Xylocopa Builders & Developers Private Limited vs Ms. Namrata Amol Randeri Liquidator Of Turning Point Estates Private Limited

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
Company Appeal (AT) (Insolvency) No. 658 of 2025
[Arising out of Order dated 28.03.2025 passed by the Adjudicating
Authority (National Company Law Tribunal, Court Room No. 1, Mumbai
Bench), in I.A./5114/2024 in C.P. (IB)/3714(MB) 2019]
IN THE MATTER OF:
Xylocopa Builders & Developers Pvt. Ltd. …Appellant

Versus
Namrata Amol Randeri
Liquidator of Turning Point Estates Pvt. Ltd.

…Respondent

Present:
For Appellant : Mr. Abhijeet Sinha, Sr. Advocate with Ms. Neha
Agarwal, Mr. Vinod Nagula, Ms. Samita Nangre
and Mr. Saikat Sarkar, Advocates.

For Respondent : Mr. Chitranshul A. Sinha, Mr. Shivam Shorewala,
Ms. Rakshita Bhargava, Ms. Archie Garg and Ms.
Esha Sharma, Advocates.
J U D G M E N T
ASHOK BHUSHAN, J.
This appeal has been filed challenging the order dated 28.03.2025
passed by the adjudicating authority (National Company Law Tribunal, Court
Room No. 1, Mumbai Bench) rejecting I.A. No.5114/2024 filed by the
appellant. Aggrieved by the order rejecting I.A. No.5114/2024 this appeal has
been filed.
2. Brief background facts of the case giving rise to this appeal are:
i. The corporate debtor, Turning Point Estates Pvt. Ltd. was admitted to
Corporate Insolvency Resolution Process (CIRP) on 10.01.2020.

ii. Adjudicating authority vide order dated 09.02.2023 ordered the
corporate debtor to be liquidated. The liquidator issued sale notice for
sale of the property dated 18.03.2024. E-Auction Process
th
Memorandum was also issued on 16.04.2024 for 9 e-Auction on
19.04.2024.
iii. The reserve price was Rs.81 crore and Earnest Money Deposit (EMD) of
5% being Rs.4.05 crore was provided for. The appellant deposited EMD
of Rs. 4.05 crore in the auction held on 09.04.2024, appellant was
declared as Successful Auction Purchaser. Letter of Intent (LoI) was
issued in favour of the appellant.
iv. On 09.05.2024, balance amount toward 25% was deposited i.e.,
Rs.16.2 crore totalling to Rs.20.25 crore. Appellant has applied to
Union Bank of India for grant of financial assistance for payment of the
balance amount.
v. It was observed by the appellant in June 2024 that there is a
charge/encumbrance of the Department of Excise on the assets. Bank
also informed the appellant of the charge/encumbrance of the
Department of Excise.
vi. On 17.07.2024, extension for deposit of balance 75% was sought by the
appellant, which was granted till 21.08.2024. I.A. No. 5831/2024 was
filed by the appellant seeking removal of the charge of Department of
Excise.
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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th
vii. On 14.09.2024 an email was sent by liquidator cancelling the 9
Auction conducted on 19.04.2024 and forfeiting the amount deposited
by the appellant. On 26.09.2024 another letter was sent by liquidator
informing that 25% amount deposited by the appellant has been
forfeited. On 17.10.2024, liquidator issued fresh notice of sale and an
I.A. No.5114/2024 was filed by the appellant to restrain respondent
from taking steps in terms of the email dated 14.09.2024.
viii. On 25.10.2024, interim stay was granted in favour of the appellant. On
23.01.2025, adjudicating authority directed for deletion of the lien mark
in favour of the Excise Department. On 06.02.2025, adjudicating
authority directed the appellant to submit confirmation from the Bank
about disbursement within three days after removal of lien. On
04.03.2025, interim order was vacated by the adjudicating authority
and Comp. App. (AT) (Ins.) No.445/2025 filed by the appellant which
was disposed of on 18.03.2025, giving liberty to the appellant to press
for any interim relief in the pending matter. The order was reserved on
I.A. No. 5114/2024. Fresh e-Auction notice was issued on 02.04.2025
for e-Auction on 02.05.2025.
ix. Adjudicating authority by the impugned order dated 28.03.2025,
rejected the I.A.5114/2024. The e-Auction in pursuance of the notice
02.04.2025 took place and assets have been sold for the amount of
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Rs.81 crore, in pursuance of 11 e-Auction notice. The auction of the
assets was conducted by the liquidator with the object for maximisation
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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realisation of the assets. Aggrieved by the order dated 28.03.2025, this
appeal has been filed.
3. We have heard learned Sr. counsel Mr. Abhijeet Sinha appearing for the
appellant as well as learned counsel Mr. Chitranshul A. Sinha appearing for
the liquidator.
4. Learned counsel for the appellant in support of the appeal submits that
deposit of balance amount of Rs.75 crore could not be made by the appellant
because of Union Bank of India having refused to disburse the loan due to
charge created in favour of the Excise Department on the assets. Appellant
was always ready and willing to deposit the full amount and has applied loan
from the Union Bank of India for payment of 75%. Bank has also sanctioned
the loan which letter was produced before the adjudicating authority.
Adjudicating authority being aware of the encumbrance created in favour of
Excise Department has passed an order on 23.01.2025 directing for removal
of the lien, whereas, liquidator on 14.09.2024 had already issued
communication cancelling the auction in favour of the appellant and forfeiting
the amount deposited. Adjudicating authority had also granted interim relief
in the application of the appellant to protect the interest of the appellant,
looking to the facts and circumstances of the case that there is encumbrance.
It is submitted that the adjudicating authority has also directed the appellant
to obtain confirmation of the Bank that Bank shall disburse the amount
within three working days form the date of intimation about deletion of the
lien, which order was passed on 06.02.2025. The ad-interim relief was
vacated on 04.03.2025 leading to the liquidator in issuance of fresh auction
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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notice dated 02.04.2025. On 04.03.2025, show cause notice was issued to
Tehsildar, Mohali as to why proceeding under Contempt of Court be not
initiated for disobedience of the order dated 23.01.2025. 30 days’ time was
given for reply. It is submitted that above order of adjudicating authority itself
contemplated that Court has taken steps for deletion of encumbrance and
prior to deletion of encumbrances, appellant was not expected to make a
balance payment. The order dated 06.02.2025 passed by the adjudicating
authority also clearly granted liberty to the appellant to obtain a confirmation
from the Bank that Bank shall disburse the amount of loan within three
working days form the date of intimation about deletion of the lien.
5. The sequence of the event clearly indicate that appellant cannot be held
responsible for not able to pay the balance amount of 75%, since the Bank
did not disburse the amount due to encumbrance on the assets. It is
submitted that the liquidator could not have forfeited the amount in the above
facts and background. The liquidator having sold the same asset for an
amount of Rs.81 crore on 02.05.2025, it cannot be allowed to unduly enrich
by forfeiting amount of 25%.

6. Learned counsel for the respondent refuting the submissions of the
counsel for the appellant submits that the e-Auction Process Document
clearly contemplated that EMD shall liable to be forfeited, in event the
successful bidder failed to pay the sale consideration in accordance with the
prescribed schedule. The Letter of Intent (LoI) was unconditionally accepted
by the appellant, who was required to deposit the entire balance amount
within 90 days and payment beyond 30 days with interest @ 12% per annum.
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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Appellant sent an email on 17.06.2024 to the liquidator seeking clarification
regarding charge/encumbrance on the assets. On the request of the
appellant, extension to deposit the balance amount was granted by
Committee of Stakeholders. Appellant having failed to deposit the amount,
liquidator has issued the email on 14.09.2024 cancelling the sale and
forfeiting the amount at per the e-Auction Process Document. The I.A.
5114/2024 filed by the appellant has rightly been rejected. It was
responsibility of the appellant to obtain and deposit the balance amount form
its sources and non-deposit of the balance amount within the prescribed time
has led to cancellation of the auction sale and forfeiture of the amount. There
was no compliance made by the appellant to the order dated 05.02.2025,
hence the adjudicating authority has vacated the interim protection on
04.03.2025. No submission was advanced by the appellant to demonstrate
the availability of funds, there being no availability of funds with the appellant
auction has rightly been cancelled by the liquidator forfeiting the amount.
Process Memorandum itself contemplated due diligence by all bidders and
bidders cannot be heard that they were not aware of the encumbrance on the
asset, hence are unable to pay the balance amount. Encumbrance or charge
th
cannot be ground to refuse the payment of balance amount. In 11 e-Auction
held on 02.05.2025, the assets have been sold for Rs.81 crore and the
property has been awarded to the highest bidder.
7. We have considered the submissions of the counsel for the parties and
perused the records.
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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8. Learned counsel for both the parties have placed reliance on the various
judgments of the Hon’ble Supreme Court and this Tribunal in support of their
submissions, which we shall consider hereinafter.
9. Before we proceed, we need to notice certain clauses of e-Auction
Process Memorandum dated 18.03.2024. Process Memorandum clearly
contemplated that bidders should conduct their own investigation and
analysis and should check the accuracy/correctness of the statement and
information contained in the Process Memorandum. Clause 3.4 is as follows:
“3.4 This Process Memorandum is neither an
agreement nor an offer by the Liquidator to the
prospective Bidders/Applicants / or any other person.
The purpose of this Process Memorandum is to provide
interested parties with information that may be useful
to them in making their bids pursuant to this Process
Memorandum. The assumptions, assessments,
statements and information contained in the Process
Memorandum may not be complete, accurate,
adequate or correct. Each Applicant/ Bidder should,
therefore, conduct its own investigations and analysis
and should check the accuracy, adequacy,
correctness, reliability and completeness of the
assumptions, assessments, statements and
information contained in this Process Memorandum
and obtain independent advice from appropriate
sources, as considered necessary.”

10. Clause 8 of the e-Auction Process Memorandum dealt with site visit and
discussion meetings. Clause 9 dealt with due diligence and clarification.
Clause 9.3 provided as follows:
“9.3 Kindly note that as informed there are a few
litigations ongoing before different forums like DRT
Jabalpur- RC 402/2016 (OA 228 of 2013), DRT III
Chandigarh- OA 1146/2017 (OA 724 of 2015), DRT III
Chandigarh- SA 325/2017 (Old SA No. 355/2013),
High Court of Punjab- CR 2065/2022, District and
Sessions Court SAS Nagar, Mohali CS 21/2016 (CS
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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577/2015), District Judge, SAS Nagar, Mohali- CIS No.
CM-475-2022 (Civil Appeal). The details of litigation as
shared is to the best of our knowledge. However,
qualified bidder shall do their own legal due diligence
for the suits / legal proceedings, liquidator shall not
accept any responsibility or liability whatsoever, in
respect of any statements or omissions contained in
the shared data or otherwise”
11. Clause 11 dealt with EMD under the heading ‘Forfeiture of Earnest
Money Deposit”. Following is stated in Clause 11:
➢
“Forfeiture of Earnest Money
The Earnest Money furnished can be forfeited at any
time, upon the occurrence of any of the following
events:
a) if any of the conditions under this Process
Memorandum are breached by the auction
process applicant or in case the auction process
applicant is found to have made any
misrepresentation; or
b) if the auction process applicant is found to be
ineligible to submit the bid under Section 29A of
the IBC (as amended from time to time) or is found
to have made a false or misleading declaration of
eligibility under Section 29A of the IBC (as
amended from time to time); or
c) if the auction process applicant is identified as
the Successful bidder and it fails to pay the
consideration amount as per schedule or does not
accept the Letter of Intent issued by the
Liquidator.”
12. Further under the heading “Schedule to LoI – Time and Manner of
Payment” under Clause 11 is captured in following manner:
➢
“SCHEDULE TO LOI - TIME AND MANNER OF
PAYMENT
The successful bidder shall deposit:
• 25% of the bid value (including EMD) to be
remitted within 20 (twenty) days from the date of
auction
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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• The Balance 75% of the Sale / Bid Price is
payable on or before the 30th day from the date of E-
auction, but not exceeding 90 days from the date of E-
auction where interest would be applicable on the
payments made after 30 days from the date of E-
auction, as per applicable law.
• Taxes to be payable as per applicable laws.”
13. There is no dispute of the facts between the parties that appellant was
declared Successful Auction Purchaser in the auction held on 19.04.2024 for
an amount of Rs.81 crore. Appellant has deposited the EMD of Rs.4.05 core
and further amount totalling to 25% i.e., Rs.20.25 crore. On 09.05.2024, the
appellant communicated to the liquidator asking clarification regarding the
encumbrances of the Excise Department on the assets. It is an admitted fact
that there was charge of the Excise Department on the assets of the corporate
debtor. The appellant has applied loan to the Union Bank of India for making
payment of 75% of balance sale consideration, during title search, the
encumbrance of Excise Department was noticed and communicated by the
Bank. On 14.09.2024, the liquidator has issued the email to the appellant
for cancellation of sale and forfeiture of the amount deposited by successful
bidder on account of default in making payment. The email provided as
follows:
“XYLOCOPA BUILDERS AND DEVELOPERS PRIVATE
LIMITED [email protected]
Cancellation of sale and Forfeiture of amount
deposited by the successful bidder on account of
default in making payment of balance sale
consideration within the stipulated timeline in
the matter of Turning Point Estates Pvt Ltd (under
liquidation)
NAMRATA RANDERI [email protected]
14 September 2014 at 10:38
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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To: XYLOCOPA BUILDERS AND DEVELOPERS
PRIVATE LIMITED [email protected]
Cc. Namrata Randed [email protected]
To,
Xylocopa Builders && Devolopers Pvt Ltd
Basenwnt Akash Enclave, 134 Devi Chiranjivi Cofony
Surya Nagar, Gopalpura Bypass Jaipur 302015
Dear Sir,
Subject: Cancellation of sale and Forfeiture of
amount deposited by the successful bidder un
account of default in making payment of balance
sale consideration within the stipulated timeline
in the matter of Turning Point Estates Pvt. Ltd
(under liquidation)
This is with reference to the 9th e-auction conducted on
19.04.2024 wherein you were declared as the
successful bidder with a sale consideration of 81 crore.
Subsequently, undersigned issued Letter of Intent (LOI)
on 19.04.2024 and the same was unconditionally
accepted by you. The process memorandum clearly
communicated the terms of payment which specified
that 25% of the bid value was in be paid within 20
days, and the remaining 75% was to be paid on or
before the 30th day from the auction date, not
exceeding 90 days, additionally, an interest of 12%
was applicable on payments made beyond 30 days, in
line with the applicable laws. The successful bidder
has paid 25% of the reserve price i.e. 5% of the reserve
rese price towards EMD and 20% amount was paid
before 20 days from the auction date whereas balance
75% was payable within the 30 days from the auction
date, not exceeding 90 days, additionally, an interest
of 12% was applicable on payments made beyond 30
days. The successful bidder was under obligation to
deposit the total consideration amount within 90 days
which was already expired on 18.07.2024. However,
as the successful bidder has only deposited 25% of the
bid amount till date and failed to pay the remaining
75% amount of the hid in due time.
It is relevant to note that an extension was also
granted to you by SCC in its 11th meeting held on
22.07.2024 in view of the Regulation 31A(h) of the
1BB1 (Liquidation Process) Regulations, 2016 but even
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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after the expiry of extended period, the successful
bidder has failed to deposit the remaining amount
Further to earlier communications exchanged and in
accordance with the terms and conditions of Sale as
per Insolvency and Bankruptcy Code 2016 (IBC 2016)
and regulations framed thereunder including
Insolvency and Bankruptcy Board of India (Liquidation
Process) Regulations 2016 (IBBI (Liquidation Process)
Regulations 2016), E-auction Sale Process
Memorandum, declarations, undertakings, Bid
Application Form and other documents submitted by
you including the Letter of Intent (LOI) unconditionally
accepted by you, the undersigned would like to apprise
you that on account of default in making the balance
sale consideration despite additional time being
allowed as per your request, the Sale of property under
the 9th E-auction conducted on 19/04 2034 is hereby
cancelled, and the amount deposited by you have been
forfeited
As per terms and conditions of sale agreed by you, the
property may be re-sold/re-auctioned or may be
disposed off in any other manner, and you shall have
no claim/right in respect of the Properties/assets of
the Company/amount.
With Regards,
From the Team of appointed Liquidator
IP Namrata Randeri. Liquidator in the matter of
TURNING POINT ESTATES PRIVATE LIMITED (under
liquidation vide Order of Hon'ble NCLT, Mumbai in IA
2503/MB/C-1/2020 IN CP (IB) 3714/MB/C-1/2019
th
dated 9 February, 2023)
IBBI Registration No. IBBI/IPA-001/IP-P01585/2019-
2020/12495
AFA Valid Till-19.11.2024
Process specific email ID- [email protected]
(Mob No. 9820937573)”
14. It was after receiving the email 14.09.2024, the appellant has filed the
I.A.5114/2024 praying for various reliefs as has been noticed by the
adjudicating authority in paragraph 2 of the order, which is as follows:
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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“i. That this Tribunal be pleased to set aside the
Impugned Email dated 14.09.2024 and Impugned
Letter dated 26.09.2024 issued by the Respondent;
ii. That this Hon'ble Tribunal be pleased to set aside
Notice of Sale dated 17.10.2024 issued by the
Respondent for auction of the said Property on
20.11.2024;
iii. This Tribunal during the pendency of the present
application, be pleased to restrain the Respondent and
for its agents, representatives and/or any person
acting through the Respondent from taking any
coercive steps in furtherance of the Impugned Email
and Impugned Letter;
iv. That this Tribunal during the pendency of the
present application, be pleased to restrain the
Respondent and for its agents, representatives and/or
any person acting through the Respondent from taking
any coercive steps in furtherance of the Notice of Sale
dated 17.10.2024;
ν. That this Tribunal during the pendency of the
present application, be pleased to stay the operation of
the Impugned Email, Impugned Letter and the Notice of
Sale dated 17.10.2024;
vi. For interim and ad-interim reliefs in terms of prayer
clause (c) to (e); and
vii. For such other and further reliefs, as this Hon'ble
Tribunal may deem fit, proper and necessary in the
circumstances of the present case.”
15. Appellant has filed another application I.A.5917/2024 seeking a
direction for deletion of the lien mark in favour of the Department of Excise &
Taxation Commissioner, Mohali, which application was entertained and on
23.01.2025, which application prayed for following reliefs:
“IA 5917/2024–
1. The present Interlocutory Application is filed by the
Liquidator seeking following reliefs; .
i. Direct the Respondents herein to remove the charge
created by them on the assets of the corporate debtor
situated at Village Badmajra, Hadbast No. 25, Tehsil
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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& district SAS Nagar, Mohali as specified in Para] 11
hereinabove; and
ii. Direct the Respondents to not create any hindrance
at the time of registration and execution of documents
pertaining to sale of assets of corporate debtor; or
iii. Pass any other order which the Hon'ble tribunal
deem fit in the light af justice, equity and good concise
in favor of the Applicant.”
16. Application was heard by the adjudicating authority and order was
passed and application I.A.5917/2024 was allowed on 23.01.2025 by issuing
following directions in paragraph 14:
“14. In view of this, we consider it appropriate to direct
the concerned revenue authorities to delete the lien
marded in favor of the department of Excise and
Taxation Commissioner, Mohali in their revenue
records in relation to assets of the corporate debtor
situated. at Village Badmajra, Hadbast No. 25, Tehsil
& district SAS Nagar, Mohali.”
17. On 06.02.2025, when I.A.5114/2024 came for consideration, liquidator
informed that liquidator has already informed the Excise of the order
23.01.2025. Adjudicating authority in paragraphs 2 to 4 directed as follows:
“2) Learned Counsel appearing for the Liquidator
informs that they have already taken steps and
informed the Excise Department about vacation of their
lien in the revenue records in terms of the order dated
23.01.2025 passed by this Bench. Further, they shall
take up with the Revenue Authority also for deletion of
the lien in their records. In view thereof, we consider it
appropriate to direct the successful buyers to submit a
copy of the order dated 23.01.2025 to the bank and
obtain a confirmation of the bank that they shall be
releasing the amount of loan within three working ·
days from· the date of intimation about deletion of lien
in revenue records by the Liquidator. The successful
buyers ·shall provide the contact details of the
concerned bank officer to the Liquidator within two
days.
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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4) The successful buyer shall extend necessary co-
operation in case required by the Liquidator in having
the charge deleted from the revenue records.”
18. On 04.03.2025, adjudicating authority vacated the interim relief and
has issued show cause notice to Tehsildar, Mohali to show cause as to why
proceeding under Contempt of Court be not initiated for disobedience of the
order dated 23.01.2025. The application I.A.5114/2024 came to be rejected
on 28.03.2025.
19. From submission of counsel for the parties and facts as noticed above,
following questions arise for consideration:
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I. Whether action of the liquidator in cancelling the 9 e-Auction by email
dated 14.09.2024 is in accordance with law and has rightly been upheld
in accordance with the e-Auction Process Memorandum?
II. Whether in facts of the present case, forfeiture of 25% amount deposited
by the appellant in pursuance of the auction held on 19.04.2024 is
justified?
III. What is the consequence and effect of auction sale property in favour
of another Successful Auction Purchaser for same amount of Rs.81
crore held on 02.05.2025?
Question No. (I)
20. We have already noticed relevant clauses of Process Memorandum as
per the LoI issued to the appellant, entire payment was to be made by the
appellant within 90 days and after 30 days payment also was to be made
along with 12% interest. Auction was held on 19.04.2024 and for
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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participating in the auction EMD of Rs. 4.05 crore was also deposited. Total
balance 25% was deposited by the appellant on 09.05.2024 as per LoI.
21. Learned counsel for the respondent has placed reliance on the
judgment of the Hon’ble Supreme Court in ‘V.S. Palanivel’ Vs. ‘Sri. Lakshmi
Hotels (P) Sriram, CS, Liquidator & Ors.’ reported in [(2025) 1 SCC 559].
The Hon’ble Supreme Court in paragraphs 66 & 67 of the said judgment laid
down following:
“66. The words “may” and “shall” used in different
provisions of Schedule I of the 2016 IBBI Regulations
go to show that the legislature intended to ascribe
different meanings to the said words depending on the
steps required to be taken by the Liquidator for the sale
of the assets of a corporate debtor. A perusal of the
Rules under Schedule I demonstrate that a play in the
joints has been given to the Liquidator only in
particular circumstances relating to the sale of an asset
through auction. Wherever the underlying intention is
to maximise realisation from the sale of assets,
discretion has been vested in the Liquidator to sell the
asset through auction in the best interest of the
creditors, but not otherwise. For the rest of the steps
towards sale of an asset, the mandate of the statute is
in the affirmative. In other words, a particular step if
prescribed, is necessarily required to be taken by the
Liquidator in the manner prescribed in the Rules under
Schedule I. He is not left with any discretion to condone
the delay.
67.
When broken down, Rule 12 states that : (a) the
highest bidder in an auction shall be called upon to
provide the balance sale consideration within 90 days
from the date of such a demand; (b) any payments
made after 30 days from such a demand shall attract
interest @ 12%; (c) if the payment is not received within
the period of 90 days, the sale shall be cancelled. The
word “shall” has been used thrice in Rule 12. Coming
next to Rule 13, the same states that : (a) the sale shall
stand completed on the payment of the full amount; (b)
the Liquidator shall execute a sale certificate/sale
deed to transfer such an asset(s); (c) the asset(s) shall
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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be delivered in the manner prescribed in terms of the
sale. The word “shall” has again been used thrice in
Rule 13. It is noticed that except for Rules 4-A, 4-B, 8
and Rule 11-A where the word “may” has been used
and it vests a discretion in the Liquidator to reduce the
reserve price more than once and conduct multiple
rounds of auctions with the purpose of maximising
realisation from the sale of assets in the best interest
of the creditors, in the remaining Rules, the word
“shall” features prominently and without an exception.
But that is not to say that wherever the word “shall”
has been used in the Rules under Schedule I, it attains
a mandatory nature. The Rule could still be construed
as purely procedural if its infraction does not entail any
serious or prejudicial consequence. Much will depend
on the connotation and the textual context of the Rule.”
22. The above judgment of the Hon’ble Supreme Court fully supports the
submission of the respondent that after appellant having participated in the
bidding process cannot be heard in saying that the payment of balance sale
consideration was linked with lifting of the attachment order. In the present
case, it is an admitted fact that payments of balance sale consideration was
not made by the appellant within 90 days or even the extended period
thereafter.
23. Liquidation process as per the IBBI Liquation Process Regulations,
2016 is a time bound process and in event Successful Auction Purchaser has
not complied the payment terms. Liquidator was fully competent to cancel
the e-Auction in favour of the appellant and proceed for fresh auction of the
process. The proceedings which were taken before the adjudicating authority
by the appellant by filing application I.A.5114/2024 and application
I.A.5917/2024 were the steps taken by granting indulgence to the appellant
to arrange for to make the payment of balance sale consideration. The prayer
of the appellant in I.A.5917/2024 was also allowed directing for deletion of
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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the charge, however the result is that balance sale consideration was not paid
and fresh e-Auction notice was also issued by liquidator. Adjudicating
authority although initially granted interim relief to the appellant asking
liquidator not to proceed with the sale notice which interim order was rightly
vacated on 04.03.2025.
24. We thus are of the view that cancellation of the sale by the liquidator
and e-Auction of the assets is in accordance with law. No error has been
committed by the adjudicating authority in rejecting the I.A.5114/2024,
insofar as appellant has made a prayer for setting aside the email of
14.09.2024 cancelling the auction sale in favour of the appellant.
25. The question No. (I) is answered as following:
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I. The action of the liquidator in cancelling the 9 e-Auction by email
14.09.2024 is in accordance with e-Auction Process Memorandum and
has rightly been upheld.
Question Nos. (II) & (III)
26. Question Nos. (II) & (III) being interconnected are being taken together.
27. The relevant clauses of Process Memorandum have already been
noticed by us in preceding paragraph of this judgment with respect to
payment of EMD, Clause 11 clearly provides that if the auction process
applicant is identified as the successful bidder and fails to pay the
consideration balance amount as per schedule, the EMD shall be forfeited.
EMD of Rs.4.05 crore was deposited by the appellant, no exception can be
taken to the email of the liquidator forfeiting the EMD. Only related question
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to be considered in the present case is as to whether present was a case where
forfeiture of the balance amount towards 25% was also required to be
forfeited.
28. The present is the case where adjudicating authority after coming to
know about the encumbrances of Excise Department has entertained the
application filed by the appellant being I.A.5917/2024 and allowed the said
I.A. on 23.01.2025 as noted above. Even on 06.02.2024, adjudicating
authority passed an order, where direction was issued to the successful buyer
i.e., appellant to submit copy of the order 23.01.2025 to the Bank and after
confirmation of the Bank that they shall be releasing the amount within three
working days from the date of intimating deletion of lien in revenue records.
Adjudicating authority has thus till that time had granted opportunity to the
appellant to ensure that balance amount is paid. Learned counsel for the
appellant submitted that appellant had filed the sanction letter from the Bank
sanctioning loan for payment of 75%, however, no intimation of deletion
having been issued to the Bank and Bank never released the amount.
Learned counsel for the appellant has placed reliance on the judgment of the
Hon’ble Supreme Court in ‘Delhi Development Authority’ Vs. ‘Corporation
Bank & Ors.’ reported in [2025 SCC OnLine SC 2071]. In paragraph 30 &
31 of the judgment, Hon’ble Supreme Court laid down following:
“30. We now address the position of the Auction
Purchaser. In Fibrosa Spolka Akcyjna v. Fairbairn
3
Lawson Combe Barbour Ltd. , it was held that any
civilized system of law is bound to provide remedies for
cases of what has been called unjust enrichment or
unjust benefit, that is, to prevent a man from retaining
the money of or some benefit derived from another
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which it is against conscience that he should keep.
Such remedies in English law are generally different
from remedies in contract or in tort, and are now
recognized to fall within a third category of the common
law which has been called quasi-contract or
restitution. The aforesaid legal proposition was
referred to with approval by a Two Judge Bench of this
Court in Nagpur Golden Transport Company v. Nath
4
Traders The restitution therefore becomes not merely
a legal device but a moral imperative. The principle of
restitution flows from the very heart of justice that no
one shall unjustly enrich himself at the instance of
another and that those who suffered without fault
should, so far as money can achieve, be restored to the
position they once occupied. The jurisdiction to make
restitution is inherent in every court and will be
exercised wherever the justice of the case demands.
31. In the facts of the present case, the Auction
Purchaser has been caught in the undertow of
circumstances, not of its making. Among all the actors
in this legal drama, it alone stands innocent. The
Auction Purchaser entered the auction in good faith,
placed its bid and deposited its hard-earned money in
the belief that the law clothed the auction with
legitimacy. The Auction Purchaser neither breached the
covenant nor failed in diligence and did not seek to
profit from the illegality. The restitution therefore
becomes not merely a legal device but a moral
imperative. It is this principle which in the facts of the
case must guide the relief to the Auction Purchaser. The
Bank having advanced the money of an illegal
mortgage and having chosen to auction what it never
lawfully possessed, bears the responsibility for the
consequences.”

29. Another judgment relied by the appellant is judgment of the Hon’ble
Supreme Court in ‘Viney Kumar Sharma’ Vs. ‘The Improvement Trust &
Anr.’ reported in [Civil Appeal No. ….. of 2026 arising out of SLP 24811
of 2025]. In the above case, when the auction by the Improvement Trust was
held pendency of litigation was not disclosed before the parties who offered
their bid. In the above context, Hon’ble Supreme Court relying on the
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judgment in ‘Delhi Development Authority’ (supra) directed the trust to
refund the amount, has made following observations in paragraphs 6, 9 & 12:
“6. It was the legal duty on the part of the Trust to have
made it clear in the auction notice itself that the subject
plot is a subject matter of litigation. Authorities (such
as banks, recovery officers, or state bodies) conducting
public auctions are legally required to disclose all
known encumbrances and litigation relating to the
property, as failure to do so invalidates the sale.
Suppressing such material facts renders the auction
fraudulent or vitiated by material irregularity.
9. Public auction is one of the modes of sale intending
to get highest competitive price for the property. Public
auction also ensures fairness in actions of the public
authorities and their officers who should act fairly and
objectively. Their actions should be legitimate. Their
dealing should be free from suspicion. Nothing should
be suggestive of bias, favouritism, nepotism or beset
with suspicious features of underbidding detrimental
legitimate interest of the stakeholders.
12. We direct the Trust to refund the amount of
Rs.1,57,04,580/- (Rs. One crore fifty seven lakh four
thousand five hundred eighty only) with interest at the
rate of 9% per annum from the date of the deposit i.e.
19.07.2021.”
30. The auction in the present case is being conducted under the IBBI
Liquidation Process Regulations, 2016 and as per the Process Document, we
are fully satisfied that insofar as forfeiture of the EMD that cannot be faulted,
however in the facts of the present case, the amount of Rs.16.20 crore which
was deposited on 09.05.2023 could be permitted to be refunded to the
th
appellant, due to the reason that in the subsequent 11 e-Auction held on
02.05.2025 assets have been sold by the liquidator for the same amount of
Rs.81 crore and liquidator has already realised the amount of Rs.81 crore,
permitting the amount of Rs.16.20 crore to remain with liquidator shall clearly
be unjust enrichment in the hands of the liquidator.
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31. We thus answer Question Nos. (II) & (III) in following manner:
II. The forfeiture of EMD amount of Rs.4.05 crore is upheld whereas
forfeiture of balance amount of 25% is Rs.16.20 crore is held not
sustainable.
III. In consequence of subsequent e-Auction held on 02.05.2025 for the
same amount of Rs. 81 crore, the amount of Rs.16.20 crore paid by
appellant deserve to be refunded.
We thus uphold the decision of the liquidator as well as adjudicating
authority insofar as it forfeits up to the extent of forfeiture of EMD amount of
Rs.4.05 crore. We, however in the special facts and circumstances of the
present case are inclined to set aside the letter of the liquidator dated
14.09.2024 and 26.09.2024 insofar as it forfeits the amount of Rs.16.20 crore
deposited on 09.05.2024.
32. In result the appeal is partly allowed in following manner:
i. The impugned order of the adjudicating authority dated 28.03.2025
insofar it upholds the decision of liquidator dated 14.09.2024
th
cancelling the 9 e-Auction in favour of the appellant is upheld.
Cancellation of e-Auction in favour of the appellant having been
upheld, subsequent e-Auction held by the liquidator was rightly
conducted.
ii. The letter of the liquidator dated 14.09.2024 and 26.09.2024 and the
order of the adjudicating authority 28.03.2025 insofar as it forfeits the
EMD of Rs.4.05 crore is upheld.
Comp. App. (AT) (Ins.) Nos. 658 of 2025
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iii. The letter of the liquidator dated 14.09.2024 and 26.09.2024 and the
order of the adjudicating authority 28.03.2025 forfeiting the amount
of Rs.16.20 crore paid on 09.05.2024 by the appellant is set aside.
The amount of Rs.16.20 crore be refunded to the appellant within 30
days from today. The refund of the amount shall carry 9% interest
per annum after expiry of 30 days period from today.
Parties shall bear their own costs.

[Justice Ashok Bhushan]
Chairperson


[Barun Mitra]
Member (Technical)

NEW DELHI
th
20 March, 2026
himanshu
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