LexV.S. PALANIVEL versus P. SRIRAM, CS, LIQUIDATOR, ETC.
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[2024] 8 S.C.R. 1263 : 2024 INSC 659 V.S. Palanivel v. P. Sriram, CS, Liquidator, Etc. (Civil Appeal Nos. 9059-9061 of 2022) 28 August 2024 [Hima Kohli* and Ahsanuddin Amanullah, JJ.] Issue for Consideration (i) Whether the Tribunal was right in accepting the view taken by the Adjudicating Authority that Covid-19 lockdown was a valid reason for extension of time to deposit the balance sale consideration; (ii) Whether the appellant was justified in alleging that the subject property was under-valued; (iii) Whether it was incumbent for the Liquidator to constitute a Stakeholders’ Consultation Committee; (iv) Whether Liquidator had violated Regulation 33 of the IBBI Regulations, 2016; (v) What is the import of the order of attachment issued by the Income Tax Authorities in respect of the auctioned property. Headnotes† Insolvency and Bankruptcy Code, 2016 – Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 – Regulation 47A – Whether the Tribunal was right in accepting the view taken by the Adjudicating Authority that Covid-19 lockdown was a valid reason for extension of time to deposit the balance sale consideration: Held: The Notice for sale of assets issued by the Liquidator for conducting the e-auction of the land and building owned by the Corporate Debtor that declared the reserve price of the subject property as ₹29,55,96,375/- – The e-auction of the subject property took place on 23.12.2019 – Going by the Notice for sale issued by the Liquidator, the period of 90 days available to the Auction Purchaser to deposit the balance sale consideration, if reckoned from 24.12.2019, the date when the Liquidator informed that it was the successful bidder, would have expired on 23.03.2020 – However, the Letter of Intent issued by the Liquidator on 24.12.2019, was received by the Auction Purchaser on 26.12.2019 – The period of 90 days reckoned from 26.12.2019 would have expired on * Author 1264 [2024] 8 S.C.R. Digital Supreme Court Reports 25.03.2020 – Admittedly, the balance sale consideration was not paid by the Auction Purchaser within the aforesaid timeline – The said amount was deposited by the Auction Purchaser through RTGS only on 24.08.2020 – The Supreme Court in a Sou Motu writ petition took cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 virus and extended limitation w.e.f 15.03.2020 – The Auction Purchaser has also invoked Regulation 47A of the IBBI Regulations, 2016 – The submission made on behalf of the appellant that the word ‘Litigants’ used in the order dated 23.03.2020 passed in the Suo Moto Writ Petition ought to be given a narrow interpretation so as to exclude a party like the Auction Purchaser herein as stricto sensu, cannot be accepted – The appellant cannot be heard to state that when the entire country was engulfed by the Covid-19 pandemic and a countrywide lockdown was imposed on 25.03.2020 that was extended from time to time, the Auction Purchaser ought to have deposited the balance sale consideration within the stipulated 90 days – In such a situation, a lenient view would have to be taken by the Court – In the present case, as noticed, the period of 90 days for depositing the balance sale consideration had expired just after the crucial date, i.e., 23.03.2020 – There is no merit in the submission made by the appellant that the Tribunal ought not to have accepted the view taken by the Adjudicating Authority that Covid-19 lockdown was a valid reason for extension of time to deposit the balance sale consideration. [Paras 32.2, 32.3, 32.5, 32.6, 32.12] Insolvency and Bankruptcy Code, 2016 – Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 – Whether the appellant was justified in alleging that the subject property was under-valued: Held: If the appellant was so confident that the subject property would have fetched a much higher price, nothing precluded him from identifying a bidder who was willing to offer a better price – In fact, such a suggestion was made by the Liquidator in his reply dated 15.11.2019 to the objection taken by the appellant to the estimated value of the subject property in his letter dated 08.11.2019 – Again, the Liquidator wrote a letter dated 27.11.2019 to the appellant suggesting that ask eligible parties willing to offer a better price to participate in the auction process – The appellant did not f
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