Authority: National Company Law Tribunal, Mumbai Bench Court III

Order Date: 06.07.2026

Case Overview

The National Company Law Tribunal (NCLT) Mumbai heard IA 2447/2021 filed by Rudra Construction Co., a partnership firm, against Om Prakash Agarwal (Liquidator of S Kumars Nationwide Ltd) and MP Industrial Development Corporation Limited. The application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, in the matter of IDBI Bank Ltd (Financial Creditor) vs S Kumars Nationwide Ltd (Corporate Debtor).

S Kumars Nationwide Ltd was admitted to Corporate Insolvency Resolution Process (CIRP) on 24.04.2018 and subsequently entered liquidation on 19.06.2019. The liquidator conducted an e-auction on 02.03.2021 for the sale of Amana Mill (Lot No. 2), consisting of leasehold land admeasuring 33,996.80 sq. mt. and building with constructed area of 15,384 sq. mt. Rudra Construction emerged as the successful bidder with a bid of Rs 7.65 crore and paid an Earnest Money Deposit of Rs 35 lakh.

The Letter of Intent (LoI) dated 04.03.2021 required the applicant to pay 10% of the sale consideration (Rs 81 lakh) within 7 days and the balance amount (Rs 6.94 crore after adjusting EMD and 10% payment) within 30 days from the LoI date, with payments after 30 days attracting interest at 12% per annum. However, the applicant could only complete the entire payment by 15.09.2021 - 194 days beyond the 30-day deadline.

The liquidator demanded interest of Rs 31,71,058 for the delayed payment via email dated 23.09.2021. The applicant sought waiver of this interest, citing COVID-19 lockdowns that affected their business operations, and invoked Regulation 47A of the IBBI (Liquidation Process) Regulations, which excludes the lockdown period from timeline computations.

During proceedings, the applicant withdrew their prayers regarding lease restoration and possession certificate issuance after MPIDC restored the lease of the property.

Final Outcome

The NCLT dismissed the application, upholding the liquidator's demand for Rs 31,71,058 in interest. The tribunal acknowledged that COVID-19 lockdowns justified extending timelines under Regulation 47A but ruled that interest payment obligations under commercial contracts could not be waived. The bench noted that the corona curfew in Guna district was imposed on 14.04.2021, which was already after the initial 30-day payment period had expired on 04.04.2021. The tribunal cited the Supreme Court's judgment in V.S. Palanivel vs P. Shriram Cs Liquidator, which affirmed the mandatory nature of liquidation process timelines under Regulation 33 of the IBBI Regulations.

Topics: Insolvency Proceedings, Auction Sale Dispute, COVID-19 Impact