2025 Supreme(Online)(NCLT) 7991

NATIONAL COMPANY LAW TRIBUNAL
Ramalingam Sudhakar, President, Ravindra Chaturvedi, Technical Member
Marinaindia Traexim Private Limited – Appellant
Versus
Waseem Ahmad Khan – Respondent
CP(IB)-951(PB)/2020|IA-2204/2025|IA-2351/2025|IA-2534/2025

A concluded e-auction cannot be set aside on unsubstantiated allegations of technical glitches. Where internal audit logs verify active participation of the bidder throughout the process, the court will not interfere with the finality of the auction sale absent proof of fraud, collusion, or fundamental procedural irregularity.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 60(5) - Rules of the National Company Law Tribunal, 2016 - Rule 11 - E-auction process in bankruptcy - Challenge to auction due to alleged technical glitches - Once a public auction is concluded and confirmed, it ought not to be set aside lightly except on grounds going to the core of the process such as fraud, collusion, or manifest illegality - Mere irregularity or allegations of technical failures not substantiated by evidence, especially when the bidder remained active and participated on the platform throughout the designated time, does not warrant interference - Aggrieved parties must demonstrate material irregularity and show that proper grievance redressal mechanisms were exhausted during the live process. (Paras 20, 24, 25)

(B) Appeal/Review - Scope of Judicial Intervention - Adjudicating Authority must prioritize the time-bound nature of insolvency proceedings - It is impermissible for an unsuccessful bidder to challenge the auction process after its conclusion simply to improve their offer or as an afterthought, as this leads to endless litigation and undermines the sanctity of the sale. (Paras 25, 26, 34)

Facts of the case:
The applicant sought to set aside an e-auction held for the sale of assets in a bankruptcy process, alleging that technical failures on the auction platform prevented fair participation. The respondents contended that the system was stable, other bidders faced no issues, and audit logs showed the applicant continued to bid actively for several hours after the alleged technical glitches occurred.

Findings of Court:
The court found that the applicant’s claims were unsubstantiated by the digital audit trails, which revealed continued participation in the auction long after the time specified in the complaint. The court observed that the applicant failed to raise grievances during the live process and that setting aside a concluded auction without material evidence of fraud or fundamental procedural error would disrupt the finality of the process.

Issues: Whether an e-auction can be set aside on the basis of alleged technical glitches when audit logs indicate continued participation by the bidder, and whether an unsuccessful bidder can challenge a concluded sale to seek re-auction for better price realization.

Ratio Decidendi: An auction process cannot be interferred with in the absence of evidence of material irregularity, fraud, or collusion, particularly where the records show the bidder was active and had the opportunity to bid, and the challenge is raised as an afterthought following the conclusion of the auction.

Result: Applications dismissed.