Section 74 of Indian Contract Act, 1872 has no application in the case of Auction conducted by the Liquidator under the IBC Liquidation Process Regulations, 2016 and When the clauses of Tender document clearly empowers Liquidator to forfeit the EMD/any payment on default by the H1 Bidder, no exception can be taken to the action of the Liquidator in cancelling the sale and forfeiting the amount deposited by H1 Bidder – Westcoast Infraprojects Pvt. Ltd. Vs. Mr. Ram Chandra Dallaram Choudhary, Liquidator of Anil Ltd. – NCLAT New Delhi
In this landmark judgment, NCLAT held that (i) It is also relevant to notice that Liquidator is statutorily entitled to fix the terms and conditions of sale. (ii) Section 74 of the Indian Contract Act has no application in the case of Auction conducted by the Liquidator under the Liquidation Process Regulations, 2016. (iii) When the clauses of the Process Document as noted above, clearly empowers the Liquidator to forfeit the EMD and any payment made in event default is committed by the Highest Bidder, no exception can be taken to the action of the Liquidator in cancelling the sale and forfeiting the amount deposited by the Appellant.
