NCLT Can Order Forfeiture of Entire Deposit if Purchaser of Liquidation Assets Defaults in Payments — Supreme Court

This article explains a Supreme Court ruling that the National Company Law Tribunal (NCLT) can order forfeiture of the entire deposit paid by a purchaser of liquidation assets if the purchaser defaults on payment obligations. The Court observed that allowing forfeiture serves the interests of creditors and upholds the credibility of the insolvency resolution process. The judgment clarifies powers of the NCLT and reinforces that bidders must comply with payment schedules, failing which strict consequences may follow, thereby enhancing certainty and confidence in the asset-sale mechanism under the Insolvency and Bankruptcy Code.