Case Note & Summary
The dispute arose from an insolvency petition filed by Syndicate Steel Traders against VGA Developers Pvt. Ltd., which led to the admission of the petition on 06.01.2020. Following the failure to receive a resolution plan, the learned Adjudicating Authority ordered liquidation on 01.09.2021, appointing Mr. Aishwarya Mohan Gahrana as Liquidator. The Liquidator attempted to sell a residential plot through e-auction, but the auction failed. The appellant offered to purchase the property for Rs. 34.91 Crores, which was accepted by the Stakeholders Consultation Committee on 12.07.2022. The Letter of Intent required the appellant to make the balance payment within 90 days, with interest applicable on late payments. The appellant failed to comply with this requirement, leading to an extension of the liquidation period on 16.06.2023. Subsequently, the appellant challenged the interest levied on the outstanding amount. The Liquidator requested payment by 05.08.2023, but no payment was made. The learned Adjudicating Authority found that the appellant did not comply with the Liquidator's directions, resulting in the dismissal of the appeal and a directive for a fresh auction of the property. The court noted the substantial increase in the property's value and found no infirmity in the impugned order. The appeal was dismissed, and pending applications were also disposed of. The release of the advance amount was challenged by the Liquidator, which remains under consideration in a separate appeal.
Headnote
A) Insolvency Law - Liquidation Proceedings - Compliance with Payment Terms - Insolvency and Bankruptcy Code, 2016, Section 30 - The appellant failed to make the balance payment within the stipulated time as per the Letter of Intent, leading to the dismissal of the appeal and direction for fresh auction. Held that non-compliance with the Liquidator's directions justified the learned Adjudicating Authority's decision (Paras 7-8).
Issue of Consideration
Whether the appellant complied with the payment terms as per the Letter of Intent and the implications of non-compliance.
Final Decision
The appeal was dismissed, and the learned Adjudicating Authority's order was upheld, directing the Liquidator to conduct a fresh auction of the property and refund the advance amount of Rs. 3.49 Crores within seven days.
Law Points
- Insolvency proceedings
- Liquidation
- Sale consideration
- Letter of Intent
- Interest on delayed payment
