# In the matter of BS Limited IA No. 152-HDB-2021 in CP (IB) No. 278-HDB-2018

> NCLT judgment dated 2023-06-30. Citation: TCN-2023-NCLT-02742. The case involves an application filed by Mr. Abhishek Agarwal, the applicant, who was the…

- **Court:** NCLT
- **Order date:** 30 Jun 2023
- **Citation:** TCN-2023-NCLT-02742
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bs-limited-ia-no-152-hdb-2021-in-cp-ib-no-278-hdb-2018-82c687bb

## Summary

### Background

The case involves an application filed by Mr. Abhishek Agarwal, the applicant, who was the successful bidder in an e-auction conducted by the Liquidator Respondent for the assets of the Corporate Debtor, BS Ltd. The applicant sought to cancel the sale of land due to the land falling under a buffer zone where construction is restricted as per GO No.33 dated 24th January, 2013. The applicant also requested a refund of the Earnest Money Deposit (EMD) of Rs. 90 lakhs. The National Company Law Tribunal (NCLT) had admitted the Corporate Debtor into the Corporate Insolvency Resolution Process (CIRP) on 01.11.2018. The Resolution Plan was rejected by the Committee of Creditors, leading to the liquidation of the Corporate Debtor and the appointment of a Liquidator. An e-auction

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## Facts

Mr. Abhishek Agarwal participated in an e-auction conducted by the Liquidator of BS Ltd. He was declared the successful bidder and deposited an Earnest Money Deposit (EMD) of Rs. 90 lakhs. The e-auction was for a piece of land. After the auction, the applicant discovered that the land fell under a buffer zone where construction is restricted as per GO No.33 dated 24th January, 2013. The applicant requested a refund of the EMD and cancellation of the sale. The liquidator had been aware that the Corporate Debtor was admitted into CIRP on 01.11.2018. The Resolution Plan was rejected, leading to liquidation. The liquidator argued that the sale was on an 'as is where is basis' and that the applicant should have conducted due diligence. The applicant contended that the

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## Issues and analysis

### Issue 1: Whether the applicant is entitled to a refund of the Earnest Money Deposit (EMD) given the …

**Ratio:** The principle of fairness and transparency in liquidation proceedings requires the

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**Reasoning:** The court reasoned that the liquidator was aware of the land being in a prohibited list

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**Interpretation:** The interpretation emphasizes the duty of the liquidator to act in good faith

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**Application:** In this case, the liquidator's failure to disclose the land's restrictions led

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## Parties

- **Judges:** TELAPROLU…; SH. CHARAN…
- **Appellants:** Abhishek A…
- **Respondents:** BS L…; Mr.Yedavilli Sai…

## Timeline

- **2018-11-01 — Admission in…**: The National Company Law Tribunal admitted the Corporate Debtor (BS Ltd) into the…
- **2019-07-23 — Rejection of Resolution…**: The 11th Committee of Creditors meeting rejected the Resolution Plan submitted by the…

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