The court affirmed that interest on delayed payments is enforceable under Regulation 33 of the Insolvency and Bankruptcy Code, and bidders must adhere to auction terms without exception.

ORDER

Per Coram:

1. This is an application filed by the Successful Auction Purchaser of M/s Royal SUT Hospital sold in the liquidation process of Corporate Debtor, M/s Trivandrum International Health Services Limited with the following reliefs: -

(i) May be pleased to direct the respondents to repay the interest amount remitted by the applicant on the balance sale consideration, which is Rs. 51,40,149/- with interest upon the same at 12%, to the applicant, as expeditiously as possible, within a time frame fixed by this Tribunal.

(ii) May be pleased to direct the respondents to pay interest to the applicant on the original EMD amount furnished by the applicant, for the period from August 2023 to December 2023, amounting to Rs.14,47,650 (Rupees Fourteen lakh Forty-Seven Thousand Six Hundred and Fifty only), to the applicant, as expeditiously as possible, within a time frame fixed by this Tribunal.

(iii) May be pleased to direct the respondents to pay compensation to the applicant for their inordinate delay in completing the mutation of the property in favour of the applicant in revenue records and for the non-lifting of attachments over the property. and

(iv)Pass such other orders as may be deemed fit and proper in the facts and circumstances of the case to meet the ends of justice.

The Case of the Applicant: -

2. In this application, the applicant stated that, this application arises from the purchase of M/s Royal SUT Hospital by the applicant, a co-operative society, through an e-auction. The Co-operative society paid Rs. 2,89,53,000/- as Earnest Money Deposit (EMD) initially for a private sale, which was later considered as EMD for public auction at the instance of the applicant. After becoming the successful bidder, the society paid the balance consideration, but was subsequently demanded to pay Rs. 51,40,149/- as interest at 12%, claiming that the payment was made beyond the 30-day stipulated in the auction notice. The society is requesting a refund of the interest amount of Rs. 51,40,149/- paid as interest, while also claiming interest on the EMD of Rs. 2,89,53,000/- earlier deposited with the request for private sale for five months, amounting to Rs. 14,47,650/-

The reply affidavit dated 05.11.2024 furnished by the Respondent states as follows: -

3. The Liquidator submitted that under Clause 12 of Schedule 1 to Regulation 33, payments made after 30 days shall attract interest at the rate of 12%, which reads as follows: -

“12. On the close of the auction, the highest bidder shall be invited to provide the balance sale consideration within ninety days of the date of such demand.

Provided that the payments made after thirty days shall attract interest at the rate of 12%"

4. It is further submitted by the Liquidator that the applicant’s demand for interest on delayed payment, amounting to Rs. request for relief is not maintainable in law since the liquidator’s 51,40,149/-, is in accordance with provisions of the Code, specifically, Regulation 33 of IBBI (Liquidation Process) Regulations, 2016.

5. It is stated that the registration of the property was delayed due to pending approvals from the Government of Kerala, and subsequently, an open attachment was observed by the Registrar based on a civil court decree. Despite this, the Liquidator took efforts to lift the attachment, including applying to this Tribunal, which ultimately directed the Sub Registrar to lift the attachment. Therefore, there is no delay or inaction on the part of the Liquidator. It is further submitted that the application lacks merit and is liable to be dismissed at its threshold.

The rejoinder dated 22.04.2025 fu