NCLAT upheld AA’s order directing appellant to pay sum as a security deposit towards e-auctioned property

Case details: Dhan Prakash Gupta v. Daehsan Trading India (P.) Ltd. - [2021] 128 taxmann.com 328 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Anant Bijay Singh | Judicial Member and MS. Shreesha Merla | Technical Member.
  • Ms. Ekta Choudhary, Adv. for the Appellant.
  • Anant A. Pavgi, (Caveator) and Ms. R.V. Yajura, (Caveator) for the Respondent.

Facts of the Case

The liquidator of the corporate debtor conducted an auction of the corporate debtor’s property and the Appellant was declared as a successful bidder as per terms of the process memorandum. Thereafter, the Letter of intent was also issued.

However, the Draft Letter of intent and Process Memorandum clearly stipulated that an amount of Rs. 6 Lakhs towards Maintenance Security Deposit (MSD) was to be paid and would be a part of the asset of the successful bidder.

Thus, the appellant was in knowledge of additional Rs. 6 lakhs to be paid towards Maintenance Security Deposit (MSD), prior to acceptance of the Letter of intent.

NCLAT Held

The NCLAT stated the fact that the additional amount of Rs. 6 Lakhs payable towards MSD was not negotiable, and also admittedly brought to the notice of the appellant before signing of draft Letter of intent.

Since, the appellant having exercised their choice of being a successful bidder, the Adjudicating Authority rightly directed the appellant to pay Rs. 6 lakhs towards MSD in respect of property which was e-Auctioned by liquidator.

Case Review

• • Dhan Prakash Gupta v. Daehsan Trading India (P.) Ltd. [2021] 128 taxmann.com 327 (para 11) (NCLT – Chennai) affirmed [See Annex].