Supreme Court Orders Status Quo Over ₹54 Crore Deposit In Moser Baer Solar Asset Auction

The Supreme Court on Thursday directed parties to maintain status quo in a dispute concerning the ₹54 crore deposit made by JFC Finance (India) Ltd. in the fresh auction of assets of corporate debtor Moser Baer Solar Ltd.

The dispute concerns whether the Liquidator can retain JFC's deposit until the successful bidder pays the entire sale consideration of ₹168 crore.

The NCLAT rejected the Liquidator's plea, holding that the condition in paragraph 56(iv) had been triggered once another bidder offered more than JFC's bid. Since the May 29 judgment had also been affirmed by the Supreme Court on July 17, 2026, the Tribunal held that the Liquidator was required to forthwith return JFC's ₹54 crore deposit.

A Bench of Justices S.V.N. Bhatti and N.V. Anjaria issued notice on the Liquidator's plea challenging the NCLAT order directing return of JFC's ₹54 crore deposit and directed that status quo be maintained in the meantime.

Solicitor General Tushar Mehta, appearing for the Committee of Creditors of Moser Baer, submitted that before the second auction, the Committee of Creditors had resolved that if the highest bidder was found ineligible or failed to pay the sale consideration, the next-highest bidder would be declared successful. He referred to the process document for the July 1 auction and submitted:

“In the event the successful bidder is unable to complete the transaction for whatever reason, the Liquidator reserves the right to call upon the next highest prospective bidder to complete the transaction.”

He further pointed out that the condition was incorporated into the auction process document and was available to all prospective bidders. According to him, JFC participated in the second auction with knowledge of the condition that the next-highest bidder could be called upon if the highest bidder failed to complete the transaction.

Mehta also referred to the earlier order under which JFC had been directed to deposit ₹54 crore as the upset price after claiming that it could not participate in the first auction because of difficulties in logging in. He submitted that the deposit was intended to secure JFC's participation in the fresh auction.

The Solicitor General argued that the situation contemplated by the auction conditions had to be considered in the event the ₹168 crore highest bidder failed to complete the transaction. He submitted that JFC, being the ₹167 crore second-highest bidder, could then be called upon to complete the transaction.

The Bench however, referred to the earlier direction requiring the ₹54 crore to be returned once another bidder surpassed JFC's bid and asked how that direction would operate alongside the subsequent auction conditions.

Senior Advocate Mukul Rohatgi, appearing for JFC Finance, submitted that his client's original inability to participate in the first auction had been accepted and that the ₹54 crore deposit was directed only to demonstrate its bona fides for the fresh auction.

“The auction took place. But there was one person, namely, the present respondent, JFC Finance. I could not log in and therefore I could not participate in the auction.”

Rohatgi submitted that JFC was thereafter permitted to participate in the fresh auction upon depositing ₹54 crore, which was the offset price.

He argued that the subsequent order expressly contemplated return of the deposit once another bidder offered more than JFC's bid. Referring to the relevant clause, he submitted:

“In the event the bid amount offered by any other bidder surpasses the bid offer of the appellant, the Liquidator shall forthwith return the amount of ₹54 crore deposited with it by the appellant.”

Rohatgi submitted that this condition had been triggered because the July 1 auction produced a higher bid of ₹168 crore against JFC's ₹167 crore bid.

“So in this auction, the highest bidder was ₹168 crore. But the bid amount of the appellant was ₹167 crore.”

He argued that the condition did not state that the Liquidator could wait for the highest bidder to complete the transaction before returning JFC's deposit.

“The said provision doesn't say that you wait for 90 days to see whether he actually pays.”

Rohatgi also submitted that the May 29 NCLAT order containing the direction for return of the deposit had subsequently been affirmed by the Supreme Court on July 17, 2026. He argued that the direction had therefore attained finality and could not be modified through the Liquidator's subsequent application.

The Bench questioned Rohatgi about the auction conditions contained in pages 146-147 of the process document and whether JFC had participated in the second auction with knowledge of those conditions.

The Bench further noted that the conditions were part of the process document shared with the bidders and asked how JFC's claim for return of the deposit could be considered contrary to the conditions under which it participated in the fresh auction.

The Court also clarified that it was not, at this stage, considering the broader claim concerning the ₹54 crore deposit, stating:

“Today, we are not even considering the argument of Mr. SG that ₹54 crore, I have a right in this fashion.”

The Bench said its limited consideration was the effect of JFC's participation in the second e-auction with knowledge of the relevant conditions.

After hearing the parties, the Bench issued notice and granted two weeks' time for filing the counter. It directed that status quo be maintained in the meantime and ordered completion of pleadings before the matter is taken up further.