The National Company Law Tribunal (NCLT), Mumbai Bench, has issued a definitive ruling mandating that an auction purchaser in a liquidation proceeding cannot indefinitely withhold the balance sale consideration citing pending statutory permissions. In an order delivered on October 16, 2026, the bench presided over by Member (Judicial) Vinay Goel and Member (Technical) Charanjeet Singh Gulati directed the respondent, Abhisheksinh F. Chauhan of Haveli Properties Group, to remit an outstanding sum of ₹5,25,09,600 within 30 days to finalize the acquisition of two land parcels belonging to the corporate debtor, Vindhyavasini Corporation Pvt. Ltd.

The dispute stems from an e-auction conducted in August 2023 for three distinct land parcels at Village Silli, Dadra and Nagar Haveli. While the sale of one parcel was successfully completed in 2024, the transfer of the remaining two properties faced delays due to expired Non-Agricultural (NA) usage permissions. The purchaser argued that the lack of clear, transferable title prevented the completion of the transaction, while the liquidator, Mukesh Khaturia, maintained that the "as is where is" nature of the auction terms placed the burden of regulatory compliance squarely on the bidder.

Upholding Auction Transparency and Contractual Obligations

The Tribunal’s decision rests on a strict interpretation of the auction documentation. Upon reviewing the Sale Notice and the Letter of Intent, the Bench noted that the respondent participated in the bidding process with full disclosure of the risks. The court emphasized that the terms explicitly governed the transaction on an “AS IS WHERE IS”, “AS IS WHAT IS” and “WHATEVER THERE IS” basis, without any warranties or indemnities.

The court observed that the auction terms were not mere boilerplate provisions but essential conditions of the insolvency resolution process. In its reasoning, the bench cited the principle that such auctions necessitate independent due diligence by the buyer. By accepting the Letter of Intent unconditionally, the respondent took on the responsibility for navigating regulatory hurdles. As the court highlighted: “The sale... is sold on ‘As is where is basis’, ‘As is what is basis’, ‘Whatever there is basis’ and ‘No recourse basis’ and the sale does not entail transfer of any title except the title which the Corporate Debtor had on its assets as on date of transfer.”

The liquidator’s ongoing efforts to secure fresh NA permissions were deemed a cooperative gesture rather than a legal admission that the title was inherently flawed or that the payment obligation was conditional. The Tribunal underscored that the liquidator’s role is to facilitate, not to act as a guarantor for statutory clearances.

Ownership Structures and Land Access Hurdles

A critical factor in the dispute was the physical and legal interconnectedness of the three land parcels. The Mamlatdar of Silvassa had previously declined to recommend NA permissions for two of the parcels because the land providing access to them was recorded under a different entity name than the subject parcels themselves.

The Tribunal observed that the respondent’s failure to complete the acquisition of all three parcels exacerbated the legal impasse. By selectively purchasing only one parcel, the respondent created a situation where the ownership of the access path and the target properties remained fragmented. The court noted: “The transfer of these three parcels of land cannot be independent or severable transactions.” The Bench reasoned that the consolidation of all three parcels under the respondent’s ownership would, in fact, resolve the very ownership discrepancy cited by the authorities, thereby clearing the path for the required regulatory recommendations. This observation effectively dismantled the respondent’s argument that external regulatory delays justified the continued non-payment.

Final Deadline and Consequences of Non-Compliance

In exercising its inherent powers under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, and Rule 11 of the NCLT Rules, 2016, the Tribunal granted a final 30-day window for the respondent to rectify the payment default. This extension is conditional upon the payment of the principal balance along with accrued interest at 12% per annum from the original due dates, excluding a previously granted 90-day exclusion period.

The order serves as a stern warning regarding the finality of auction processes in liquidations. Should the respondent fail to comply with these financial directives, the Tribunal has ordered a comprehensive reversal of the entire transaction. This includes the cancellation of the previously issued sale certificate for the already transferred parcel, the requirement for the respondent to vacate the property within 30 days, and the forfeiture of the earnest money deposit (EMD) for all three parcels.

This decision provides significant clarity for liquidators handling complex assets, reinforcing that the statutory timelines defined under the Insolvency and Bankruptcy Board of India (IBBI) Liquidation Process Regulations are mandatory. It underscores that successful bidders cannot utilize the volatility of regulatory environments to delay payments or deviate from the auction’s foundational "as is" terms. The matter now awaits the respondent’s action by mid-November, determining whether the properties will be successfully integrated or if the assets will be returned to the liquidation estate for a fresh auction.