Successful Bidder Prohibited From Claiming Reliefs Or Concessions Not Provided In Sale Document: NCLT Amravati

The National Company Law Tribunal (NCLT) Amravati bench of Shri Umesh Kumar Shukla (Technical Member) and Shri Kishore Vemulapalli (Judicial Member) has held that Successful Bidder cannot claim reliefs, concessions or waivers which were not included in the sale document. Reliefs and concessions can only be claimed which are expressly provided in the Sale Document. The present application has been filed under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking cancellation of the sale on the ground that the Liquidator failed to file the application for waivers, concessions and other consequent reliefs. The Liquidator submitted that if there is a default in payment of balance sale consideration and any applicable GST or other terms, duty or fees on 100% of the bid sum by the successful bidder, the same will result in disqualification of the successful bidder including forfeiture of the entire sums paid by the bidder. It was further submitted that Applicant has not only made delayed payments, but has also failed to take steps/ pay any other applicable dues i.e., GST, Stamp Duty and Interest on delayed payment. Therefore, Applicant cannot seek cancellation of sale and refund of the amount paid by it, when the Applicant itself is at fault and had violated the terms of the e-process document. The Applicant sought to cancel the proposed sale transaction and refund of the entire amount of Rs.7.58 crore paid by the Applicant. The Tribunal observed that Bidders who participate in the auction sale are deemed to have accepted the terms and conditions of the sale therefore they cannot later claim the reliefs, concessions or waivers which were not included in the auction sale. Therefore, the Applicant's plea of cancelling the sale deed on the ground that the Liquidator had failed to seek the reliefs was rejected. It further observed that reliefs and concessions must be transparently disclosed in the sale documents to ensure fair participation and value maximisation. Post sale benefits should be avoided to ensure financial discipline. These benefits will give unfair advantage to the successful bidder. A bidder who acquires assets on as is where is basis cannot later be permitted to seek modifications or challenge the terms of the sale documents and is estopped from doing so. In light of the above discussion, the first argument of the Applicant that since the Liquidator failed to file an application seeking concessions and reliefs, the sale should be cancelled was rejected. As for the second submission that since the Liquidator failed to file an application for the completion of the sale, the sale of should be cancelled. The Tribunal noted that the sale will complete only after the entire payment of sale. In this case, the full payment also included payment of GST, stamp duty and other applicable charges. However, the Applicant failed to pay these charges therefore the Liquidator was right in forfeiting the deposited amount. Accordingly, the present application was dismissed. Case Title:M/s. Indian Renewable Energy Development Agency Limited Versus M/s. Saradambika Power Plant Pvt. Ltd. Case Number: IA (IBC)/153/2025, IA (IBC)/99/2025, IA (IBC)/104/2025, IA (IBC)/401/2022 & IA(IBC)/224/2022 IN CP(IB)/4/7/AMR/2021 Order Date: 01/07/2025 Click Here To Download Order/Judgement

Successful Bidder Prohibited From Claiming Reliefs Or Concessions Not Provided In Sale Document: NCLT Amravati

Mohd Malik Chauhan

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Successful Bidder Prohibited From Claiming Reliefs Or Concessions Not Provided In Sale Document: NCLT Amravati

Mohd Malik Chauhan

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INR 1099+GST

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