Nagpur-based Zqube Infracon has sought “appropriate orders” from the Kolkata Bench of NCLT to direct the RBI-appointed administrator looking into the corporate insolvency resolution process of Srei Infrastructure and Srei Equipment Finance to complete the necessary formalities for transferring the title of the property in which Zqube Infracon had emerged as the highest bidder.

According to the counsel appearing on behalf of Zqube Infracon, the company was declared as the highest bidder for the commercial property in Powai, Mumbai, after an e-auction was held on August 11 for the property, which had been mortgaged to Srei Infrastructure Finance (SIFL). SIFL had engaged iQuippo as the auctioneer to conduct the e-auction to sell the property, whose owner is Supreme Infrastructure India. Digital marketplace iQuippo is a Kanoria Foundation initiative.

Low turnout

The reserve price for the property was fixed at ₹15 crore. The applicant had to submit an earnest money deposit of ₹1.5 crore which was to be later adjusted against the final bid value. As per the sale catalogue, the letter of award was to be issued within one week of bid closure and the agreement of sale along with the balance payment was to follow subsequently.

However, the company was later informed that since the response (for e-auction) was low, Srei did not want to go ahead with the sale and has cancelled its bid.

No refund made

“The respondents failed to provide any substantial justification whatsoever for cancellation of bid. Thereafter, despite being aggrieved, the applicant asked for refund of the earnest money…… However, neither was the money refunded nor was there any response,” Zqube said in its application.

“The present application is being filed seeking appropriate orders from the adjudicating authority to direct Srei Infrastructure and Srei Equipment Finance through their respective administrators to complete the necessary formalities for transferring the title of the property in favour of the applicant immediately upon payment of balance sale consideration,” Zqube said.

Insolvency proceedings

It is to be noted that the Reserve Bank of India had on October 4 superseded the boards of Srei Infrastructure Finance and Srei Equipment Finance owing to governance concerns and defaults by the companies in meeting their various payment obligations. The Kolkata Bench of the NCLT had also admitted applications for initiating insolvency proceedings against the two companies and appointed Rajneesh Sharma as the administrator.