M/S ASJ FINSOLUTIONS PVT. LTD. v. VIKRAM BAJAJ JUDGMENT

2026 INSC 1062 Non-Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal No.13023 of 2025

M/S ASJ FINSOLUTIONS PVT. LTD. ...Appellant(s)

Versus VIKRAM BAJAJ ...Respondent(s) JUDGMENT

K. VINOD CHANDRAN, J.

The appellant is the successful bidder in an auction

conducted in the liquidation process initiated by the Resolution

Professional (RP) appointed under the Insolvency and

Bankruptcy Code, 20161, aggrieved with the impugned order of

the National Company Law Appellate Tribunal (NCLAT), which

reversed the order of the National Company Law Tribunal

(NCLT) and affirmed the forfeiture of Earnest Money Deposit

(EMD) for reason of the successful bidder having not paid the

Signature Not Verified balance sale consideration within 90 days. Digitally signed by VISHAL ANAND Date: 2026.09.28 18:35:39 IST Reason:

1 Hereinafter referred to as ‘IBC’ CA No. 13023 of 2025 Page 1 of 15

2. We heard Ms.Meenakshi Arora, learned Senior Counsel

for the appellant and Mr. Abhishek Anand, learned Counsel for

the respondent-Resolution Professional (RP) of the Corporate

Debtor (CD).

3. The subject property; Lot No.5-measuring 68K, 17M

situated at Village Nangal Khurd Tehsil, Sonepat, Haryana, with

a reserve price of Rs.25.56 crores was auctioned along with

many other properties owned by the CD, through an e-auction

notice for sale dated 25.10.2021. On the background facts,

suffice it to notice that an Operational Creditor had approached

the NCLT under Section 9 of the IBC. After admitting the CP, an

Interim Resolution Professional (IRP) was appointed and later,

the first respondent, as the RP. Despite expression of interest

having been received by the IRP, none submitted a Resolution

Plan. After replacement of the IRP by the RP, time was extended,

within which, no Resolution Plan came to be filed, in which

circumstance, a liquidation was proposed and approved by the

NCLT. A suspended Director approached the NCLAT against the

order of liquidation, which was dismissed by the NCLAT. Public

notice was taken out and even according to the appellant with

respect to Lot No.5, it was specifically indicated in a Note that CA No. 13023 of 2025 Page 2 of 15

there was a civil suit pending, regarding the sale deed of the

land pertaining to 6M and the Liquidator was filing an application

for obtaining the custody of the same. The sale was also on an ‘as

is where is’ basis and the appellant bid at the reserve price and

succeeded.

4. At the time of bidding, the appellant, as required under

the E-Auction Notice, had furnished EMD. The auction was

conducted on 15.11.2021 and within 30 days i.e., by 14.12.2021,

the balance was to be remitted. There was also a further

provision for remitting the balance within 90 days from the date

of auction, provided interest is paid @12% per annum. The 90

days period would have expired on 14.02.2022. Admittedly on

15.12.2021, the appellant e-mailed the RP, specifically indicating

their intention to pay the balance of Rs.19.17 crores within

14.02.2022, with interest @12% per annum.

5. Later noticing an order obtained by one M/s Agarwal

Trading Company, from the Punjab & Haryana High Court at

Chandigarh, wherein the writ petition, though, rejected, there

was a direction to approach the NCLT, Chandigarh Bench, for

seeking appropriate relief. The High Court had also directed that

no sale deed was to be executed by the Liquidator herein, since CA No. 13023 of 2025 Page 3 of 15

M/s Agarwal Trading Company was granted time till 14.02.2022;

which was the last date to make the full payment, of the balance

sale consideration with 12% interest, as applicable to the

appellant. M/s Agarwal Trading Company, concerned with the

very same Lot No.5 filed an application before the NCLT on

11.02.2022 and withdrew the same on 22.09.2022.

6. The appellant admittedly did not pay the balance sale

consideration and is said to have sought for the prior deeds with

respect to the property on 11.02.2022, by Company Application

No.85 of 2022 before the NCLT, which was rejected on

31.03.2023. An appeal filed, also stood dismissed by order dated

21.04.2023 which was challenged in a Writ Petition before the

Punjab and Haryana High Court. While the writ petition was

pending, fresh auction of the subject property took place and the

same was sold for a price of Rs.31.10 crores; Rs.5.54 crores in

excess of the bid of the appellant. The High Court subsequently

rejected the prayer of the appellant for prior deeds and reserved

liberty to the appellant to avail remedies as available in

accordance with law.

7. Banking on the said liberty reserved, the appellant again

initiated proceedings before the NCLT seeking annulment of CA No. 13023 of 2025 Page 4 of 15

forfeiture of EMD and refund of the same. The NCLT allowed it,

which was reversed by the NCLAT, which order is impugned

herein.

8. Learned Senior Counsel for the appellant contended that

as per the Insolvency and Bankruptcy Board (Liquidation

Process) Regulations, 20162, specifically Schedule I, there was

no stipulation of forfeiture of EMD. In fact, the Schedule

specifically stipulates that there can be only 10% of the

estimated value demanded as EMD. It is further argued that

there were other bidders, who were granted extension of time

beyond the 90 days by the NCLT and the appellant was

discriminated. It is also pointed out that the NCLT specifically

looked at the Triple Test as propounded by this Court and found

the same in favour of the appellant, thus, resulting in the

direction to refund. It is argued, placing reliance on Authorised

Officer, Central Bank of India v. Shanmugavelu3, that therein

the forfeiture was found to be a statutory imprimatur under the

Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002, which being absent

in the present case, the forfeiture itself is wrong. If at all, without

prejudice to the arguments addressed, the learned Senior

Counsel for the appellant submits, if the forfeiture is approved,

then it can be only of 10% of the reserve price of the property.

9. Learned Counsel for the respondent-RP, however, points

out that the appellant very well knew about the dispute with

respect to the sale deed of the property and with open eyes, bid

at the auction. The EMD as per the auction notice was only 10%

of the reserve price. The 25% deposit was including a portion of

the balance sale consideration, as required by the Liquidator;

which was complied without any protest. The appellant cannot

be allowed to turn around and rely on the statutory regulations

to raise arguments against the forfeiture of amounts deposited

including the EMD, on failure to deposit the balance amounts,

since it is a condition in the e-auction notice.

10. It is pointed out that if the appellant had deposited the

amounts and there was any difficulty in handing over the

possession and ownership, definitely the appellant would have

had the remedy of seeking refund with interest. As of now, a

third-party who succeeded in a subsequent auction, has been

inducted into the property and there was no difficulty expressed CA No. 13023 of 2025 Page 6 of 15

by that third-party in taking over ownership and possession. The

forfeiture was a specific term in the e-auction notice and none

can resile from it. The order of the NCLT on the Triple Test is

against the order of the NCLT and the NCLAT in the earlier

round; when the request of prior deeds was declined,

specifically finding default on the appellant, leading to

cancellation of the bid. When cancellation has been upheld,

there is no question of raising contentions against the forfeiture,

which is a necessary consequence.

11. That the appellant who was the successful bidder did not

pay the balance sale consideration within the initial 30 days or

with 12% interest within 90 days, is admitted. What remains is

only the consideration as to whether the refusal was bona fide,

especially in the circumstances as pointed out by the appellant.

We see from Schedule I of the Liquidation Process Regulations

that there is a stipulation that EMD should not be more than 10%;

brought in on 30.09.2021 and there is no forfeiture expressly

provided, in the event of failure to pay the balance sale

consideration. As pointed out by the learned Counsel for the

respondent, the terms are explicit in the Tender Notice and the

appellant, with open eyes, bid in auction as also deposited the CA No. 13023 of 2025 Page 7 of 15

amounts demanded without any protest. Having deposited 10%

of the reserve price, along with a portion of the balance sale

consideration, which itself is an undertaking to pay the balance

amounts within a period of 30 days or 90 days with interest,

brings in the consequences of forfeiture, on failure; which is

automatic.

12. In the present case, the bidder had specifically sent an e-

mail just one day after the 30-day period was over, undertaking

to pay the balance amounts with interest due before the 90th day.

A request was made for prior deeds, which, in any event, was not

permissible at that distance of time, since the auction notice was

issued on an ‘as is where is’ basis and it specifically indicated the

non-availability of sale deeds with respect to a portion of the

property. The appellant having not sought for verification of title

deeds before the bid was made or the EMD was deposited,

cannot project it as a requirement to resile from payment of the

balance sale consideration. The argument of absence of

stipulation of forfeiture, in the regulations also falls flat in the

wake of the specific condition in the auction notice, which made

forfeiture an inevitable consequence on failure to deposit the

balance sale consideration. CA No. 13023 of 2025 Page 8 of 15

13. The NCLT also specifically noticed and extracted the

condition in the auction notice, which threatened forfeiture of the

EMD and any other amounts deposited, if the successful bidder

fails to pay the balance sale consideration as per the terms of the

sale. However, the NCLT relied on the decisions of this Court and

found the Triple Test to be satisfied in the case of the appellant.

The Triple Test propounded is with respect to the bidder having:

(i) acted with a hidden agenda to rig the auction; (ii) turned out

to be not a genuine bidder with adequate financial capacity; or

(iii) been prevented by any extraneous reasons from making full

payment of the balance sale consideration.

14. The NCLT found that in the forfeiture communication,

there was no hidden agenda mentioned and in the facts and

circumstances coming out from the case, there is nothing to show

the mala fide intention of the appellant to frustrate the auction

process. Insofar as the financial capacity, the NCLT referred to

the e-mail communication dated 15.12.2021, where the appellant

had promised to pay the balance sale consideration within

14.02.2022 and the offer made by the appellant even after

dismissal of the appeal by the NCLAT, to make the payment with

interest. As to any extraneous considerations, the direction in the CA No. 13023 of 2025 Page 9 of 15

writ petition filed by M/s Agarwal Trading Company, was found

to have given the appellant a bona fide reason not to make a

deposit.

15. The NCLAT disagreed with the order of the Tribunal and

we agree with such disagreement expressed. The NCLAT

specifically noticed the Note with respect to the sale deed of the

land covered by Lot No.5, explicitly mentioned in the auction

notice and the forfeiture clause on failure of the successful

bidder to pay the balance sale consideration within the time

stipulated. The NCLAT found that in the earlier round, the

appellant had sought for prior sale deeds of the subject property

and it was categorically found that the appellant had wilfully

defaulted in the payment of the balance amount of Rs.19.17

crores within the stipulated period. Especially considering the

fact that the liquidation proceedings are strictly timebound and

sufficient time had already elapsed from the default in payment.

The NCLAT in its earlier order also blamed the appellant for not

making the balance payment within the stipulated time, which

was found to be a wilful default on the part of the appellant. The

contention of the appellant that merely because the cancellation

CA No. 13023 of 2025 Page 10 of 15

of the bid was upheld, that would not affect refund of EMD,

cannot at all be countenanced.

16. Looking at the specific clause threatening forfeiture on

failure of payment of balance sale consideration, on cancellation,

forfeiture is a necessary consequence and there is no application

of the Triple Test, on facts herein, to absolve the appellant from

such forfeiture. The mere failure to make the balance sale

consideration was to rig the auction proceedings, in which

circumstance, admittedly, there was a fresh auction proposed

and there was a higher value received on such auction. The

higher value received is only because of the inherent value of

the property and is not in set off, of the expenses incurred. The

proof of financial capacity, is not in the repeated communications

agreeing to pay the money, but should be insofar as materials

produced substantiating the capacity and not mere assertions

made. In fact, the assertion made, specifically by an e-mail

communication, also emphasized by the NCLAT, was long prior

to the expiry of the 90 days, at which point, the appellant was

aware of the cloud over the sale deeds. There was no query

made as to the verification of sale deeds any time during the bid

CA No. 13023 of 2025 Page 11 of 15

process which, in any event, was not possible at a later point of

time, that too, just prior to the date of full deposit.

17. The extraneous consideration pointed out by the

appellant is just an afterthought. M/s Agarwal Trading Company,

based on the directions in the writ petition, merely filed an

application and withdrew the same, a little later. The fallacy of

the claim is evident from the facts, and this is merely projected

as an excuse to scuttle the process of auction and to absolve the

appellant from the liability to pay the balance sale consideration.

18. The appellant also has an argument with respect to

discrimination insofar as another auction purchaser having

been granted time to deposit the balance sale consideration,

which benefit was not given to the appellant. For one, this was

a contention, the appellant could have taken at the first instance

when the proceedings were initiated before the NCLT for

supply of prior deeds which travelled upto the High Court and

attained finality on the rejection of the prayer made. Again,

none of the orders were produced before us for the respondent

to respond on the same. The orders have been produced along

with the written submissions which we are not inclined to look

into. In any event, as we found, it is too late in the day for the CA No. 13023 of 2025 Page 12 of 15

appellant to raise a contention of discrimination, especially

when, but for the assertion of willingness to pay, there is nothing

produced to substantiate the capacity to pay the balance

consideration, as on the last date.

19. Be that as it may, one contention raised by the learned

Senior Counsel for the appellant is that under Schedule I of the

Regulation of 2016, it is specifically provided that the EMD shall

not exceed 10% of the reserve price. The respondent relies on

the decision in Westcoast Infraprojects Private Limited v. Mr.

Ram Chandra Dallaram Choudhary4 and Potens

Transmission & Power Pvt Ltd v. Apex Buidlsys Ltd (In

Liquidation)5, which decisions have been affirmed by this

Court respectively in Civil Appeal No.4087 of 2023 and Civil

Appeal No.4116 of 2022. Westcoast Infraprojects Private

Limited4 approved by this Court in a Civil Appeal, upheld the

forfeiture, as per the clause in the e-auction notice, of both the

EMD and any other deposit made by the bidder, in the event of

the failure of the successful bidder to pay on time the balance

sale consideration.

20. The respondent points out from Annexure R12, that in

fact, the EMD stipulated was only Rs.2.55 crores which is only

10% of the reserve price of Rs.25.56 crores for Lot No.5. The

Liquidator, vide email dated 15.11.2021 informed the appellant

that against the total bid of Rs.25,56,00,000/-, 25% of the bid

amount amounting to Rs.6,39,00,000/- which included Rs.2.55

crores EMD and a portion of the balance consideration coming

to Rs.3.84 crores, were to be deposited by 16.11.2021.

21. In this context, we also have to observe that hence the

payment was made of Rs.6.39 crores without demur and the e-

auction notice specifically contained the following clause:

The entire amount paid by the applicant/bidder including the Earnest Money Deposit can be forfeited at any time, upon the occurrence of any of the following events; I. xxx xxx xxx xxx II. xxx xxx xxx xxx III. If the bidder(S) is/ are identified as the Successful Bidder(S) and fails to pay balance sale consideration as per terms of the sale. IV. xxx xxx xxx xxx

22. The appellant having paid the money voluntarily and the

terms and conditions stipulated in the e-auction notice having

provided for the entire amount paid by a successful bidder,

including EMD to be forfeited, if he fails to pay the balance sale CA No. 13023 of 2025 Page 14 of 15

consideration as per the terms of the sale, there is no reason to

order refund. We find no reason to interfere with the impugned

order.

23. The appeal is hence dismissed.

24. Pending application(s), if any, shall stand rejected.

.......…….……………………. J. (J. B. PARDIWALA)

....……….……………………. J. (K. VINOD CHANDRAN)

NEW DELHI; SEPTEMBER 28, 2026.

CA No. 13023 of 2025 Page 15 of 15