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Delhi HC dismisses Writ Petition seeking extension of timeline for E-Auction Sale of Corporate Debtor under Liquidation as it lacked jurisdiction to entertain the same

Delhi HC dismisses Writ Petition seeking extension of timeline for E-Auction Sale of Corporate Debtor under Liquidation as it lacked jurisdiction to entertain the same

A Single Judge Bench of the Hon’ble Delhi High Court in the matter of ABRJ Foods Private Limited v. Supriyo Kumar Chaudhuri Liquidator Jvl Agro Industries Limited and Others, REED 2021 Del 06573,  dismissed a writ petition seeking (a) to revise/extend the timelines prescribed for the e-auction sale of Old Edible Oil Stock of JVL Agro Industries Ltd (Corporate Debtor) under Liquidation, scheduled on 24 June 2021; or (b) direction to the Respondent No.2 to issue necessary guidelines/regulations for Liquidators under Section 196(1) of the IBC for regulating the process of sale of assets during Liquidation Process so as to deter Liquidators from issuing unreasonable terms, conditions and timelines of sale.


The primary ground of challenge by the Petitioner was that e-auction has been announced vide public announcement dated 14 June 2021 by inviting bids for sale of old edible oil stock of Corporate Debtor which is under liquidation. The Petitioner who is a potential buyer of the oil inventory stated that it was actively operating in the State of Uttar Pradesh and Delhi and is in the business of distribution and trade of edible oil and other products. The Petitioner was aggrieved as the Liquidator had notified such restrictive and limiting timelines for the e-auction in such a way that it was impossible for the Petitioner to effectively participate in the bid. The Petitioner further argued that its stock is stored at Haldia, West Bengal and no realistic time has been provided to bidders to travel to Haldia and inspect the stock.


The Respondents referred to E-Auction Process Document and more particularly, Clause 6.13 which provides that the E-Auction Process Information Document, the auction Process and other documents pursuant to the E-Auction Process Information Document shall be governed by the laws of India and any dispute arising out of or in relation to the E-Auction Process Information Document or the E-Auction Process shall be subject to the exclusive jurisdiction of the Adjudicating Authority, courts and tribunals at Allahabad, India. It was further submitted by the Respondents that there are adequate guidelines and regulations under the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.


The Delhi High Court agreed with the submission of Respondents and stated that it was clear from terms of Clause 6.13 of E-Auction Process Document that Allahabad Court had the jurisdiction to entertain the present writ petition and accordingly, it refused to entertain the writ petition and dismissed the same.

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