2003 (9) TMI 555 - HC - Companies Law

Summary

Issues:
1. Permission to sell securities of the company in liquidation.
2. Decision on the prospective buyer's offer for purchase of assets.
3. Evaluation of tenders received by the Official Liquidator.
4. Consideration of conditional offer for the purchase of entire unit.
5. Concerns about the commitment of the prospective buyer.
6. Rejection of the offer by respondent No. 6.
7. Dismissal of the application and directions to the Official Liquidator.

Analysis:
1. The petitioner sought permission under section 446 of the Companies Act, 1956, to sell the securities of the company in liquidation to satisfy dues. The court did not grant immediate permission due to a fixed reserve price of eight crore rupees, directing for a public auction to maximize asset value.

2. The respondent No. 6 offered to purchase the assets on a deferred payment basis. The Official Liquidator invited tenders, receiving offers from various parties. The highest offer was from Shri Anurag Jaipuria for Rs. 5,01,00,000 for Lot IV.

3. The conditional offer from respondent No. 6, Jai Drinks Private Limited, proposed an interest-free installment payment over six and a half years. However, concerns were raised about the company's commitment to fulfill the offer terms.

4. The court expressed doubts about the feasibility of the deferred payment offer and the lack of clarity in the tender notice regarding such arrangements. It emphasized the need to consider better offers in the interest of creditors.

5. Ultimately, the court rejected the offer from respondent No. 6 and deemed other offers as too low, emphasizing the importance of not selling the company's assets at undervalued prices.

6. Consequently, the application was dismissed, and the Official Liquidator was directed to take appropriate steps in compliance with the law, ensuring the best interests of the creditors and the company in liquidation are safeguarded.