No Proof Of Technical Glitch: NCLT Delhi Declines To Interfere With Concluded E-Auction

The National Company Law Tribunal at New Delhi has recently refused to set aside a recently concluded e-auction in a bankruptcy matter, finding that the bidder challenging the sale failed to prove any technical glitch and that auction records showed continuous participation even after the time it claimed its system froze.

The application had been filed by Marinaindia Traexim Private Limited, which sought to annul the auction of assets belonging to bankrupt debtor Waseem Ahmad Khan.

A coram of President Justice Ramalingam Sudhakar and Technical Member Ravindra Chaturvedi said,“it is evident that the applicant has failed to prove his case or the existence of a technical glitch that prevented his participation in the bidding process. In view of the same, we do not find merit in the application."

The company had challenged the May 1, 2025 auction conducted by Linkstar Infosys Private Limited responsible for conducting the auction and maintaining the e-auction platform, after depositing earnest money of Rs 28.37 lakh for Lot 1 and Rs 18.36 lakh for Lot 2 and being approved to bid in an auction scheduled from 2 pm to 4 pm with automatic five-minute extensions. Lot 1 comprised land parcels totalling 8.483 hectares with a reserve price of Rs 2.83 crore, and Lot 2 comprised 4.046 hectares with a reserve price of Rs 1.83 crore.

Marinaindia claimed the platform functioned normally until about 3.52 pm, after which a technical failure allegedly prevented it from placing higher bids while rival bidder Bahl Paper Mills Limited continued bidding. It said it attempted to call the service provider during the auction but could not restore access, and argued that the malfunction deprived it of a fair chance to increase its bids.

The tribunal rejected these assertions after examining system-generated bid histories and login reports. It found that Marinaindia had in fact placed five bids for Lot 1 after 3.52 pm at 3:57 pm, 4:01 pm, 4:06 pm, 4:11 pm and 4:16 pm and 19 bids for Lot 2 after 3.52 pm until 5:12 pm.

It held that “the contention now raised by the applicant is contrary to the factual position, as the bid history clearly shows the continuous participation.”

The tribunal noted that no other bidder faced any difficulty using the same platform and recorded the service provider's server and CPU-utilisation data showing no latency or downtime. It observed that had it been any error or glitch concerning the server, it ought to have affected all the participants.

The tribunal further found that Marinaindia failed to act within the five-minute extension windows after the successful bidder placed the final bids at 4:20:38 pm for Lot 1 and 5:13:54 pm for Lot 2, and that it raised no immediate complaint. It said the applicant “did not raise any objection for a considerable period,” calling the challenge “an afterthought". It reiterated that the bidder's allegation that he was unable to participate in the bidding process after 3.52 PM is contradicted by the records.

Finding no ground for interference, it rejected the applicant's connected pleas to restrain the sale and appoint a technical expert.

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