Delhi High Court Dismisses Petition Against Liquidator On Jurisdiction Grounds

Delhi High Court Dismisses Petition Against Liquidator On Jurisdiction Grounds

The Court agreed that any dispute arising out of or concerning the E-Auction Process shall be subject to the exclusive jurisdiction of the Adjudicating Authority, courts and tribunals at Allahabad

The Delhi High Court dismissed a petition against the Respondent – Liquidator which was filed for seeking to revise or extend the timelines prescribed for the e-auction sale of Old Edible Oil Stock of JVL Agro Industries Ltd which was scheduled on 24 June 2021, on grounds of jurisdiction.

The matter titled as ABRJ Foods Pvt Ltd Vs. Supriyo Kumar Chaudhuri Liquidator JVL Agro Industries Ltd. & Ors, was placed before a single-judge Court of Justice Jasmeet Singh.

The factual scenario of this matter is that JVL Agro Industries Ltd is currently undergoing liquidation and E-Auction was announced vide public announcement dated 14 June 2021 by inviting bids for sale of old edible oil stock of JVL Agro Industries Ltd. The Petitioner – ABRJ Foods Pvt Ltd was a potential buyer of the oil inventory since the Petitioner – a company is in the business of distribution and trade of edible oil as well as other products and it is actively operating in the State of Uttar Pradesh and Delhi.

It was submitted by the Petitioner before the Court that it is impossible for the Petitioner to effectively participate in the bid because the Respondent – Liquidator had notified such restrictive and limiting timelines for the E-Auction. The Petitioner further submitted that no realistic time was provided to bidders to travel to Haldia where the stock is stored in order to inspect it. It was also prayed by the Petitioners to issue necessary guidelines or regulations for Liquidators under Section 196(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) for regulating the process of sale of assets during the Liquidation Process so as to deter Liquidators from issuing unreasonable terms, conditions and timelines of sale.

However, the Court's attention was drawn to Clause 6.13 of the E-Auction Process Document by the Respondent, which stipulates the governing law and jurisdiction of this process which specifically states that any dispute arising out of or in relation to the E-Auction Process Information Document or the E-Auction Process shall be subject to the exclusive jurisdiction of the Adjudicating Authority, courts and tribunals at Allahabad, India.

Therefore, the judge dismissed the petition due to the clear jurisdiction of Allahabad Courts as laid down in the Clause 6.13 of the E-Auction Process Document.