In Brief
Eva Agro Feeds, the sole bidder in an e-auction for assets of an insolvent feed company, submitted a bid matching the reserve price and received a congratulatory email confirming its win. However, the Liquidator cancelled the auction without reasons, hoping for a better price in re-auction. The National Company Law Tribunal directed the Liquidator to proceed; the Appellate Tribunal reversed this. The Supreme Court held that the Liquidator must apply reasoned mind to reject the highest bid—mere hope of higher prices is no justification. Furnishing reasons is a principle of natural justice, not a post-2021 novelty. Further, a bidder cannot be disqualified as 'related party' based on a director's past (13-year-old) association with the debtor company. The Court allowed the appeal, restoring the Tribunal's order, finding no absolute discretion vested in the Liquidator to cancel valid auctions.
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