The Supreme Court on Wednesday directed the refund of ₹150 crore deposited by Raghava Square Private Limited in connection with the liquidation auction of IVRCL Limited, while permitting it to participate in the fresh auction process.

A Bench of Justice B.V. Nagarathna and Justice Joymalya Bagchi disposed of the appeals after hearing Senior Advocate Abhishek Manu Singhvi for Raghava Square, who argued that the bidder had been placed in an impossible commercial situation after emerging as the sole successful bidder in the third auction conducted for IVRCL’s assets.

The dispute traces back to the liquidation of IVRCL Limited. After two failed auctions, Raghava Square emerged as the successful bidder with a bid of approximately ₹1,200 crore and deposited ₹150 crore. It was submitted that the bid was made on the understanding that IVRCL’s 100% shareholding in a subsidiary company formed part of the assets being acquired. However, while the sale process remained pending, assets of the subsidiary allegedly began to be sold by lenders and other stakeholders, thereby diminishing the value of the subsidiary and, consequently, the value of the shares which Raghava Square expected to acquire.

Mr Singhvi contended that his client never sought ownership of the subsidiary’s assets directly but objected to the subsidiary being “hollowed out” while the auction purchaser was awaiting completion of the transaction. He further argued that Raghava Square had repeatedly expressed willingness to pay the balance consideration of nearly ₹950 crore and had even offered to place the amount in escrow pending clarification of the dispute. According to him, the liquidator refused the proposal.

The Court observed that allowing the bidder to withdraw its deposit and participate afresh would place all stakeholders on a “clean slate” and avoid prolonged disputes. Disposing of the appeals, the Bench directed that the ₹150 crore already deposited by Raghava Square be refunded within four weeks and released to the appellant. The Court further permitted the company to participate in the fresh auction process.