The Supreme Court has held that the absence of an express forfeiture provision in the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 is not decisive where the e-auction notice specifically permits forfeiture upon failure to pay the balance sale consideration.
The Court accordingly upheld the forfeiture of ₹6.39 crore, comprising the Earnest Money Deposit and part of the sale consideration voluntarily paid by the successful bidder.
The Court was hearing an appeal by the successful bidder against an NCLAT order that reversed the National Company Law Tribunal’s direction to refund the forfeited amount deposited towards the purchase of an immovable property sold during liquidation under…