority is required to be obtained. ➢ It is a fact that there have been several attempts to auction the Raichur Assets which failed. It is also a fact that assets were sold at the price higher than the reserve price of a failed auction. However, we note that the Appellant sought several concessions and relief while giving his bid for Rs. 105.21 Crores. These reliefs were obviously not within the domain of liquidator or the Stakeholder Committee and were required to be approved by the Adjudicating Authority. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant portion of the minutes reads as under :- List of the Proposal submitted by Shri Karshnt Alloys Private Limited: S.No. Description 1. Amount of Sale Consideration Rs. 105.21 Crores 2. Amount of Commitment Advance (received) Rs. 105.21 Crores (10% of the total sale consideration) 3. Date of remittance of Balance Sale Consideration Within 15 days from the date of approval of the sale by Hon'ble NCLT 4. Regulation 32- Manner of sale As per Regulation 32(e) - Sale of the corporate debtor as a going concern 5. Regulation 33 - Mode of Sale As per Regulation 33(2)(d) - Sale by means private sale 6. Comfort Letter for the payment of Balance Sale Consideration The Buyer has submitted a Letter of Comfort from M / s Kamal Renu Credit Invest Private Limited stating their intention to provide Financial support to Shri Karshni Alloys Private Limited for acquisition and running operations of the Corporate Debtor ( Emphasis Supplied ) ➢ We further take into consideration that IA filed by the Appellant bearing I.A No. 512 of 2022 in I.A. No. 997/CHE/2021 in TCP/95/CHE/2017 on 22.09.2021 before the Adjudicating Authority for seeking extension of time up to 31.05.2022 and in the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers which permits the Adjudicating Authority to consider such request for extension of time. We note that the Adjudicating Authority has power to extend the time in terms of Rule 15 of NCLT Rules, 2016 which reads as under :- 15. Power to extend time.- The Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore is not made until after the expiration of the time appointed or allowed. (Emphasis Supplied) This rule empowers the Tribunal to extend the time fixed by these rules or fixed by any other orders, upon such terms, if any, as the justice of the case may require. ➢ From the facts of the present case, it is noted that the sale of Raichur Assets has seen prolonged history and only after 13 consecutive failure of auction, the bid of the Appellant was accepted by the SCC in its 9th SCC Meeting. It is also noted that the Appellant later sought extension of time which is also considered in the 10th SCC Meeting. However, in the 10th SCC Meeting, the Stakeholders were dissatisfied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale was cancelled and the amount was forfeited by the SCC. The SCC further authorised the Respondent to conduct a fresh auction and finally the assets of the Corporate Debtor were sold to Texcon Steel Ltd. for Rs. 145.38 Crores. ➢ Hence, the contention of the Appellant prima-facie seems attractive as the Respondent received more than Rs. 105.21 Crores. However, looking from other perspective, it is a fact that the Financial Creditors could not recover the outstanding dues and also could not sale the assets even finally at the first liquidation value of Rs. 338.01 Crores. ➢ Be that as it may, the Adjudicating Authority after examining of the merit did stipulate the condition regarding forfeiture of the money in the case of failure of the Appellant to pay in time of the amount already paid by the Appellant. ➢ It is a undisputed fact that the Appellant failed to make the payments in time and consequently the money was forfeited. In such circumstance, it is not really material whether finally the auction value was more than the amount proposed by the Appellant and in true sense they have not been any alleged undue enrichment by the Stakeholder at the cost of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia vs. C. Natarajan Anr. Civil Appeal no. 2545 of 2023, where Hon ble Supreme Court of India held that :- 24. The up-shot of the aforesaid discussion is that whenever a challenge is laid to an order of forfeiture made by an authorized officer under sub-rule (5) of rule 9 of the Rules by a bidder, who has failed to deposit the entire sale price within ninety days, the tribunals/courts ought to be extremely reluctant to interfere unless, of course, a very exceptional case for interference is set up. What would constitute a very exceptional case, however, must be determined by the tribunals/courts on the facts of each case and by recording cogent reasons for the conclusion reached. Insofar as challenge to an order of forfeiture that is made upon rejection of an application for extension of time prior to expiry of ninety days and within the stipulated period is concerned, the scrutiny could be a bit more intrusive for ascertaining whether any patent arbitrariness or unreasonableness in the decision making process has had the effect of vitiating the order under challenge. However, in course of such scrutiny, the tribunals/courts must be careful and cautious and direct their attention t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le price and take possession of the auctioned immovable property. The contesting respondent not having deposited the balance amount of sale price by 23rd October, 2018, the mutual agreement for extension of time, thus, lapsed with effect from 24th October, 2017. This resulted in the order of forfeiture being passed by the Authorized Officer in terms of sub-rule (5). 26. We do not see reason to hold that there has either been any manifest arbitrariness or unreasonableness, which warranted interdiction with the order of forfeiture. The contesting respondent in terms of the statutory ordainment was required to pay the balance amount of sale price on or before 15 days of confirmation of sale. Days prior to expiry of such period, he prayed for an extension of 25 days. Such prayer was granted. Further prayer for extension was made ten days after receipt of summons from the DRT. The exact date on which the contesting respondent applied before the DRT for extension of time as well as the exact terms of the order passed on such application, however, is not available on record. We shall proceed on the premise that the prayer for extension of time was not granted. The order of the Authorized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 74 of the 1872 Act, thereby gaming the entire auction process and leaving any possibility of recoveries under the SARFAESI Act at naught. [See; C. Natarajan (supra) at Para 19] 65. Thus, such an interpretation would completely defeat the very purpose and object of the SARFAESI Act and would reduce the measures provided under Section 13 of the SARFAESI Act to a farce and thereby undermine the country s economic interest. 90. We are conscious of the decision of this Court in Kailash Nath Associates v. Delhi Development Authority Anr. reported in (2015) 4 SCC 136 wherein it was held that Section 74 of the 1872 Act will be applicable to cases of forfeiture of earnest-money deposit, however, where such forfeiture takes place under the terms and conditions of a public auction, Section 74 will have no application. The relevant observations are reproduced below: - 43.1. Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the court. In other cases, where a sum is nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subsequent sale and as such was not entitled to forfeit the entire amount of deposit as doing so would amount to unjust enrichment, which is not permissible by the SARFAESI Act. 106. However, we are not in agreement with the aforesaid observations of the High Court. When an auction fails and a fresh auction is required to be conducted in respect of the Secured Asset, there looms a degree of uncertainty as to the extent of bids that may be received in the future auction or whether the fresh auction would even be successful or not. More often than not, with the efflux of time, the value of the Secured Asset erodes. In such a case it would be preposterous to tie or limit the forfeiture under Rule 9(5) of the SARFAESI Rules on an eventuality or a contingency of a subsequent sale of the secured asset if any. 107. As regards whether, the forfeiture of the entire amount of deposit even after having recovered the entire debt amounts to unjust enrichment or not? It would be apposite to understand what is meant by unjust enrichment . 110. This Court in C. Natarajan (supra) had held that forfeiture of 25% of the deposit does not constitute as an unjust enrichment with the following relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at much higher value of Rs. 145.38 Crores against his offered bid of Rs. 105.21 Crores and therefore the money paid by the Appellant, should not have been forfeited, is not sustainable. ➢ As regard another issue whether the minutes of the 10th SCC were unanimous endorsing extension of time as proposed by the Appellant herein or the Stakeholders did not agree to the same, we would like to refer to the relevant portion of the 10th SCC Meeting, which is seen as under :- ➢ From above minutes, we note that the item No. 1 i.e., schedule of payment proposed by the Appellant was discussed in details and lenders gave their views that since court order on approval of sale was passed by the Adjudicating Authority with specific directions to pay the sale consideration within 15 days from the receipt of the order, it was beyond their scope to accept any extended timelines beyond the stipulated period. The minutes further recorded regarding jurisdiction of the Adjudicating Authority to consider and allow appropriate extensions as to be sought by the Appellant. The lenders also expressed in above minutes their dissatisfaction for seeking extension of timelines by the Appellant till ..... X X X X Extracts X X X X X X X X Extracts X X X X
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