Krihaan Texchem Private Limited vs Upl Limited & Ors

IN THE MATTER OF: Krihaan Texchem Private Limited (M/s. Reid & Taylor International Pvt. Ltd. after change of name as of 21.01.2025) through its authorized signatory, Mr. Ajay Agarwal having its registered office at: 602, Boston House, Suren Road, Andheri East, Mumbai - 400093 ...Appellant

Versus

1. UPL Limited Having it registered office at: 3-11, G.I.D.C., Vapi, District Valsad Gujarat - 396195 ...Respondent No.1

2. Mr. Om Prakash Agarwal Liquidator of S. Kumars Nationwide Limited with its Office at: B2, 5th Floor Marathon Nextgen, Off G.K. Marg Worli, Lower Parel (West), Mumbai - 400013 ...Respondent No.2

Present:

For Appellant : Mr. Krishnendu Datta, Sr. Advocate with Ms. Priyanka Vora, Advocates

For Respondent : Mr. Nand Kishor, Advocate for R-1 Mr. Rohan Agrawal, Ms. Nishtha Jindal, Advocates for R-2

With Company Appeal (AT) (Insolvency) No. 1106 of 2025 IN THE MATTER OF: UPL Limited A Company incorporated under the Companies Act, 1956 Having its registered office at: UPL House, 610B / 2 Bandra Village Off Western Express Highway, Bandra (E), Mumbai 400051 ...Appellant

Versus

Om Prakash Agrawal Liquidator of S Kumar Nationwide Ltd. Having his office address at: B2, 5th Floor, Marathon NextGen Off G.K. Marg, Lower Parel, Mumbai-400013 ...Respondent

Present:

For Appellant : Mr. Nand Kishor, Advocate

For Respondent : Mr. Rohan Agrawal and Ms. Nishtha Jindal, Advocates for R-2

JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)] The present Appeal is filed under Section 61 of the Insolvency and

Bankruptcy Code, 2016, (the "Code") against the order dated 02.05.2025

passed by the Ld. Adjudicating Authority, the Hon'ble National Company Law

Tribunal, Mumbai, Bench-III-in IA-1189 of 2021 in IA No.847 of 2021 in CP

No. 294 of 2018 ("Impugned Order"). By way of the Impugned Order, the Ld.

NCLT has set aside the E-auction Notice dated 30.03.2021 and E-auction

conducted on 16.04.2021 in which the Appellant had emerged the successful

bidder for purchase of land parcel. It further directed the Liquidator to

conduct fresh E-auction and refund 10% deposit made by the Appellant

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 2 of 28 towards Sale Consideration of the land parcel thereby vitiating the E-auction

conducted following due procedure.

2. We note that the Adjudicating Authority, considering the higher

purchase price offered by Respondent No. 1 ("R1"), inter alia directed

Respondent No. 2 ("R2") - Liquidator [in first Company Appeal (AT) (Ins.) No.

811 of 2025] as the base price to conduct a fresh auction for sale of additional

land earlier awarded to Appellant - Krihaan Texchem Private Limited.

3. It is the contention of the Respondent No. 1 that the Appellant has no

locus to file the present appeal. It is the Learned NCLT, who has found the

liquidator to have not properly conducted the e-auction and consequently had

set it aside and had thereby partly allowed the I.A. 847 of 2021, which was

filed by Respondent No.1 - UPL. It is further claimed by the Respondent that

in I.A. No. 1189 of 2021 the Appellant did not seek any relief to direct the

Respondent No. 2 - Liquidator, to convey the title of the additional land to the

Appellant. Thus, the Appellant cannot be allowed to seek any relief beyond

the relief sought in I.A. No. 1189 of 2021, that is to direct Respondent No. 2

to issue a sale certificate for the additional land or to register the sale of

additional land in favor of the Appellant.

4. Respondent No. 1 further claims that the learned NCLT has failed to

appreciate that the additional land formed part of lot 2 asset, which was

auctioned and sold in the earlier auction to R 1-UPL. Hence Adjudicating

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 3 of 28 Authority erred in directing Respondent No. 2 - Liquidator to conduct fresh

auction.

5. We have heard the Counsels of both sides and also perused the material

placed on record.

6. This is a challenge to the order of the Adjudicating Authority dated

02.05.2025 vide which the Adjudicating Authority has directed for a fresh

auction of the liquidation estate of the Corporate Debtor namely M/s S.

Kumars Nationwide Limited, Jhagadia Industrial Estate. It is worthwhile to

note that the relevant portion of the impugned order, which is extracted as

below:

"70. Since we have directed for a fresh auction, the Liquidator is directed to refund the amount deposited by Krihaan Texchem in pursuance of the auction held on 16.04.2021 within a period of 60 days. Needless to say, both UPL and Krihaan Texchem are at liberty to participate in the fresh auction."

7. We note that both UPL Limited and Krihaan Texchem Private Limited

have filed separate appeals and they have been taken up together in this

order.

8. UPL Limited has filed CA (AT)(Ins.) No. 1106/2025 in which they have

challenged the impugned order and want the setting aside of the impugned

order and also want a direction to the liquidator to sell / transfer the

additional land of about 12,981.64 sq. mts. to the Appellant on payment of

differential consideration as per the reliefs sought as below:

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 4 of 28 "(a) Pass an order setting aside that portion of the Impugned Order dated 02.05.2025 passed by the Ld. NCLT in L.A. No. 847/2021 in CP(IB) No. 294/MB/C-11/2018 titled UPL Limited v Om Prakash Agarwal, wherein the Ld. NCLT has directed the Respondent to conduct fresh auction of the Additional Land being land with sub-division No. 825/3 admeasuring 12,981.64 sq. mt.;

(b) Pass an order directing the Respondent to sell / transfer the Additional Land being land with sub-division No. 825/3 admeasuring 12,981.64 sq. mt., as indicated in the map at Annexure-15, supra, to the Appellant on payment of differential consideration at the rate at which the entire Lot 2 Asset was sold to the Appellant which comes to INR.2,86,24,516 (Rupees Two Crore Eighty Six Lakh Twenty Four Thousand Five Hundred Sixteen Only);

(c) Pass any other and further order as this Hon'ble Appellate Tribunal may deem fit in the facts and present circumstance of the case."

9. On the other hand, the Appellant in the related case i.e. Krihaan

Texchem Private Limited in CA (AT) (Ins.) No. 811 of 2025 has also challenged

the impugned order and prays that the impugned order dated 02.05.2025 be

set aside and the liquidator i.e. Respondent No.2 be directed to issue sale

certificate for Plot No. 825/3 admeasuring 12,981.64 sq. mts. located in

Jhagadia GIDC, Village Bharuch, Dadheda, Jhagadia Taluka, Gujarat in

favour and also direct Respondent No.2 i.e. Liquidator to register the sale of

plot in the name of Appellant. The Appellant has also prayed that alternatively

the liquidator be directed to pay interest @ 12% on ₹74,80,000/- deposited

with the liquidator from the date of payment by the Appellant until date of

refund by the Liquidator. The prayers are extracted as below:

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 5 of 28

a) Allow the present appeal and set aside the Order 02.05.2025 passed by the Ld. Adjudicating Authority, the Hon'ble National Company Law Tribunal, Mumbai, Bench-III in IA No. 1189 of 2021 in IA No. 847 of 2021 in CP No. 294 of 2018;

b) Direct Respondent No.2 to issue sale certificate for Plot No. 825/3 admeasuring 12,981.64 sq. mts. located in Jhagadia GIDC, Village Bharuch, Dadheda, Jhagadia Taluka, Gujarat in favour of the Appellant;

c) Direct Respondent No.2 to register the sale of Plot No. 825/3 admeasuring 12,981.64 sq. mts. located in Jhagadia GIDC, Village Bharuch, Dadheda, Jhagadia Taluka, Gujarat in favour of the Appellant;

d) Pending the hearing and disposal of this appeal, grant an order of interim stay of the Impugned Order;

e) Interim and Ad-interim relief in terms of prayer clause a), b) and c);

f) Alternatively, direct the Liquidator to pay interest @12% p.a. on Rs.

74,80,000/- deposited with the Liquidator from date of payment by the Appellant until date of refund by the Liquidator;

g) Pass any other or further order(s) as this Hon'ble Tribunal deems fit and proper as per the facts and circumstances of this present Appeal and in the interest of justice.

10. Perusal of material placed on record shows that the Corporate Debtor

was having a leased land at Plot No. 825 alongwith adjoining cart track land

admeasuring 2,85,765.85 sq. mt. situated at Jhagadia Industrial Estate,

Bharuch, Gujarat for a period of 99 years.

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 6 of 28

11. The Corporate Debtor went into liquidation and in the process,

liquidator issued the E-auction notice on 12.12.2019 and the sale of assets

was proposed to be held in two lots as described below:

"Lot 1 comprising of part of Plot No.825 at Jhagadia Industrial Estate admeasuring 1,70,133 sq. mtrs. along with building, plant and machinery etc. for a reserve price of Rs.201.80 crores.

Lot 2 comprising of part of Plot No.825 at Jhagadia Industrial Estate admeasuring 1,15,632 sq. mtrs. (subject to sub-division) and freehold land at Survey Nos. 67, 73, 74, 4A and 4B at Jhagadia, Bharuch, admeasuring 81,326 sq. mtrs. The Lot 2 was proposed to be sold at a reserved price of Rs.28.43 crores, which was a combined reserved price for the leasehold land and the freehold land."

12. On 16.01.2020, E-auction was held and M/s UPL Limited which is the

Appellant in second Appeal emerged as the highest and successful bidder for

the sale of assets comprised in Lot 2 at a bid price of ₹43.43 Cr. Subsequently

on 18.01.2020 the Liquidator issued the Letter of Intent to M/s UPL Limited

in relation to sale of assets comprised in Lot 2. It is to be noted that the lease

hold land i.e. 1,15,632 sq. mt. which was part of Plot No. 825 was sold subject

to sub-division of the entire plot which was to be done by the lesser i.e. GIDC.

13. Subsequently, on 07.02.2020 the Liquidator addressed an email to M/s

UPL Limited that during the exercise of sub-division done by GIDC for the plot

No. 825 there was additional area available for sale. On pointed query as to

why such an email was issued by the liquidator to the M/s UPL Limited, it

was brought to our notice that these letters stated that it shall not constitute

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 7 of 28 an offer for sale and shall neither form the basis of any contract. The relevant

portion of the email dated 07.02.2020 issued by the Liquidator is extracted

as below:

And the letter issued by the liquidator is extracted as below:

"This is in reference with sale of part of Plot no. 825 of Jhagadia GIDC, Bharuch in the village Dadheda, Jhagadia Taluka, Bharuch District, Gujarat having a total land area of 1,15,632 sq. mt.

Based on the survey conducted by GIDC approved surveyor, it has come to the notice that part of Plot no. 825 of Jhagadia GIDC, Bharuch in the village Dadheda, Jhagadia Taluka, Bharuch District, Gujarat has a total land area of 1,28,614 sq. mt. Therefore, in the said plot an overall land area of 12,982 sq. mt. is additional. However, the same is subject to Survey Report and Sub-Division Certificate to be received from the GIDC.

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 8 of 28 In light of the above, we request you to provide your consent in principle for purchase of the additional land admeasuring 12,982 sq. mt. at the same rate for which land area of 1,15,632 sq. mt. was purchased by you in E- Auction conducted on January 16, 2020.

Please note that the said letter does not constitute an offer for sale and the information contained. herein shall not form the basis of any contract."

14. Later, on June 2020, the Liquidator filed an IA No. 1116/2020 interalia

seeking concessions in respect of the sub-division by the GIDC. In this

application, the Liquidator interalia mentioned the plans for private sale to

UPL Limited also. The issues with respect to GIDC were settled and the IA was

withdrawn on 20.06.2020 with a liberty to file a fresh application, if any, in

respect of other issues. Liquidator brings to our notice that this was in line

with Regulation 33 of the Liquidation Regulations, 2016 under which auction

is the norm and private sale is an exception. The relevant Regulation 33 was

brought to our notice which is extracted as below:

"Regulation 33: Mode of sale.

33. (1) The liquidator shall ordinarily sell the assets of the corporate debtor through an auction in the manner specified in Schedule I. (2) The liquidator may sell the assets of the corporate debtor by means of ¹[private sale only after prior consultation with the consultation committee under regulation 31A, in the manner specified in Schedule I when]-

(a) the asset is perishable;

(b) the asset is likely to deteriorate in value significantly if not sold immediately; 2[or]

(c) 3[***]

(d) the prior permission of the Adjudicating Authority has been obtained for such sale:

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 9 of 28 Provided that the liquidator shall not sell the assets, without prior permission of the Adjudicating Authority, by way of private sale to-

(a) a related party of the corporate debtor;

(b) his related party; or

(c) any professional appointed by him.

(3) The liquidator shall not proceed with the sale of an asset if he has reason to believe that there is any collusion between the buyers, or the corporate debtor's related parties and buyers, or the creditors and the buyer, and shall submit a report to the Adjudicating Authority in this regard, seeking appropriate orders against the colluding parties."

15. On 29.06.2020 the liquidator issued the certificate of sale in favour of

UPL Limited ineralia confirming the sale of the assets comprised in Lot No. 2.

The certificate of sale clearly indicates that 1,15,632 sq. mt. of lease hold land

being part of Plot No. 825 together with the cart track land was sold to UPL

Limited. Furthermore, invoices dated 03.12.2020 were issued to UPL Limited

for leasehold rights in plot No.825/2 admeasuring 1,12,742.20 sq. mt. and

cart track land attached plot 825/2 admeasuring 2889.8 sq. mt. aggregating

to 1,15,632 sq.mt. Furthermore, invoice dated 03.12.2020 was also issued to

UPL Limited for GIDC sub-division fees towards Plot No. 825/2.

16. Later on 10.02.2021 a deed of assignment was also signed between the

Corporate Debtor through the liquidator and UPL Limited whereby interalia

leasehold rights in respect of Lot No. 2 i.e. admeasuring 112742.2 sq. mt. with

cart track land admeasuring 2788.5 sq.mt. were assigned and transferred in

favour of UPL Limited. This was also confirmed by the office order issued by

GIDC confirming the assignment and transfer of the UPL Limited.

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 10 of 28

17. Later, on 01.05.2020 GIDC issued a provisional sub-division of plot No.

825 into 3 parts and which was later confirmed in a final order dated

15.12.2020 by which sub-division was noted as follows:

"Final order passed by the GIDC whereby Plot No. 825 was sub-divided as under:

(i) Plot No. 825/1 admeasuring 158,541.89 sq.mtrs.

(ii) Plot No. 825/2 admeasuring 112,742.20 sq.mtrs.

(iii) Plot No. 825/3 admeasuring 12,981.64.89 sq.mtrs. This sub-

divided Plot No.825/3 is the additional land as surveyed ("Additional Land")"

18. The real dispute started when the liquidator issued an E-auction notice

for additional land on 30.03.2021 for a reserved price of Rs.2.9 crores which

was to be conducted on 16.04.2021. The Appellant herein i.e. UPL Limited

filed an IA No. 847/2021 on 05.04.2021 before the Adjudicating Authority

interalia seeking declaration that the E-auction sale notice dated 30.03.2021

for the sale of the said additional land is untenable and seeking declaration

that UPL Limited is the successful bidder in respect of the said additional

land. The Appellant i.e. UPL Limited further sought an order and direction

against the Liquidator to sell the said additional land at the same rate at

which it had purchased part of Plot No. 825 admeasuring 1,15,632 sq. mt.

19. In the meantime, UPL Limited also participated in the E-auction and

sent a conditional Expression of Interest (EoI) to participate in the E-auction

proposed to be held on 16.04.2021. The Appellant i.e. UPL Limited stated that

since they had challenged the E-auction Notice dated 30.03.2021 in IA No.

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 11 of 28 847/2021 before the Adjudicating Authority, therefore, their participation in

the E-auction would be without prejudice to their right and contentions.

20. Immediately thereafter the Liquidator responded on 14.04.2021 and

conveyed to UPL Limited that a conditional expression of interest is beyond

the terms and conditions of the E-auction sale and therefore not acceptable.

Consequently, UPL's expression of interest dated 12.04.2021 was rejected.

21. UPL Limited questioned the rejection of the conditional EoI by its email

dated 14.04.2021 but simultaneously on 15.04.2021 also submitted fresh EoI

whereby it unconditionally offered participation E-auction schedule to be held

on 16.04.2021. It is brought to our notice that on the conduct on E-auction

dated 16.04.2021, Appellant - UPL Limited submitted a final bid of ₹3.98 crs.

But one Krihaan Texchem Private Limited - which is the Appellant in a related

CA (AT)(Ins.) No. 811/2025 also participated in the e-auction and emerged as

the highest bidder with a bid of ₹4.58 crores, which was significantly higher

than the reserved price of ₹2.69 crs. Accordingly, the liquidator issued the

letter of intent in favour of M/s Krihaan Texchem Private Limited in respect

of the sale of the additional land for a consideration of ₹4.58 crs. when the

matter was taken by the Adjudicating Authority in the Appeal.

22. When the Adjudicating Authority took up IA No. 847/2021 and IA

1189/2021 in CP No. 294/2018, it went into the details into the auction and

concluded as follows in paras 61, 62 and 63, page 69 ABP which extracted as

below:

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 12 of 28 "60. When Additional Land of approximately 12,981 sq. mts. was discovered, the same should have been put up for public auction, but Liquidator chose to send the emails dated 07.02.2020 and 12.03.2020 to UPL expressing his intention to sell the Additional Land to UPL at its bid rate. We are unable to appreciate this conduct of the Liquidator.

61. Further, we are also unable to understand the reserve price for the Additional Land in the Impugned E-Auction dated 30.03.2021 which is mentioned as Rs. 2.90 crores. UPL had already agreed to purchase the Additional Land of 12,981 sq. mts. at its bid rate which indicates that the price for the newly discovered Additional Land of 12,981 sq. mts. comes to Rs. 4.87 crores (43,43,00,000/1,15,632 x 12,981). Logically, the Liquidator ought to have set a reserve price which could fetch a bid of more than what UPL was supposedly offering to pay. However, the Liquidator chose to set the reserve price of the Additional Land at Rs. 2.90 crores and no plausible explanation has been whatsoever given by the Liquidator for arriving at this reserve price.

62. We also observe the conduct of UPL that though it had offered to purchase the Additional Land at its bid rate i.e. for Rs. 4.87 crores but when it participated in the E-Auction dated 16.04.2021, it offered a bid price of Rs. 3.99 crores."

23. It is brought to our notice that the Adjudicating Authority had

committed an error in its calculations with respect to the reserved price. The

liquidator has brought to our notice that the correct calculation of the

reserved price is as follows:

"7.3. The Ld. Adjudicating Authority has erroneously relied on only a portion of Lot 2 (i.e. Plot No. 825/2 admeasuring 1,15,632 sq. mt.) while using the entire consolidated bid value of Rs. 43.43 Crores given for entire

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 13 of 28 Lot 2 being 1,96,958 sq. mt. [para 61, pg. 69, Ann. A-1, Vol. I]. This omission has resulted in an inflated per sq. m. value and erroneous conclusion that the value of Additional Land (12,981 sq. mt.) is Rs. 4.87 Crores.

a) The calculation adopted by the Ld. Adjudicating Authority to fix the Reserve Price was:

(INR 43.43 crores + Part of Leasehold land area under Lot 2 i.e. 1,15,632 sq. m.) x 12,981.64 sq. m. INR 4.875 crore > Rounded off by the Ld. Adjudicating Authority to INR 4.87 crore)

b) Accordingly, the Reserve Price for the Additional Land admeasuring 12,981.64 sq. m. was erroneously computed at INR 4.87 crores for the E-Auction, by the Ld. Adjudicating Authority.

7.4. The Ld. Adjudicating Authority failed to appreciate that the reserve price for Additional Land at Rs. 2.90 Crore was determined on the basis of consolidated bid of Rs. 43.43 Crores received for Lot 2 admeasuring 1,96,958 sq. mt. (i.e. including leasehold land of Plot No. 825 being 1,15,632 sq mt. and freehold land of 81,326 sq. mt.).

c) The calculation adopted by the Liquidator to fix the Reserve Price was:

(INR 43.43 crores total land area of 1,96,958 sq. m.) × 12,981.64 sq. m. = INR 2.86 crore => Rounded off to INR 2.90 crore) Note: Total land area includes: leasehold land of 1,15,632 sq. m. + freehold land of 81,326 sq. m.

d) Accordingly, the Reserve Price for the Additional Land admeasuring 12,981.64 sq. m. was computed at INR 2.86 crores and thereafter rounded up & fixed at INR 2.90 crores for the E-

Auction.

7.5. Comparative Presentation of Computation of Correct & Wrongful Reserve Price:

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 14 of 28 Particulars Correct Calculation Wrongful Calculation as per the factual by the Ld. position by the Adjudicating Liquidator Authority (Para 61 of the Impugned Order) Sale Consideration of INR 43.43 crore INR 43.43 crore Land under Lot 2 of the Earlier E-Auction held on 16.01.2020

Land Area under the said 1,96,958 sq. mt. 1,15,632 sq. mt. (Lot Lot 2 2 consist of leasehold (leasehold land of land of Plot No. 825 Plot No. 825 being being 1,15,632 sq mt.

1,15,632 sq mt. PLUS PLUS freehold land of freehold land of 81,326 sq. mt., 81,326 sq. mt.) however, the Ld. Adjudicating Authority has wrongfully considered the area of leasehold land only i.e. 1,15,632 sq mt.) Computation of Reserve = (INR 43.43 crore / = (INR 43.43 crore / Price for Additional Land 1,96,958 sq. mt.) * 1,15,632 sq. mt.) * (12,981.64 sq. mt.) on 12,981.64 sq. mt. 12,981.64 sq. mt. the basis of Sale Consideration for the = INR 2.86 crore = INR 4.87 crore Land under Lot 2 of Earlier E-Auction held on Rounded off to INR (As per Para 61 of the 16.01.2020 2.90 crore Impugned Order dated May 2, 2025)

24. We find that the calculations as presented by the liquidator are correct

and there is an error committed by the Adjudicating Authority including only

leasehold land of Plot No. 825 i.e. 1,15,632 sq. mt. for ₹43.43 crores instead

of the total land which was 1,15,632 + 81,326 sq.mt. which is 1,96.958 sq.

mt. Such a calculation would reduce the calculation from ₹4.87 crs. to ₹2.86

crores.

25. We find that the Impugned Order erroneously questions why the reserve

price was set at ₹2.86 crores, when R1 had already agreed to purchase the Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 15 of 28 Additional Land at ₹4.87 crores. It further states that logically the Liquidator

ought to have set the reserve price more than R1's offer price which the

Liquidator did not do. On this basis, the Impugned Order directs the conduct

of fresh auction of the Additional Land. Such a conclusion is erroneously

drawn. We find that the reserve price was set at ₹2.86 crores for auction of

Additional Land, which was the auctioned price that R1 paid for the Lot-2

Area. Therefore, the reserve price for the Additional Land was not lesser than

the reserved price or auctioned price of Lot 2 Assets. Moreover, R1-UPL never

agreed to purchase the Additional Land at ₹4.87 crores, either prior to or

during the auction. During the auction, R1 bid for the Additional Land at

₹3.99 crores, which the Impugned Order itself records. On the contrary

Appellant bid at ₹4.57 crores, which was more than R1's bid and therefore

emerged as the successful auction purchaser. Further, Impugned Order

records that the offer to purchase the Additional Land by R1 at ₹4.87 crore

was made orally by counsel during hearing of its IA 847/2021. Such a

conclusion in the Impugned Order and directing fresh auction cannot be

legally permitted, as R1 despite having bid less at auction, had the unfair

advantage of knowing Appellant's bid after auction, and offered a higher

amount outside of the auction. This is extraneous to any applicable law and

procedure, and may not be countenanced.

26. Therefore, the conclusions drawn by the Adjudicating Authority basis

incorrect calculations cannot be sustained in the impugned order.

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 16 of 28

27. The Adjudicating Authority has also concluded in para 64, that the

Appellant had participated in the e-auction and is ready and willing to pay

the price and bid rates at which M/s UPL Limited purchased the Lot 2 which

comes around approximately ₹4.87 crs. which is more than the price quoted

by the Krihaan Texchem Private Limited who was declared as the highest

bidder. We find that this conclusion is based on erroneous calculations and

therefore cannot be sustained.

28. Furthermore, it is also noted by the Adjudicating Authority at para 60

that when additional land was discovered, the same should have been put for

publication auction. But the liquidator chose to send emails dated 07.02.2020

and 12.03.2020 to M/s UPL Limited expressing its intention to sell the

additional land to M/s UPL Limited at its bid rate. And they did not appreciate

this conduct of the liquidator. On a pointed query from the liquidator, it was

informed to us that it was more of a price discovery mechanism rather than

bid to sale the additional land to M/s UPL Limited. This communication also

had a clear disclaimer that this is not an offer to sale the land, which has

been noted by us separately. Therefore, in this condition we do not find these

comments can be sustained and needs to be expunged.

29. The Appellant in CA (AT)(Ins.) No. 811 of 20 25 has specifically brought

to our notice, the judgment of Hon'ble Supreme Court in Eva Agro Feeds Pvt.

Ltd. v. Punjab National Bank and Anr. (2023) 10 SCC 189, to bring on

record that valid auction cannot be cancelled due to the mere expectation of

fetching higher price. The relevant paragraph of this judgment is as follows:

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 17 of 28 "79. Thus, mere expectation of the Liquidator that a still higher price may be obtained can be no good ground to cancel an otherwise valid auction and go for another round of auction. Such a cause of action would not only lead to incurring of avoidable expenses but also erode credibility of the auction process itself. That apart, post auction it is not open to the Liquidator to act on third-party communication and cancel an auction, unless it is found that fraud or collusion had vitiated the auction. The necessary corollary that follows therefrom is that there can be no absolute or unfettered discretion on the part of the Liquidator to cancel an auction which is otherwise valid. As it is in an administrative framework governed by the rule of law there can be no absolute or unfettered discretion of the Liquidator. Further, upon a thorough analysis of all the provisions concerning the Liquidator it is evident that the Liquidator is vested with a host of duties, functions and powers to oversee the liquidation process in which he is not to act in any adversarial manner while ensuring that the auction process is carried out in accordance with law and to the benefit of all the stakeholders. Merely because the Liquidator has the discretion of carrying out multiple auction it does not necessarily imply that he would abandon or cancel a valid auction fetching a reasonable price and opt for another round of auction process with the expectation of a better price.

Tribunal had rightly held that there were no objective materials before the Liquidator to cancel the auction process and to opt for another round of auction."

30. We find that this judgment clearly lays down the law and that mere

expectation of the liquidator that still higher price may be obtained can be no

ground to cancel an otherwise valid auction and go for another round of

auction.

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 18 of 28

31. We observe that R1-UPL has taken contrary stands. It claims that since

the Additional Land forms part of the Lot-2 Assets, therefore, it could not have

been auctioned separately in favour of Appellant. However, in the same

breath, R1 also states that that the Additional Land may be sold to it at the

same rate at which Respondent bid for Lot-2. We find that both these

contentions are incorrect. First, the Additional Land does not form part of Lot-

2 Assets, as has been observed in the Impugned Order. Secondly, there is no

justification whatsoever as to why the Additional Land ought to be sold to R1

at the same rate that they bid for Lot-2 area. In fact, as a measure of value

maximization, the Liquidator had rightly set the reserve price for the auction

of the Additional Land at ₹2.90 crores, which was the same rate at which the

R1 paid for the Lot-2 Area. Thereafter, R1 itself bid at a much lower price, and

ultimately Appellant emerged as the highest bidder, by paying ₹4.58 crore,

which was substantially much more than the price paid by R1 for Lot-2

Assets, i.e. ₹2.90 crores. Thus, there is no justification that the Additional

Land should be sold to it at the same purchase price of Lot-2 Assets.

32. Further we find that the adjudicating authority cannot come to such a

conclusion that an e-auction should be conducted afresh on the basis of an

expectation of a higher price when the auction was conducted without any

flaws. We now delve into this issue. We observe that the process of E-Auction

dated 30.03.2021 was valid and not challenged by Respondent No. 1 - UPL.

Further we don't find any finding in the Impugned Order of serious flaws in

the conduct of the auction or any fraud or collusion that went to the root of

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 19 of 28 the auction. We further observe that the courts in a catena of judgements,

have ruled that an auction, when properly conducted and confirmed, ought

not to be interfered with lightly. An auction can be set aside and a fresh

auction can be directed only in cases where grounds of collusion, fraud or

other fundamental procedural irregularities can be made out. There is no

allegation of collusion, fraud or any fundamental procedural irregularity in

the present case alleged by the Respondent No.1-UPL. The appellant has

placed its reliance on various judgments cited by it and specifically in V.S.

Palanivel v. Sri Lakshmi Hotels (P) Ltd. (2025) 1 SCC 559 the Hon'ble

Supreme Court held that:

XXX

88. This Court must underscore the well-settled legal position that once an auction is confirmed, it ought to be interfered with on fairly limited grounds. [Refer : Valji Khimji & Co. v. Hindustan Nitro Product (Gujarat) Ltd.

(Official Liquidator) [Valji Khimji & Co. v. Hindustan Nitro Product (Gujarat) Ltd. (Official Liquidator), (2008) 9 SCC 299 : (2008) 145 Comp Cas 36] and Celir LLP v. Bafna Motors (Mumbai) (P) Ltd. [Celir LLP v. Bafna Motors (Mumbai) (P) Ltd., (2024) 2 SCC 1 : (2024) 1 SCC (Civ) 62 : (2024) 242 Comp Cas 45] ] Repeated interferences in public auction also result in causing uncertainty and frustrate the very purpose of holding auctions. (Refer : K. Kumara Gupta v. Sri Markendaya & Sri Omkareswara Swamy Temple [K. Kumara Gupta v. Sri Markendaya & Sri Omkareswara Swamy Temple, (2022) 5 SCC 710 : (2022) 3 SCC (Civ) 178] .) Unless there are some serious flaws in the conduct of the auction as for example perpetration of a fraud/collusion, grave irregularities that go to the root of such an auction, courts must ordinarily refrain from setting them aside keeping in mind the domino effect such an order would have. Given the facts noted above, we

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 20 of 28 shall refrain from cancelling the sale or declaring the sale deed as void. Instead, it is deemed appropriate to balance the equities by directing the auction-purchaser to pay an additional amount in respect of the subject property.

XXX

33. The above judgment supports the argument of the Appellant that the

Adjudicating Authority may not have interfered with the auction.

34. Another judgment of the Hon'ble Supreme Court which is relied upon

by the plaintiff and which supports its case is Celir LLP v. Sumati Prasad

Bafna and Ors. (2024) SCC OnLine SC 3727 in which the Honorable

Supreme Court held that:

XXX

218. Any sale by auction or other public procurement methods once already confirmed or concluded ought not to be set-aside or interfered with lightly except on grounds that go to the core of such sale process, such as either being collusive, fraudulent or vitiated by inadequate pricing or underbidding. Mere irregularity or deviation from a rule which does not have any fundamental procedural error does not take away the foundation of authority for such proceeding. In such cases, courts in particular should be mindful to refrain entertaining any ground for challenging an auction which either could have been taken earlier before the sale was conducted and confirmed or where no substantial injury has been caused on account of such irregularity.

XXX And in this case, we find that the auction is not collusive, fraudulent, or

vitiated by inadequate pricing or underbidding. Therefore, the judgment of the

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 21 of 28 Hon'ble Supreme Court supports the case of the Appellant and goes against

the justification provided by the adjudicating authority for holding the fresh

auction.

35. We also find no material irregularity in the liquidator's conduct by not

allowing the private sale as private sale of the additional land would require

mandatory prior permission from the Ld. Adjudicating Authority. Such a

situation is noted in the judgment of this Appellant Tribunal in Orissa Alloy

Steel Pvt. Ltd. v. SM Steels and Power Ltd. (2025) SCC OnLine NCLAT

1758 wherein it relied on R.K. Industries (Unit-II) LLP v. HR Commercials

Pvt. Ltd. (2024) 4 SCC 166 and wherein it was noted as below:

XXX

Regulation 33 of the Liquidation Regulations comes into play and states that ordinarily, the liquidator will sell the said assets through auction, as specified in Schedule I(1). Sub-section (2) of Section 33 IBC gives an option to the liquidator to sell the assets of the corporate debtor through a private sale, in the manner set out in Schedule I(2). Regulation 33 of the Liquidation Regulations is couched in a language which shows that ample latitude has been given to the liquidator, who may "ordinarily" sell the assets through auction thereby meaning that in peculiar facts and circumstances, the liquidator may directly go in for a private sale. To avoid the pitfalls of disposing of the assets by conducting a private sale for the pittance, Regulation 33 has prescribed some stringent conditions that the liquidator is under an obligation to comply. The said preconditions are that:

(i) the asset is perishable; (ii) the asset is likely to deteriorate in value significantly if not sold immediately; (iii) the asset is sold at a higher price than the reserved price of the failed auction; and (iv) the adjudicating authority (NCLT) must grant prior permission for such a sale. The proviso

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 22 of 28 appended to Regulation 33(2) of the Liquidation Regulations places yet another embargo to the effect that when the liquidator intends to sell the assets of the corporate debtor by way of a private sale to a related party of the corporate debtor, his relative party or any professional appointed by him, it is mandatory to obtain prior permission of the adjudicating authority (NCLT).

XXX

In this case since the liquidator had not obtained prior permission of the

adjudicating authority, and also it did not go for private sale and therefore it

cannot be faulted for not undertaking the private sale auction. Therefore, it

averted committing a material irregularity which could have vitiated the

auction process. We find that R2-Liquidator exercised its discretion correctly

and took a view of profit maximization in compliance with Regulation 33 of

the Insolvency and Bankruptcy Board of India (IBBI) (Liquidation Process)

Regulations, 2016 along with Schedule I. In view of the above, the R2 correctly

released e-auction notice for the Additional Land and set the reserve price at

a rate higher than the final auction price of the Lot-2 area.

36. Moreover, we observe that the R1-UPL cannot claim that the additional

area formed part of Plot 825/2 of Lot 2. R1 argues that there was a

discrepancy with respect to the leasehold land as stated within the first E-

Auction notice which identified Plot 825/1 to have leasehold area of 1,70,133

sq. mt. and Plot 825/2 to have leasehold area of 1,15,632 sq. mt. in

comparison to the leasehold area provided for both Plots in the Gujarat

Industrial Development Corporation ("GIDC") Order dated 15.12.2020 which

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 23 of 28 stated, that Plot 825/1 to have leasehold area of 1,58,541.89 sq. mt. and Plot

825/2 to have leasehold area of 1,12,742 sq. mt.

37. However, we observe that the GIDC issued Order dated 15.12.2020

permitting the sub-division of the Plot No. 825 into three Parts viz. 825/1,

825/2 and 825/3, more particularly as stated below:

R1 claims that the original auction notice on the basis of which they emerged

as the successful auction purchaser, already included the additional land

admeasuring 12,981 sq. mt. Thereafter, the Provisional Order of the GIDC

reduced the size of Plot 825/2 and created the Additional Land which formed

Plot 825/3. Thus, the Additional Land should form part of Plot 825/2. Such

contention cannot be countenanced for the reason that even if the leasehold

land of 12,981 sq. mt. were to be added to the post GIDC Order, leasehold

land area of 1,12,742 sq. mt. belonging to Plot 825/2, the total area of land

would far exceed the 1,15,632 sq. mt. of land claimed to have been purchased

by Respondent No. 1 through the first E-Auction dated 16.01.2020.

Furthermore, the bid document merely stated that the measurements of Plot

825/2 were tentative and subject to survey to be conducted by the Liquidator

and sub-division by the GIDC. Furthermore, R2- Liquidator wrote a letter to

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 24 of 28 R1 whereby it was clarified that transfer or assignment of Plot 825/2 was

subject to obtaining approval of the GIDC.

38. We find that in this case procedure followed for the e-auction was

proper - a) The E-Auction notice was publicly advertised; b) Was conducted

by an independent entity; c) It saw participation of interested parties -

including R1 without objection; d) Was won by the highest bidder. Therefore,

there was no procedural or any other irregularity in the conduct of the auction

and thus, did not warrant any interference.

39. Furthermore, we observe that the R2 set the reserve price for additional

land based on the bid price of R1- UPL in the previous auction. The same can

be seen by the e-auction notices. Thus, we do not find any material

irregularity in Liquidator's conduct.

Conclusions

40. We have also observed that the Impugned Order erroneously calculates

these amounts. At para 61 of the impugned order, the Adjudicating Authority

had observed as follows:

XXX

61. Further, we are also unable to understand the reserve price for the Additional Land in the Impugned E-Auction dated 30.03.2021 which is mentioned as Rs. 2.90 crores. UPL had already agreed to purchase the Additional Land of 12,981 sq. mts. at its bid rate which indicates that the price for the newly discovered Additional Land of 12,981 sq. mts. comes to Rs. 4.87 crores (43,43,00,000/1,15,632 x 12,981). Logically, the Liquidator ought to have set a reserve price which could fetch a bid of more than what UPL was supposedly offering to pay. However, the Liquidator chose to set

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 25 of 28 the reserve price of the Additional Land at Rs. 2.90 crores and no plausible explanation has been whatsoever given by the Liquidator for arriving at this reserve price.

XXX

41. We find that there is an error in the calculation of the price of land as

the price of the additional land as offered by Respondent No. 1 cannot come

to ₹4.87 crores, as it was not 43,43,00,000/1,15,632 x 12,981 as observed

by the Adjudicating Authority in its impugned order. As the Respondent No.

1 had paid ₹43.43 crores not just for the 1,15,632 sq. mt. of leasehold land

but also for 81,326 sq. mt. of freehold land in Lot 2 Area, therefore, the correct

calculation should be 43,43,00,000/196958 x 12,981, which comes to ₹2.86

crs. The same has been confirmed in the reply of Respondent No. 2.

42. Thus, we find that Adjudicating Authority has made a factual error that

R1's bid for the additional land was for a price of ₹4.87 crores. R2 in its reply,

has clarified that as per the official bid of the E-Auction, R1's bid was only

₹3.99 crores and not ₹4.87 crores.

43. Therefore, we find that the observations of the Adjudicating Authority

at Para 61, which led to the conclusion by the Adjudicating Authority that re-

option should be done, are based on incorrect calculations and cannot be

sustained.

44. We find that in this case; there is no material irregularity or collusion

or any fundamental procedural irregularity which has been alleged by the

Appellant. Therefore, the conclusion arrived at by the Adjudicating Authority

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 26 of 28 that fresh auction be conducted is not in line with the settled principles of

auction in liquidation.

45. R1-UPL has also questioned the locus standi of the applicant. We find

that the applicant's locus standi cannot be really questioned as the present

appeal has been filed against setting aside of the auction by Impugned Order.

Sec. 61(1) of the Insolvency & Bankruptcy Code, 2016 ("IBC") clearly states

that "any person" aggrieved by the order of the Adjudicating Authority may

prefer an appeal before this Hon'ble Tribunal. By directing a fresh auction to

be conducted for sale of Additional Land, which was earlier awarded to

Appellant, the Appellant is clearly aggrieved by the Impugned Order, and

therefore, has locus standi to file the present Appeal.

46. We also observe that the conduct of R1 has been malicious throughout

the entire e-auction process. It claimed Additional Land as a part of Plot sold

to them in a prior e-auction dated 16.01.2020 ("prior e-auction"). Later it

challenged Notice of said e-auction while also participating in it - tried to

approbate and reprobate out of said e-auction. It also did not implead the

Appellant despite it being a necessary party to said e-auction and also made

oral submissions before Ld. Adjudicating Authority of revision of its bid price

to a higher amount after knowing the Appellant's winning bid. These actions

of R1 jeopardize a valid e-auction and cannot be entertained.

Order

47. Therefore, we don't find order of the Adjudicating Authority to be

sustainable and we accordingly set aside the impugned order. Accordingly,

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 27 of 28 the Appeal is allowed in CA (AT)(Ins.) No. 811/2025 and the Appeal in CA

(AT)(Ins.) No. 1106/2025 is dismissed. Accordingly, Respondent No.2 i.e.

Liquidator is directed to issue sale certificate for Plot No. 825/3 admeasuring

12981.64 sq. mtr. in favour of the Appellant along with consequential

necessary steps. All related IAs are also disposed of.

[Justice N Seshasayee] Member (Judicial)

[Arun Baroka] Member (Technical) New Delhi.

June 30, 2026.

pawan

Company Appeal (AT) (Insolvency) No. 811 & 1106 of 2025 28 of 28