Supreme Court: A liquidation-auction bidder who misses the payment deadline cannot get its deposit back
The question: Can a successful bidder in an IBC liquidation auction get a refund after failing to pay the balance price within the stipulated period?
The Supreme Court on 28 September 2026 dismissed an appeal by ASJ Finsolutions Pvt. Ltd., the successful bidder for a Haryana land parcel in a corporate liquidation auction, which had asked for a refund of the money it deposited after it failed to pay the balance price within the time allowed. A bench of Justices J.B. Pardiwala and K. Vinod Chandran (judgment by Justice Vinod Chandran) agreed with the National Company Law Appellate Tribunal that the forfeiture was a necessary consequence of the default under the e-auction notice. Lot No. 5, a parcel at Village Nangal Khurd, Tehsil Sonepat, with a reserve price of Rs 25.56 crore, was auctioned on 15 November 2021 in the liquidation of a company, under an e-auction notice of 25 October 2021. The notice said the sale was on an 'as is where is' basis and carried a note that a civil suit was pending over the sale deed of part of the land. The appellant bid at the reserve price and won. It paid Rs 6.39 crore, being 25 per cent of the bid, which included earnest money of Rs 2.55 crore and Rs 3.84 crore towards the balance. The balance of Rs 19.17 crore was due within 30 days, that is by 14 December 2021, or within 90 days with interest at 12 per cent, that is by 14 February 2022. The day after the 30 days ended, the appellant e-mailed the liquidator that it would pay by 14 February 2022 with interest, but it did not pay. On 11 February 2022 it asked the NCLT for the earlier title deeds, and that application was rejected on 31 March 2023, with an appeal dismissed on 21 April 2023. While its writ petition in the Punjab and Haryana High Court was pending, the property was re-auctioned for Rs 31.10 crore, which is Rs 5.54 crore more than the appellant's bid. After the High Court rejected its prayer but left it free to pursue other remedies, the appellant sought to annul the forfeiture of its earnest money and get a refund. The NCLT allowed that, the NCLAT reversed it, and the appellant came to the Supreme Court.