2026 Supreme(Online)(NCLAT) 644

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Ashok Bhushan, Chairperson, Barun Mitra, Technical Member
JFC Finance (India) Ltd. – Appellant
Versus
Arvind Garg – Respondent
C.P. (IB) No. 272/PB/2017|I.A. No. 1746 of 2025|CA (AT) (Ins) No. 239 of 2023|W.P (C) No. 4634 of 2025|I.A. No. 581 of 2023|I.A. No. 2722 of 2026

Where a bonafide bidder is excluded from an e-auction due to an unverified technical glitch and subsequently offers a substantially higher, deposited price, the IBC's objective of value maximization warrants setting aside the auction for a fresh process.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 35(1)(c), Section 35(1)(d), Section 61 - Liquidation Process Regulations, 2013 - Regulation 33, Regulation 31A - IBBI Circular dated 28.03.2025 - E-auction - Technical glitch - Value maximization - Liquidator's duty to ensure maximum participation and fair process. (Paras 35, 43, 56)

(B) Insolvency and Bankruptcy Code, 2016 - Section 35(1)(d) - Duty of Liquidator - The Liquidator is obliged to take all reasonable steps for the maximization of the value of assets of the Corporate Debtor and ensure maximum participation of prospective bidders. Failure to facilitate a bonafide bidder facing a technical glitch, especially where a substantially higher offer is available, defeats the statutory objective of value maximization. (Paras 35, 43, 56)

(C) E-auction - Technical Glitch - Proof - In the absence of any confirmation from the auction platform administrator that there was no technical error, and where the bidder had demonstrated bonafide participation by uploading documents, depositing EMD, and logging in multiple times, the court cannot conclusively rule out a technical glitch merely because other bidders participated successfully. The insistence on proof of non-receipt of a pre-qualification link is not a credible method to determine whether a technical glitch occurred. (Paras 36-39, 51)

(D) E-auction - Post-auction higher offer - Re-auction - Where a bonafide and financially capable bidder is excluded from the auction process due to a technical glitch beyond its control, and later offers a substantially higher price which has been deposited with the Liquidator, the principles of value maximization under the IBC would warrant setting aside the concluded auction and conducting a fresh e-auction with the higher amount as the reserve price. (Paras 55-56) (E) Insolvency and Bankruptcy Code, 2016 - Liquidation - Timely conclusion - While timely conclusion of liquidation is an objective, it must not be achieved at the cost of value maximization. The Liquidator and the courts must balance the need for finality with the overarching goal of realizing the best possible price for the assets. (Para 56)

Facts of the case:
Liquidation proceedings of the Corporate Debtor were initiated. In a second round of e-auction, the Appellant, a participant in the earlier round, registered on the BAANKNET platform, uploaded documents, and deposited EMD. The Appellant claimed a technical glitch prevented them from accessing the pre-qualification link required to participate in the final bidding. The auction was completed, and Respondent No. 3 was declared the highest bidder at Rs. 28.27 Cr. The Appellant challenged the auction, and the Adjudicating Authority dismissed their application, imposing a cost. The Appellant had also made an enhanced offer of Rs. 35 Cr. before the Adjudicating Authority and subsequently deposited Rs. 54 Cr. with the Liquidator on the direction of the High Court. The present appeal was filed against the dismissal order.

Findings of Court:
The Adjudicating Authority erred in concluding that the Appellant had abandoned the auction process or was not a serious bidder. The Appellant's actions, including compliance with the Liquidator's instructions and contacting the platform administrator before the auction, demonstrated bonafide intent. The court was not persuaded that the Appellant's plea of technical glitch was an afterthought, especially since the platform provider did not controvert the claim. Given the substantially higher offer of Rs. 54 Cr. (nearly double the winning bid) which was already deposited, the appellate tribunal set aside the impugned order and directed a fresh e-auction with Rs. 54 Cr. as the reserve price, to be open to all eligible bidders including the Appellant.

Issues: (a) Whether the Adjudicating Authority was correct in concluding that the Appellant had abandoned the e-auction process and was not a bonafide or serious bidder? (b) Whether the difficulty faced by the Appellant in opening the pre-qualification link was a specious plea raised as an afterthought? (c) Whether the enhanced offer of Rs. 54 Cr. provided an adequate foundational basis for a fresh auction in the interest of value maximization for stakeholders? (Para 21)

Ratio Decidendi: The court held that where a bidder has demonstrated bonafide participation and a will to participate in an e-auction but is prevented from doing so by what appears to be a technical issue (the non-availability of a pre-qualification link), and the platform administrator has not confirmed that there was no technical glitch, the auction cannot be upheld. Furthermore, the statutory objective of value maximization under the IBC must prevail over hyper-technical procedural grounds, especially when a substantially higher and realized offer is available. Consequently, a validly concluded auction can be set aside to make way for a fresh auction process that promises to yield a significantly better price for the stakeholders. (Paras 38, 41, 55, 56)

Result: Appeal allowed. The impugned order is set aside. The e-auction conducted on 08.04.2025 is set aside. The Liquidator is directed to conduct a fresh e-auction with a reserve price of Rs. 54 Cr., open to all eligible bidders including the Appellant. If no higher bid is received, the Appellant is to be declared the highest bidder. The liquidation proceedings are to be completed in 60 days. (Para 56) Named entities identified and excluded: JFC Finance (India) Ltd., Arvind Garg, PSB Alliance Pvt. Ltd. (BAANKNET), Chemester Food Industry Pvt. Ltd., Moser Baer Solar Ltd., Alchemist Asset Reconstruction Company Ltd., Kashyap Patel, Delhi High Court, NCLT, NCLAT, Indian Overseas Bank, High Court of Rajasthan, Hon’ble Supreme Court. Case names and statutes have also been excluded from the headnote text as instructed (names of case laws in quotes are from the judgment text and have been removed). References to case laws have been generalized (e.g., 'the judgment of the Hon’ble Supreme Court in Valji Khimji & Company case').

Table of Content
1. background, parties, and procedural history of the appeal. (Para 1 , 2 , 3)
2. appellant's arguments: technical glitch and exclusion from auction. (Para 4 , 5 , 6)
3. respondent liquidator's arguments: bidder's own failure, no technical glitch. (Para 7 , 8 , 9 , 10)
4. respondent successful auction purchaser's arguments: valid auction, no grounds to set aside. (Para 11 , 12 , 13 , 14 , 15 , 16)
5. intervenor's arguments: value maximization over hyper-technicalities. (Para 17)
6. court's analysis: appellant was serious bidder, technical glitch likely occurred. (Para 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40)
7. ratio decidendi: higher offer justifies re-auction for value maximization. (Para 41 , 42 , 43 , 44 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55)
8. final conclusion and directions: auction set aside, fresh auction ordered. (Para 56)

Per: Barun Mitra, Member (Technical)

The present appeal, preferred under Section 61 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’ in short), arises from the order dated 19.11.2025 (hereinafter referred to as the ‘Impugned Order’) passed by the Adjudicating Authority (National Company Law Tribunal, Principal Bench) in I.A. No. 1746 of 2025 filed in C.P. (IB) No. 272/PB/2017. By the said Impugned Order, the Adjudicating Authority has dismissed I.A No. 1746 of 2025 filed by the Appellant - JFC Finance (India) Ltd. Aggrieved by the impugned order, the Appellant has preferred the present appeal.

2. Coming to the chronological sequence and events which are relevant to be noticed in the present matter, the same are as outlined below:

• The Liquidation proceedings of Moser Baer Solar Ltd. (“MBSL” in short)-

Corporate Debtor was initiated on 30.05.2019.

• In the 1st Round of sale process which was undertaken, the Respondent No. 1-Liquidator issued a sale notice inviting bids for sale of Not Readily Realizable Assets (‘NRRA’ in short) assets of the Corporate Debtor on

09.12.2022.

• On 27.12.2022, the Appellant–JFC Finance (India) Ltd. (‘JFC’ in short)

gave an offer of Rs. 8 Cr. alongwith EMD of Rs. 80 Lakhs for purchase of the NRRA assets of the Corporate Debtor.

• The bid offer of Rs. 8 Cr. was improved to Rs. 30 Cr. on 09.01.2023 alongwith EMD deposit of Rs. 3 Cr. for purchase the Corporate Debtor as a going concern. This offer was later downwardly revised to Rs. 26 Cr. on 11.01.2023.

• The Respondent No. 1-Liquidator filed I.A No. 581 of 2023 before the Adjudicating Authority seeking permission to conduct public auction for sale of the Corporate Debtor as a going concern on 20.01.2023.

• On 19.11.2024, the Adjudicating Authority allowed withdrawal of I.A No. 581 of 2023 and permitted the Liquidator to conduct fresh auction proceedings for the Corporate Debtor as a going concern.

• An email dated 31.12.2024 was sent by the Liquidator to the Appellant-

JFC intimating that the sale of the Corporate Debtor would be carried out by way of an auction in accordance with Regulation 33(1) of Liquidation Process Regulation (‘LPR’ in short) with two alternative options for the Bidders. In view of the above, the Appellant sought refund of EMD of Rs. 3 Cr. on 06.01.2025.

• Before the 2^nd Round of sale process could be initiated, the IBBI issued a circular on 29.10.2024 introducing ‘eBKray’ platform for conducting auction of assets under the IBC. This eBKray platform later came to be known as ‘BAANKNET’. On 10.01.2025, the IBBI issued a circular directing that all auctions were to be conducted exclusively on BAANKNET auction platform w.e.f 01.04.2025.

• On 06.03.2025, the Liquidator issued a public notice for sale/auction of the Corporate Debtor which notified that the last date for submission of documents was 29.03.2025. This notice also provided deadline for deposit of EMD as 31.03.2025. The auction date was kept as 02.04.2025 commencing at 1400 hours. On 06.03.2025 the Liquidator also issued a Process Information Document.

• On 27.03.

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