# In the matter of Lanco Babandh Power Limited

> NCLT judgment dated 2024-06-19. Citation: TCN-2024-NCLT-01140. The case involves an application filed by M/s Jindal Steel and Power Limited…

- **Court:** NCLT
- **Order date:** 19 Jun 2024
- **Citation:** TCN-2024-NCLT-01140
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lanco-babandh-power-limited-8e004501

## Summary

### Background

The case involves an application filed by M/s Jindal Steel and Power Limited ("Applicant/Successful Bidder") seeking a direction from the National Company Law Tribunal (NCLT) to the Liquidator of Lanco Babandh Power Ltd to refund the Earnest Money Deposit (EMD) of INR 2.5 Crore deposited for the auction of Block-C assets, along with applicable interest. The Corporate Insolvency Resolution Process (CIRP) was initiated against Lanco Babandh Power Ltd. on 29.08.2018, and liquidation proceedings commenced on 27.11.2019, with Mr. Sanjay Gupta appointed as Liquidator. The Liquidator invited bids for e-auction of the company's assets, and Jindal Steel and Power Limited emerged as the successful bidder for Block-C assets, depositing the EMD. However, the assets

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## Facts

On 29.08.2018, CIRP was initiated against Lanco Babandh Power Ltd. On 27.11.2019, liquidation proceedings were initiated, and Mr. Sanjay Gupta was appointed as Liquidator. The Liquidator invited bids for the e-auction of assets, and Jindal Steel and Power Limited bid for Block-C assets, depositing an EMD of INR 2.5 Crore. On 30.08.2021, the Liquidator informed the Applicant that it was the successful bidder and requested a 5% deposit by 01.09.2021. The Applicant, on 31.08.2021, informed the Liquidator that the Block-C assets were under litigation and withheld by the Customs Authority. The Liquidator supplied a copy of IA 939/2020 to the Applicant on 01.09.2021. The Liquidator had exchanged letters with the Customs Authority, but the assets were not released. The

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## Issues and analysis

### Issue 1: Whether the Applicant, Jindal Steel and Power Limited, is entitled to a refund of the EMD of INR …

**Ratio:** The legal principle is that a party is bound by the terms and conditions of a contract

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**Reasoning:** The court reasoned that the Applicant was fully aware of the pending litigations and the

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**Interpretation:** The interpretation of the e-auction document and the conduct of the parties

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**Application:** The ratio and reasoning apply directly to the facts of the case. The

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Jindal Steel and…
- **Respondents:** Lanco Babandh…; Mr Sanjay…

## Timeline

- **2018-08-29 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP)…
- **2019-11-27 — Liquidation Pr…**: Order for initiation of liquidation proceedings passed, and Mr. Sanjay Gupta appointed as…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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