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TMI Blog2025 (3) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Authority extending the time of payment after expiry of time of payment prescribed. As noticed above, an application filed by successful bidder/ successful auction purchaser for extension of time was allowed by the Adjudicating Authority on 05.05.2020 which was challenged by the Appellant in Company Appeal (AT) (Ins.) No.343 of 2021 which came to be dismissed on 16.09.2022 - The law laid down by the Hon'ble Supreme Court clearly comes to the aid of the successful bidder in the present case. Adjudicating Authority having extended the time for deposit of the amount which deposit was made and thereafter application was filed for approval of the sale which has also been granted by the Adjudicating Authority.
Conclusion - While the provisions of Clause 12 of Schedule 1 are mandatory, the Adjudicating Authority has the discretion to extend the timeline for payment under certain circumstances, exercising its statutory and inherent powers.
There are no ground to interfere with the impugned orders - appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ssful bidder and issued a sale notice for re-auction on 05.02.2024. Successful bidder filed an application IA No.722 of 2024 praying for extension of time in making payment of balance sale consideration. The Adjudicating Authority vide impugned order dated 27.02.2024 directed the liquidator to accept post dated cheques payable on or before expiry of 60 days from the last date along with the interest. Aggrieved by the order dated 27.02.2024, this appeal has been filed by Rajabhau Shinde. 2.2. After the order dated 27.02.2024, total consideration along with interest was paid by the successful bidder. The liquidator has filed an IA No.1693 of 2024 praying for approval of the sale of the corporate debtor in favour of S.M Electric Works. Liquidator also prayed for certain reliefs and concessions in favour of successful bidder. The application filed by the liquidator being IA No.1693 of 2024 came to be heard and disposed of by order dated 15.07.2024. Adjudicating Authority approved the sale in favour of S.M Electric Works and has also granted certain reliefs and concessions as noticed in paragraph 5. Aggrieved by the order dated 15.07.2024, Company Appeal (AT) (Insolvency) No.1655 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.02.2024 has directed for balance payment with interest of 10% on the delayed period to compensate the SCC. No prejudice has been caused to the SCC. SCC has accepted the amount paid within definite period and distribution to the stakeholders and thereafter the application was filed for approval of the sale which has also been allowed. Appellant has filed Appeal challenging the liquidation order which appeal also came to be dismissed by this Tribunal. 6. Counsel for the liquidator submits that the liquidator has conducted the proceeding in accordance with the Liquidation Regulations 2016 and when successful bidder could not make the balance payment within 90 days, liquidator has intimated cancelling the sale and has issued notice for re-auction. In view of the order passed by the Adjudicating Authority dated 27.02.2024, liquidator accepted the balance payment consideration which was paid along with interest and thereafter application was filed for approval of the sale which has also been allowed on 15.07.2024. 7. We have considered the submissions of the counsel for the parties and perused the record. 8. E-auction was held in accordance with Insolvency and Bankruptcy Board of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd July, 2021 payment of the balance amount of Rs. 54, 75, 75, 000/- with interest at the rate of 12% on or before 1st September, 2021. Appellant did not deposit the balance amount and I.A. No. 3153 of 2021 was filed by the Appellant wherein prayers contained 'a' to 'z'. It shall be sufficient to notice only prayer 'a' out of 'a' to 'z' which is as follows: "(a) allow the Applicant to pay/adjust the Sale consideration in the following matter (i) INR 50 Crore/- by way of investment into the equity shares of the Corporate Debtor; and (ii) the balance amount of INR 23 Crore/- in the form of Optionally Convertible Debentures;" 3. The Appellant having not made the payment by 1st September, 2021, which was the timeline when 90 days was expiring, the Liquidator filed an Application I.A. No. 5255 of 2021 wherein making following prayers : "a). Allow the present application and permit the Liquidator i.e. the Applicant to cancel the sale of Corporate Debtor as a going concern in view of the failure of Respondent to make payment in terms of 2nd proviso to Clause 1(12) under Schedule I of the Liquidation Process Regulations, 2016; and b). Conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant that since the second proviso under Rule 12 contemplates a consequence of cancellation of the auction on nonpayment of the balance sale consideration within 90 days, the Liquidator was not empowered to extend the timeline." 13. There can be no dispute to the proposition laid down by the Hon'ble Supreme Court in the above case. Clause 12 of Schedule 1 is mandatory and non-compliance leads to cancellation of the sale. It was also held by the Hon'ble Supreme Court that the liquidator was not empowered to extend the timeline. 14. The present is a case where it is not the liquidator who has extended the time to deposit the balance consideration rather in the present case, it was the Adjudicating Authority who has allowed the application filed by successful bidder for extending the time for payment of balance sale consideration. Adjudicating Authority in the impugned order in paragraph 7 directed as follows:- "7) Accordingly, we direct the Liquidator to accept the post-dated cheques payable on or before Expiry of Sixty (60) days from the last date along with the interest. Current E-auction process shall be remained stayed and may be proceeded with in case the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) to (o) of sub-section 1 including the power to sell an immovable/movable property of the Corporate Debtor in liquation by public auction/private sale as per clause (f), subject to the directions of the NCLT. Pertinently, it has been observed in Arun Kumar Jagatramka v. Jindal Steel and Power Limited54 that "the Liquidator exercises several functions which are quasi-judicial in nature and character. Section 35(1) itself enunciated that the powers and duties which are entrusted to the Liquidator are "subject to the directions of the Adjudicating Authority". The Liquidator, in other words, exercises functions which have been made amenable to the jurisdiction of NCLT, acting as the Adjudicating Authority.....". 35.16 In the facts of the present case, the Adjudicating Authority exercised statutory powers under Section 35 of the IBC read with its inherent powers under Rule 11 of the NCLT Rules, 2016 for extending the time to deposit the balance sale consideration on sufficient cause being shown, i.e., in view of the countrywide lockdown due to the Covid19 pandemic. This latitude that was given in the aforesaid extraordinary circumstances to meet the ends of justice, cannot be fault ..... X X X X Extracts X X X X X X X X Extracts X X X X
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