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Judgment
[Per: Dr. Alok Srivastava, Member (T)]
This order shall dispose of two appeals i.e. CA (AT) (Ins) No. 514 of 2022 and CA (AT) (Ins) No. 513 of 2022 as the issue involved in both the appeals is common, and in both the cases the Appellant has challenged the order of ad-interim stay granted by the Adjudicating Authority. Appeal i.e. CA (AT) (Ins) No. 514 of 2022 has been filed against the order dated 28.02.2022 by which an ad-interim stay was granted, while the second appeal i.e. CA (AT) (Ins) No. 513 of 2022 has been filed against the order dated 22.03.2022, by which the order of stay has been extended. The first Impugned Order dated 28.2.2022 is hereinafter referred to as Impugned Order – 1 and Impugned Order dated 22.3.2022 is hereinafter referred to as Impugned Order – 2 respectively. Thus through this judgment, we will dispose of CA(AT) (Ins.) No.513 of 2022 and CA(AT) (Ins.) No.514 of 2022.
In brief, Corporate Insolvency Resolution Process (in short ‘CIRP’) of the corporate debtor was initiated vide order dated 28.06.2017 and the Appellant herein was appointed as the Interim Resolution Professional (in short ‘IRP’). The Appellant was appointed as Resolution Professional (in short ‘RP’) of the Corporate Debtor in the first meeting of CoC dated 27.07.2017. The Adjudicating Authority passed the order dated 22.01.2018 to initiate liquidation of the Corporate Debtor i.e. Roofit Industries Limited and the Appellant was appointed as the Liquidator. It is alleged that the Appellant as Liquidator of the Corporate Debtor, conducted a first e-auction on 01.12.2020 for the sale of immovable property viz. Plot No. B-15, Mirjole Block, MIDC, Opposite MSWC, Ratnagiri (hereafter called ‘The Property’). M/s Pavan Enterprises (Respondent) was declared as the successful bidder on 02.12.2020 and was asked to deposit the balance of auction sale price. The Respondent requested for the extension of time of 75 days in terms of Para No. 4.1 of the terms and conditions of e-auction on 16.12.2020 and the Liquidator granted him extension of time to deposit the balance of sale price. However, the Respondent requested for extension of another four weeks on 01.03.2021 for the payment of balance amount and sent a cheque dated 27.03.2021 for an amount of Rs. 2,24,00,000/- drawn on the Canara Bank. It is alleged by the Appellant that the Respondent did not pay a single penny after payment of CMD on 01.12.2020 till the expiry of 90 days i.e. till 02.03.2021 from the date of sale confirmation. The Appellant, therefore, forfeited the CMD deposited by the Respondent on 03.03.2021 and issued another e-auction notice for the sale of the same immovable property on 16.03.2021 which was extended to 19.03.2021 due to nationwide strike of the banks.
The Appellant has further stated that the Respondent, being aggrieved by the decision of the Appellant qua forfeiture of the CMD, filed an application bearing I.A. No. 468 of 2021 before the Adjudicating Authority, in which the Adjudicating Authority passed the order on 16.03.2021 directing that no further time shall be given to the Respondent for depositing the balance consideration amount of e-auction and the Respondent once again participated in the e-auction of March, 2021. The Appellant issued the e-auction confirmation letter dated 22.03.2021to the Respondent in which it was asked to pay full consideration within 15 days as prescribed in the terms and conditions of the second round of e-auction held in March, 2021. The Respondent sought extension of time of 15 days on 02.04.2021 which was granted by the Appellant making it clear that the Respondent will have to make balance payment by 21.4.2021 and that no further time shall be possible as was provided in the Terms & Conditions of the e-auction. The Respondent paid Rs. 75,00,000/- on 06.04.2021, but he did not pay the full consideration despite two opportunities being given to it. The Respondent again made a request for extension of time on 16.04.2021 which was rejected by the Appellant and aggrieved against the said decision of the Appellant, the Respondent filed another I.A No. 868 of 2021 on 20.04.2021. In view of the fact that the Respondent had failed to deposit the full sale consideration, the e-auction was cancelled by the Appellant on 23.04.2021 and forfeited the CMD of the Respondent deposited towards e-auction of December, 2021 and March 2021. It is claimed by the Appellant that on cancellation of offer to Respondent, the property was sold by the Appellant for a sum of Rs. 2.77 Crores to M/s Survival Technologies Pvt. Ltd. The Respondent in the meanwhile filed a Writ Petition No. 1200 of 2021 before the Hon’ble Bombay High Court seeking stay of the prospective e-auction. The Writ Petition filed by the Respondent was dismissed on 06.05.2021 and liberty was granted to pursue his application for relief before the Adjudicating Authority.
Aggrieved against the order of the Hon’ble High Court, the Respondent filed SLP(C) No. 7051 of 2021 before the Hon’ble Supreme Court against the Appellant, IBBI and Survival Technologies Pvt. Ltd. but the same was dismissed on 29.06.2021.
It is further stated by the Appellant that the purchaser, namely, Survival Technologies Pvt. Ltd. through a letter dated 13.12.2021asked the Appellant to cancel the sale of Ratnagiri property being frustrated in taking possession and making use of the property due to unnecessary litigation. On 17.12.2021, the Appellant filed appeal bearing CA (AT) (Ins) No. 1058 of 2021 before this Appellate Tribunal against the order dated 16.03.2021 passed by the Adjudicating Authority which was withdrawn vide order dated 17.12.2021 as it had become infructuous. The Respondent Pavan Enterprises filed IA No. 468/2021 regarding forfeiture of his CMD which was finally adjudicated by order dated 16.03.2021.
The Appellant has further stated that, upon withdrawal by Survival Technologies Pvt. Ltd., the Appellant issued fresh auction notice on 19.02.2022 at the reserve price of approx Rs. 2.89 Crores. On this, the Respondent published a public notice in the Ratnagiri Times on 23.02.2022, stating that its I.A. No. 868 of 2021 is pending before the Adjudicating Authority and the auction would be dependent upon the outcome of the said application. On 28.02.2022, the Adjudicating Authority, while hearing the application i.e. I.A. No. 485 of 2022 and 868 of 2021, passed the impugned order dated 28.2.2022, staying the third e-auction, in terms of notice published on 19.02.2022 for a period of three weeks from the date of the order. Hence, the appeal bearing CA (AT) (Ins) No. 514 of 2022 has been filed by the liquidator (Appellant).
On 22.03.2022, the Adjudicating Authority passed the order further extending the stay on the fresh (3rd round) e-auction of the Ratnagiri Property till 06.04.2022 but it is alleged that the matter was not called out due to paucity of time on 06.04.2022. The appeal bearing CA (AT) (Ins) No. 513 of 2022 is filed against the order dated 22.03.2022.
We heard the arguments of the Learned Counsels for Appellant/Liquidator and Respondent M/s Pavan Enterprises and perused the record.
The Learned Counsel for Appellant/Liquidator has referred to the Impugned Order dated 28.2.2022 in IA No. 485/2022 and 868/2021 to claim that after two unsuccessful attempts to sell of ‘the property’ a fresh e-auction notice was issued on 23.2.2022 (the third e-auction) for sale through public auction. He has further submitted that the respondent Pavan Enterprises has been frustrating the effort of liquidator in selling the property through a series of litigations and also by scaring prospective buyers. In order to place the proper context of the impugned orders, he has referred to the first round of e-auction held in December, 2020, wherein Pavan Enterprises became the successful bidder and was told to make full payment of the sale amount. He has further submitted that Pavan Enterprises sought extension of time for a period of 75 days through letter dated 16.12.2020 in accordance with the clause 4.1 of the ‘Terms and Conditions’ of the e-auction to deposit the balance of the sale amount but he failed to do so in the extended time period that was provided to him and with the result the e-auction was cancelled with forfeiture of the Caution Money Deposit (in short ‘CMD’).
The Learned Counsel for Appellant has further submitted that the second round of e-auction took place in March 2021 in which Pavan Enterprises was again adjudged the highest, and therefore, the successful bidder. The Learned Counsel for Appellant has further submitted that Pavan Enterprises sought extension of time vide letter dated 2.4.2021 for a period of 15 days to complete the full payment and agreed to pay interest @ 12% p.a. on the amount, as he could not get financial assistance from the bank which he needed to deposit the balance amount and committed itself to making complete payment of the balance sale amount by 21.4.2021, after being granted 15 days’ time extension as per clause 4.1 of the ‘Terms and Conditions’ of e-auction vide e-mail dated 2.4.2021. He has stated that the successful bidder Pavan Enterprises was informed through email dated 2.4.2021 that no further extension would be possible in accordance with the ‘Terms and Conditions’ of the e-auction. The Learned Counsel for Appellant has added that despite receiving 15 days’ extended time, Pavan Enterprises did not make full payment by 21.4.2021 as was required of him, and hence the Liquidator cancelled the offer made to Pavan Enterprise for sale of the said property.
He has submitted that the Respondent/Pavan Enterprises approached the Hon’ble High Court of Bombay to seek 45 days’ extra time to deposit the balance consideration but the Hon’ble Bombay High Court dismissed the petition of Pavan Enterprises on the ground that his application for the same relief was pending before the NCLT and granted him liberty to pursue that application before the NCLT. The Learned Counsel for Appellant has stated that the Respondent filed a Special Leave Petition bearing Special Leave to Appeal (C) No(s) 7051/2021 challenging the order dated 6.5.2021 of the Hon’ble Bombay High Court, which was dismissed as withdrawn vide order dated 29.6.2021 of the Hon’ble Supreme Court.
The Learned Counsel for Appellant has further submitted that after the offer made to Pavan Enterprises was cancelled by the Liquidator, Survival Technologies Pvt. Ltd. made an offer to purchase ‘the property’ for a total consideration of Rs. 2,77,00,000/- which was accepted by the Liquidator, but due to protracted and multiple litigations pursued by Pavan Enterprises before NCLT, Mumbai and Hon’ble Bombay High Court and the uncertainty looming large with respect to the status of the said property, it was unable to take possession of said property and start its project, and thus being frustrated, the purchaser Survival Technologies requested the Liquidator vide letter dated 13.12.2021 for refund of Rs.2.77 crores after withdrawing its offer to purchase the said property.
He has further submitted that a fresh notice was thereafter issued by the Liquidator for the third round of e-auction of ‘the property’ to be held in March 2022. He has argued that the Respondent wanted to thwart the effort being made by the Liquidator for auction-sale of the property, and in pursuance of such an objective, prior to the holding of the e-auction, it (Respondent Pavan Enterprises) caused publication of a public notice in the edition dated 23.2.2022 of the newspaper “Ratnagiri Times” informing the public that a case IA No. 868 of 2021 was pending regarding the said property in NCLT Mumbai thereby informing and warning the prospective buyers even though Pavan Enterprises did neither have a stay order for the e-auction in its favour nor it was desirable to obstruct the action of the Liquidator. The Learned Counsel for Appellant has claimed that in the above-mentioned situation, when the Respondent has been seeking extension of time and is unable to deposit the requisite balance sale amount due to probable difficulty in obtaining bank finance, the conduct of the Respondent is highly improper. He has stated that in the first round of e-auction Pavan Enterprises was granted 90 days’ time period to deposit the balance of sale consideration and again given 15 days’ time extension which was in accordance with clause 4.1 of the Terms and Conditions of the e-auction and because the purchaser Pavan Enterprises promised to make the payment by 21.4.2021.
He has pointed out that it was not necessary for the Appellant/Liquidator to grant 90 days’ time extension as per clause 12 of Schedule I of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (hereafter called ‘Liquidation Process Regulations’) as the stated ‘Terms and Conditions’ of the e-auction very clearly stipulated the maximum time that would be given to the purchaser to deposit the balance of consideration amount and Pavan Enterprises had accepted the said terms and Conditions. He has also referred to the order dated 16.3.2021 in IA No. 468/2021 whereby the Adjudicating Authority has allowed Pavan Enterprises to participate in the second round of e-auction after taking the CMD which was forfeited by the Liquidator as valid CMD. He has claimed that this order of the Adjudicating Authority was not appealed against and hence it has achieved finality, and therefore the Respondent should not have been given indulgence or allowed to agitate the issue relating to the second round of e-auction.
The Learned Counsel for Appellant has argued that in the situation as explained in detail by him, the ad-interim stay granted through Impugned order dated 28.2.2022 and the extension of ad-interim stay vide the second Impugned Order dated 22.3.2022 is not legal since there is a clear stipulation in the terms and conditions regarding the time permitted to deposit the full sale consideration amount and resorting to Rule 11 of the NCLT Rules in granting ad-interim stay is not proper.
In reply, the Learned Counsel for Respondent Pavan Enterprises has claimed that he is the only successful bidder after three rounds of e-auction of ‘the property’ and since he has already paid approximately Rs. 99 lakhs as part of the total bid amount, he should be given extension of time to deposit the balance of sale consideration. He has referred to the difficulties he faced in obtaining financing from the banks due to various reasons and said that the liquidator ought to have given him extension of time as per Clause 12 of the Schedule I of Liquidation Process Regulations which was not done, thereby denying him permissible full opportunity and time to deposit the balance consideration, and moreover the Liquidator is not bound by the advice of Stakeholders Consultation Committee and has full and independent authority to give extension of time to the Respondent for depositing the balance sale consideration.
The Learned Counsel for Respondent has argued that since he has already paid substantial amount against the sale consideration, he is willing to deposit the balance amount and in view of his willingness he had approached the Adjudicating Authority by filing IA No. 868 of 2022 and in the interest of justice, the Adjudicating Authority has granted ad-interim stay to the process of fresh e-auction. He has, thus claimed that the said stay is in the interest of justice and for protecting his rights and therefore, there is no error in the order dated 28.2.2022 and later in the order dated 22.3.2022 which has only extended the stay order, passed in IA No. 868 of 2021 and IA No. 485 of 2022.
We note that the first round of e-auction took place in December, 2020 and Pavan Enterprises was adjudged as the successful bidder and that since Pavan Enterprises was unable to deposit the requisite amount within stipulated time period, he sought an extension of time from the Liquidator, which was granted by the liquidator vide e-mail dated 16.12.2020 (attached at page 41 of the appeal paperbook in CA No. 514 of 2022). We find that thus Pavan Enterprises was given a total of 15+75= 90 days for the payment of balance amount, which was as per his request through letter dated 16.12.2022 (attached at pg. 42 of the appeal paperbook in CA No. 514 of 2022). We also note that the Liquidator cancelled the sale offer and forfeited the CMD deposited by Pavan Enterprises, when the successful bidder Pavan Enterprises could not deposit the balance consideration in the given time.. Quite clearly these actions of the Liquidator were in accordance with the Liquidation Process Regulations and the provisions in the Terms and Conditions of the e-auction document.
Admittedly, the second round of e-auction took place on 19.3.2021 and the sale confirmation letter was issued to the Respondent Pavan Enterprises on 22.3.2021 as he was the successful bidder. The terms and conditions of the e-auction specified that the successful bidder has to deposit the bid amount and complete the transaction within 15 days following the confirmation date of e-auction. Thus, this period of 15 days were to get over on 6.4.2021, but in the meantime the Respondent sought an extension of 15 days vide letter dated 2.4.2021 (attached at page 62 of the appeal paperbook in CA 513 of 2022) which he was given, and thus he was asked to make complete payment on or before 21.4.2021. It is admitted that the Respondent paid Rs. 75 lakhs on 6.4.2021, but did not deposit the remaining bid amount by 21.4.2021, and his request for further extension of deadline to deposit the remaining amount of sale consideration was rejected by the liquidator vide letter dated 16.4.2021. The liquidator cancelled the e-auction sale of 23.4.2021 and forfeited the CMD deposited by the Respondent Pavan Enterprises on the ground that he had failed to deposit the complete bid amount by 21.4.2021 and the offer stood cancelled.
It is a fact that the terms and conditions of e-auction, (attached at pp. 49-60 of the appeal paperbook in CA No. 513 of 2022) stipulated in clause 3.6 that the balance purchase price will be paid within 15 calendar days following the date of confirmation of e-auction and clause 4.1 provided that if the purchaser fails to pay the balance payment, the liquidator at its sole discretion could extend the period by 15 days. The liquidator, in keeping with the situation and the terms and conditions of the second e-auction, gave a total of 30 days’ time to Pavan Enterprises to deposit the bid amount, but he failed to do so. It is a fact that Pavan Enterprises participated in the e-auction based on the terms and conditions for e-auction of ‘the property’ without any condition and thus bound himself to the various clauses of terms and conditions of e-auction, particularly the time period stipulated therein for depositing the balance purchase price. Moreover, in the order of the Adjudicating Authority dated 16.3.2021 given in IA No. 468 of 2021 (attached at pp. 13-14 of Respondent’s reply, Dy. No. 36975 dated 4.7.2022), it was made clear that no further indulgence shall be granted to Pavan Enterprises.
This order of NCLT was not challenged and has therefore achieved finality insofar as the participation of Pavan Enterprises in the second round of e-auction is concerned, and also with respect to any time extension for depositing the balance amount. Thus, it is clear that Pavan Enterprises participated in the second e-auction and availed the benefit of a full 30 days’ time for payment of balance purchase consideration, but he failed to deposit the requisite amount within the time period granted as per the ‘Terms and Conditions’ in the e-auction document. Further in view of the fact that the order dated 16.3.2021 has achieved finality, we are of the opinion that the Respondent is precluded from raising issues that were part of this order again.
Thus, the Respondent had committed himself to make complete payment on or before 21.4.2021 which was in consonance with the admitted ‘Terms and Conditions’ of the e-auction and that the order dated 16.3.2021 in IA No. 468/2021 was binding on the parties including the Respondent. The relevant portion of the order dated 16.3.2021 is as follows:-
“….It is submitted by the Applicant that the Applicant wants a direction from this Bench for acceptance of the balance amount (of the previous auction) as on 27.03.2020. The proposed auction is slated to be held on 19th March, 2021. In the circumstances, since further action has already been taken, we are not inclined to allow the present Application. However, we permit the Applicant to take part in the fresh auction process. The EMD already in deposit for the previous auction dated 2nd December 2020 may be taken towards the EMD of the present auction and the balance amount shall stand forfeited. The EMD shall abide by the terms and conditions of the present bid document. No further indulgence shall be given to the Applicant in this connection. In case, the Applicant fails to secure the auction, then the EMD amount shall stand forfeited irrespective of the terms and conditions of the present bid. We make it clear that the present order shall not be taken as a precedent in any other matter including any action that may be undertaken in the present matter. There will be no further relaxation in respect of the time line as far as Applicant is concerned in depositing the balance consideration amount of the auction in case of it being successful in the current bid process.”
(Emphasis Supplied)
It is clear from the above-cited order that no relaxation in respect of time-line would be provided to the successful bidder in the second round of e-auction. Since this order had achieved finality as it had not been appealed against or modified, Pavan Enterprises could not have been given extension of time-line to what was provided in the e-auction document. Moreover, Pavan Enterprises who was the successful bidder in the second e-auction, had committed itself to making full payment by 21.4.2021 and therefore to engage in litigation through IA no. 868/2022 and IA no. 485.2021 was highly improper on the part of Respondent, and obtaining the order of ad-interim stay dated 28.2.2022 when it was precluded from doing so was clearly abuse of the judicial process. We also note that the Respondent approached Hon’ble High Court at Bombay to seek extra time of 45 days to deposit the balance consideration, which was not acceded to, and the petitioner was given liberty to move the NCLT for hearing of its Interlocutory Application.
We also take note of the fact that the Respondent experienced difficulty in depositing the balance of sale consideration after the first round of e-auction and could not deposit the requisite amount after committing itself to doing so. We also note that after making an offer to Survival Technologies in the second round of e-auction, due to delay in getting possession of the said property caused to protracted litigation by Pavan Enterprises. Survival Technologies sought cancellation of the e-auction sale after having made payment of Rs. 2.77 crores, and sought refund of the deposited amount. The delay in auctioning the said Ratnagiri property was to the detriment of the creditors of the corporate debtor.
We note that the Respondent sent a post-dated cheque dated 27.3.2021 drawn on Canara Bank for payment of Rs. 2.24 crores to the Liquidator. We feel that this payment could have been made either through electronic online transfer in the account of the Corporate Debtor/Liquidator or through a demand draft if Pavan Enterprises was serious about making the balance payment and making payment through a post-dated cheque cannot be taken as showing his sincerity and seriousness in making the payment. The Appellant’s contention that it made enquiry from Canara Bank and discovered that Pavan Enterprises had a meagre amount of Rs. 500 in its account is also not rebutted by the Respondent. Further after Appellant returned the said cheque dated 27.3.2021 drawn on Canara Bank to the Respondent we do not find that the Respondent made any sincere effort again to transfer/transmit the requisite amount to the Appellant. All these events show the casual approach of Pavan Enterprises in making the said payment.
We follow the judgment of Hon’ble Apex Court in the matter of Kridhan Infrastructure Pvt. Ltd. vs. Venkatesan Sankarnarayan & Ors. (2021) 6 SCC 94 cited by the Learned Counsel for Appellant wherein the resolution process under IBC is held to be a time-bound process. The relevant portion of the judgment is reproduced below:
“11.The appellant has been unable to raise the funds. The fact of the matter, as its merges from Mr Vishwanathan’s submissions, is that the appellant will be unable to raise funds from the Term Lenders who are insisting that the status of the Company should change from a company under liquidation to an active status. The order of liquidation has not been set aside. Ultimately, what the request of the appellant reduces itself to, is that it would raise funds on a mortgage of the assets of the Company and unless the Company is brought out of liquidation, it would not be in a position to raise the funds. This is unacceptable. At this stage, the order of liquidation has only been stayed, but a final view was, thus, to be taken by this Court. Sufficient opportunities were granted to the appellant earlier during the pendency of the proceedings both before the NCLT and NCLAT. The orders of the NCLT and NCLAT make it abundantly clear that despite the grant of sufficient time, the appellant has not been able to comply with the terms of the Resolution Plan. Since 9 October 2020, despite the passage of almost five months, the appellant has not been able to deposit an amount of Rs 50 crores. Time is a crucial facet of the scheme under the IBC.8 To allow such proceedings to lapse into an indefinite delay will plainly defeat the object of the statute. A good faith effort to resolve a corporate insolvency is a preferred course. However a resolution applicant must be fair in its dealings as well. The appellant has failed to abide by its obligations. In that view of the matter, we see no reason or justification to entertain the Civil Appeal any further. The consequence envisaged under the order of this Court shall accordingly ensue in terms of the forfeiture of the amount of Rs 20 crores. As a consequence of this order, the management shall revert to the liquidator for taking steps in accordance with law. The Civil Appeal is accordingly dismissed.”
The Respondent has referred to clause 12 of Schedule 1 under Regulation 33 of the Liquidation Process Regulations to claim that the Respondent should have been provided a full time period of 90 days from the date of confirmation of e-auction to provide the balance sale consideration, but it was not done so, and on this basis, he sought and was granted ad-interim stay to the 3rd round of e-auction by the Adjudicating Authority vide Impugned Order dated 28.2.2022. In view of the fact that the Respondent had not raised any objection or denied about the “Terms and Conditions” of the second e-auction and the time period for depositing balance amount contained therein before the conduct of e-auction, and also that the Respondent had raised this issue in his IA No. 468/2021 and did not get desired relief, we are of the opinion that the Liquidator did not commit any error in not giving 90 days’ time to the Respondent for depositing the balance amount.
In view of the order dated 16.3.2021 passed by the Adjudicating Authority which had achieved finality and also the Terms and Conditions of the second round of e-auction process, we are of the opinion that the Respondent caused a serious obstruction in the sale of ‘the property’ by preferring an application to obtain stay order to the third round of e-auction through order dated 28.2.2022 which was granted. While it is quite probable that the Adjudicating Authority may not have had the benefit of the knowledge of the order dated 16.3.2021, on appreciation of the full facts of the case, we are of the opinion that the order dated 28.2.2022 and 22.3.2022, which granted ad-interim stay to the third round of e-auction process and further extended it, be set aside to allow the sale of the said property to take place promptly and the liquidation process is brought to fruitful culmination at the earliest, as required under the IBC and in keeping with the ultimate objective of completing liquidation in a time-bound manner. We, therefore, set aside the impugned orders dated 28.2.2022 and 22.3.2022 and direct that the liquidator shall proceed with the sale of the assets of Ratnagiri property of the corporate debtor, if it has not already done so.
In view of the facts of the case and the conduct of the Respondent in obstructing the process of liquidation, particularly the e–auction of ‘the property’ despite it being fully aware of the order dated 16.3.2021 in IA No.468 of 2021, we are of the opinion that the Respondent has clearly abused the process of law to gain undue advantage and thereby caused a delay in the culmination of the liquidation process. Our opinion is strengthened by the fact that the first round of e-auction took place in December, 2020 and further rounds of e-auction of the same property went on till March, 2022, which is lapse of a considerable period of time. We also note that the Hon’ble Apex Court in the matter of Kridhan Infrastructure (supra) has also acknowledged that timely completion of the insolvency and liquidation process is the main objective of IBC and should be completed in a time-bound manner as required and stipulated under the IBC.
In view of the situation and the conduct of the Respondent as discussed in detail above, we are of the view that a fine of Rs. One Lakh should be imposed on the Respondent for abusing the process of law thereby causing delay in the liquidation process, and seeking to subvert the basic objective of IBC. This fine shall be deposited in Prime Minister’s Relief Fund within 30 days of this order. We also direct that the respondent shall pay to the Liquidator an amount of Rs. One lakh as litigation costs incurred by the liquidator in protracted litigation thereby causing reduction in the total corpus of liquidated estate. This amount which would eventually be added to the total corpus of liquidation estate thereby taking care of the interest of the creditors.
With the above-stated directions, we dispose of the appeal.