Merely alleging technical glitches without evidence does not invalidate a validly conducted auction process; diligent participation is necessary.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 60(5) - Regulation under NCLT Rules - Auction process challenges due to technical glitches - The Applicant, during the auction for assets of Mr. Waseem Ahmad Khan, claimed to have faced technical failures preventing fair participation; however, the court found continued participation, thereby rendering the claims unsupported. (Paras 1, 9, 30)

(B) Auction Process - Fair Participation - The court observed that participation in an auction requires diligence, and failure to bid within stipulated time frames cannot be grounds for contesting concluded auctions. Unverified claims of technical glitches without supporting documentation do not justify setting aside valid auction processes. (Paras 25, 29)

Facts of the case:
The Applicant sought to set aside an e-auction alleging technical failures in bidding, despite participating actively until near the auction’s conclusion. Key details included the auction of specific lots, monetary bids placed and the applicant's grievance about the auction’s transparency and technical issues.

Findings of Court:
The court found no merit in the application, highlighting that the applicant's participation records contradicted claims of technical glitches, emphasizing the need for diligence and immediate objection during the auction process.

Issues: Whether the applicant was deprived of fair participation in auction due to alleged technical glitches, and whether the auction process was conducted in a transparent manner.

Ratio Decidendi: The auction was deemed valid, with the court holding that mere assertions of technical issues, unaccompanied by evidence, cannot overturn a confirmed auction. Timeliness in bidding and raising objections is essential under auction protocols.

Result: IA-2204/2025 dismissed.

ORDER

IA-2204/2025

1. The prayers in the application read as follows:“a) Direct for setting aside the auction conducted on 01.05.2025 and for re-auction of assets belonging to Mr. Waseem Ahmad Khan in bankruptcy process due to the technical failures that prevented fair participation in thee-auction conducted on 01.05.2025 b) Direct the Respondent No. 1 E-auction Service Provider to submit a detailed technical report on the failures experienced during the e-auction conducted on 01 .05.2025;c) Direct the Respondent No. 2 Bankruptcy Trustee to conduct the re- auction through a different and more reliable e-auction service provider to ensure technical stability and fair participation;d) Grant an interim stay on all further proceedings pursuant to the e-auction conducted on O1.05.2025 for the sale of assets belonging to Mr. Waseem Ahmad Khan in bankruptcy process, including but not limited to confirmation of sale, issuance of sale certificates, and transfer of assets to the auction winners, pending the final disposal of the application;e) Pass any other order(s) as this Hon'ble Tribunal may deem fit and proper in the interest of justice, equity, and fair play.”

2. The present application has been filed by M/s Marinaindia Traexim Private Limited (the "Applicant") under Section 60(5) of Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the National Company Law Tribunal Rules, 2016, seeking directions to set aside the auction conducted on 01.05.2025 and for re-auction of assets belonging to Mr. Waseem Ahmad Khan in bankruptcy process.

3. The applicant is a company incorporated under the Companies Act, 2013, having its registered office at Old Buraf Khana, Galshaheed, Eidgah road, Adjacent Masjid General Azeem Uddin, Moradabad, Uttar Pradesh – 222001. The Respondent No. 1, i.e. Linkstar Infosys Private Limited, was responsible for conducting the auction and maintaining the e-auction Platform. Respondent No. 2 is the Bankruptcy Trustee of Mr. Waseem Ahmad Khan.

4. The brief facts of the case, resulting in the filing of the present application, are as follows. That an application under Section 95 of the code was filed by the State Bank of India against Mr. Waseem Ahmad Khan which was admitted by this Adjudicating Authority on 06.04.2022. Further on 02.12.2024 order under Section 126 of the code was passed and Mr. Waseem Ahmad Khan was declared as Bankrupt.

5. Thereafter the bankruptcy trustee published an advertisement dated 15.04.2025 (for sale of assets in the name of Mr. Waseem Ahmad Khan) in Business Standard and Rashtriya Sahara Newspaper. The following table has been attached depicting the timelines for e-auction Process It is stated that the Assets were divided into lots, and assets under auction belonging to Ms. Waseem Ahmad Khan are as follows:

Waseem Ahmad Khan Lot No. 1: Khasra Nos. 72 Min and 73 Min, Dabhora Ahtmali, measuring 3.424 Hectares and 5.059 Hectares respectively, with Reserve Price of Rs. 2,83,74,051/- and EMD of Rs. 28,37,405/-.

Lot No. 2: Khasra Nos. 1, 2, 3 Min, Sand Khera, measuring 4.046 Hectares, with Reserve Price of Rs. 1,83,60,000/- and EMD of Rs. 18,36,000/-

The notice was amended to the effect:

It is stated by the applicant that it transferred the amount of EMD through cheque and RTGS on 23.04.2025. The details are as follows:

1. Rs. 28,37,405/- for Lot No. 1 through cheque No. 891335 RTGS No. IOBAR52025042300387283

2. Rs. 18,36,000/- for Lot No. 2 through cheque No. 891336 through RTGS No. IOBAR52025042300387459

6. It is stated by the applicant that it submitted all the requisite documents including Process information documents for Expression of interest along with affidavits duly signed by the director of the Applicant company through email on 24.04.2025 to Mr. Anil Kohli (Respondent No. 2). The corrected affidavit was sent through email dated 25.04.2025. It is stated that on 28.04.2025, the applicant received an email from Respondent No.1 i.e. the e-auction website confirming approval for participation in