Reliefs Sought Too Wide and General: NCLAT Rejects Excessive Reliefs Sought By Successful Bidder And Upholds NCLT Order [Read Order]

The National Company Law Appellate Tribunal(NCLAT), Principal Bench, New Delhi, dismissed the appeal filed by a successful bidder seeking additional reliefs and concessions beyond those granted by the National Company Law Tribunal (NCLT), Mumbai Bench, in relation to the acquisition of a corporate debtor under liquidation.

The appellant, Shanti International, challenged the order passed by the NCLT, Mumbai, whereby while several reliefs were granted, certain reliefs and concessions claimed by the appellant were denied.

Gajanan Solvex Limited is a corporate debtor, had entered liquidation pursuant to Corporate Insolvency Resolution Process (CIRP) initiated under Section 7 of the Insolvency and Bankruptcy Code, 2016.

The appellant was the successful bidder in the e-auction conducted on a “as is where is basis”, “as is what is basis” and “no recourse basis” and was issued a sale certificate upon payment of the full consideration.

The appellant filed an application before the NCLT seeking various reliefs and concessions to facilitate smooth takeover and operation of the corporate debtor as a going concern. The NCLT granted several reliefs necessary for continuation of business but denied certain reliefs and directed the appellant to approach the concerned authorities.

Anjali Sharma, the counsel for the appellant, contended that the Adjudicating Authority failed to grant several essential reliefs and concessions which were necessary for effective implementation of the acquisition.

It was also contended by the appellant counsel that similar reliefs had been granted in earlier decisions in case of Liquidator of Venus Rolling Mills Pvt. Ltd. Vs. Shantech Intemational Pvt. Lrd., (2024) and therefore denial of such reliefs in the present case was unjustified.

Ashok Bhushan, Chairperson and Arun Baroka, Technical Member observed that the appellant had participated in the auction on an “as is where is basis”, and therefore could not claim blanket reliefs from statutory liabilities and compliances.

The Tribunal noted that the reliefs sought, particularly those under certain items, were extremely wide, general and beyond the scope of permissible reliefs, covering multiple statutory authorities and seeking waivers of various legal obligations.

The Tribunal further held that merely being a successful bidder does not entitle the appellant to claim all conceivable exemptions or concessions. It was observed that the NCLT had already granted substantial reliefs enabling the appellant to run the corporate debtor as a going concern, and there was no error in directing the appellant to approach appropriate authorities for other reliefs.

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