Case Details

Case Name: M/s Raghava Square Private Limited vs M/s IVRCL Limited & Others

Parties: Appellant - Raghava Square Private Limited (Successful Bidder of IVRCL Ltd); Respondents - IVRCL Limited (in liquidation), Sutanu Sinha (Liquidator), and 27 financial creditors including ICICI Bank, SBI, Union Bank, IDBI Bank, Canara Bank, and others

Court/Authority: National Company Law Appellate Tribunal, Chennai

Case Numbers: Company Appeal (AT) (CH) (Ins) No.93/2025, 96/2025, 309/2024, 310/2024

Date of Judgment: 09/06/2026

Period of Dispute: The dispute arose from the 3rd e-auction conducted on 15/12/2021 and subsequent events leading to cancellation of sale on 28/07/2023

Parties Involved

Petitioner: M/s Raghava Square Private Limited, represented by Mr. Pongulati Prasad Reddy, successful bidder in IVRCL liquidation

Respondents:

  • M/s IVRCL Limited (Corporate Debtor under liquidation)
  • Mr. Sutanu Sinha, Chairman of Supervisory Committee-cum-Liquidator
  • 27 Financial Creditors including ICICI Bank, State Bank of India, Union Bank of India, IDBI Bank, Canara Bank, IndusInd Bank, International Asset Reconstruction Company, Standard Chartered Bank, Indian Overseas Bank, Tata Capital, Bank of India, Emirates Islamic Bank Dubai, LIC, Assets Care & Reconstruction Enterprise Ltd, Barclays Bank, Axis Bank, Karur Vysya Bank, SREI Equipment Finance, EXIM Bank, Punjab & Sind Bank, Tamilnad Mercantile Bank, DBS Bank, Scotia Bank, HDFC Bank, Bank of Baroda, Kotak Investment, and IFCI Limited

Issues / Allegations / Violations

  • The core issue was whether Raghava Square's business plan submitted during the auction process included assets of IVRCL's subsidiaries, joint ventures, and associates
  • Raghava Square claimed its Rs 1200 crore bid was based on inclusion of subsidiary assets covering approximately 1670 acres of land
  • The liquidator and financial creditors contended the auction was only for IVRCL Limited's assets under liquidation, not including subsidiaries
  • Alleged violation of Section 36(4)(d) of IBC which excludes assets of subsidiaries from liquidation estate
  • Dispute over cancellation of auction sale and forfeiture of Rs 150 crore (Rs 50 crore EMD + Rs 100 crore additional payment) for non-payment of balance Rs 1050 crore

Findings & Observations

  • The NCLAT found that the 3rd e-auction notice dated 20/11/2021 was exclusively for "sale of M/s IVRCL Limited" only
  • The tribunal observed that the bidding document clearly stated sale was on "as is, where is basis", "as is what is basis", "whatever there is basis" and "no recourse" basis
  • The appellate tribunal held that assets of subsidiaries cannot form part of liquidation estate under Section 36(4)(d) of IBC
  • The NCLAT found that orders dated 15/06/2022 and 25/07/2022 did not approve the business plan but only provided payment schedule
  • The tribunal observed that the business plan concept was not contemplated under liquidation regulations
  • It was found that Raghava Square had accepted the terms of payment schedule but tried to resile later by raising the subsidiary assets issue

Penalties / Settlements / Directions

  • The NCLAT upheld the cancellation of the auction sale dated 28/07/2023
  • However, the tribunal directed refund of Rs 150 crore deposited by Raghava Square within 15 days
  • The forfeiture of Rs 150 crore was held to be contrary to law
  • The appellate tribunal dismissed all four appeals filed by Raghava Square
  • The matter was referred to the Hon'ble Chairperson, NCLAT for resolution of difference of opinion on the forfeiture issue

Corrective Actions & Future Obligations

  • The liquidator was directed to refund Rs 150 crore to Raghava Square within 15 days
  • The tribunal clarified that financial creditors are free to pursue recovery from subsidiary assets under SARFAESI Act
  • The judgment establishes precedent that subsidiary assets cannot be included in liquidation estate of holding company
  • The ruling emphasizes strict adherence to bidding document terms in liquidation auctions

Final Ruling & Enforcement

  • All four company appeals (93/2025, 96/2025, 309/2024, 310/2024) were dismissed
  • The NCLAT upheld the NCLT's finding that the business plan was never approved
  • The cancellation of auction sale was held to be valid but forfeiture of money was illegal
  • The refund direction is immediately enforceable
  • The judgment clarifies the scope of liquidation estate under Section 36 of IBC