TMI Blog2003 (12) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... was requested to conduct and supervise the sale. However, on 15th May, 2002 vide orders passed in CP No. 124 of 2003, the official liquidator was permitted to invite tenders for the sale of movable and immovable property of the company in liquidation as per valuation report and to conduct the sale under the supervision of hon ble Mr. Justice A.L. Bahri. 3. An advertisement for the sale of movable and immovable property was published in various newspapers. The date of opening of the sealed tenders was 24th July, 2003. On the said date, the sale committee presided over by hon ble Mr. Justice A.L. Bahri opened the tenders. The maximum offer was that of Guru Nanak Sugar Industries Ltd., New Delhi for the sum of Rs. 7.50 crores. However, the said price was found inadequate and inter se bidding between the parties was conducted under the "supervision of hon ble Mr. Justice A.L. Bahri. After 45 rounds of bids Balaji Disposals Ltd. was found to be highest bidder with Rs. 9.71 crores. The said bid was accepted by Justice Bahri. 4. On 21st August, 2003, the official liquidator moved an application before this court for confirmation of sale in favour of Balaji Disposals. During th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed." 7. KRBL Ltd. deposited the entire balance sale consideration of Rs. 11,23,75,000 on 26th September, 2003 with the official liquidator by way of demand draft and sought possession of the complete unit at the earliest. 8. On 25th September, 2003, Balaji Disposals filed CA No. 730 of 2003 before this court offering a sum of Rs. 10 lakhs in excess of the bid of Rs. 13.80 crores offered by the KRBL Ltd. para Nos. 6 to 8 of the said application read as under : "6. That the applicant, auction purchaser now, wishes to enhance his bid and is willing to offer a sum of Rs. 10 lakhs in excess of the amount as bid by KRBL Ltd. In other words, the applicant is willing to pay a sum of Rs. 13.90 crores for the property in question. 7. That admittedly the endeavour of courts is to fetch the maximum price for property that is sold by way of court auctions. In the present case, it may be recalled that the auction price of the property in question has already gone up from Rs. 9.71 crores to Rs. 13.80 crores. By virtue of the present application, the applicant is willing to pay a further sum of Rs. 10 lakhs. Needless to say that the said money would aid the official liquidator in disch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er reads as under : "In the light of the law laid down by the Supreme Court in Divya Manufacturing Co. (P.) Ltd. s case ( supra ) it is clear that this court is competent to set aside/review the order of confirmation of sale before the delivery of possession and execution of sale deed. Thus, the prayer made by the applicant for setting aside/review of the earlier order of confirmation of sale dated 22nd September, 2003 can be allowed as it has offered an additional amount of Rs. 1 crore. In this view of the matter the contention raised on behalf of KRBL Ltd. that the said order has become final has no merit. It is true that one of the considerations weighing with the Supreme Court in Divya Manufacturing Co. (P.) Ltd. s case ( supra ) was that in view of the fresh offer received the earlier price was totally inadequate. In the present case, although in the application an increase of Rs. 10 lakhs was offered, but on the very first date of hearing the same was enhanced to Rs. 1 crore with the permission of the court. This amount indeed is a substantial amount and the court cannot, as a custodian of the assets of the company in liquidation and also keeping in view the interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant deposited draft of Rs. 2 crores on 21st November, 2003 to make the total deposit of Rs. 15.80 crores. 13. Balaji Disposals have filed a detailed reply to the application now filed by the applicant for submitting higher bid. It has been stated in the reply that Balaji Disposals has deposited the entire sale consideration on 19th November, 2003 in terms of the order passed by this court on 3rd Nove-mber, 2003 and, therefore, Balaji Disposals has become legally entitled for the delivery of possession. It was further stated that Balaji Dis-posals after making the full and final payment entered into contract/agree- ment to sell some of the machinery to the parties on 19th November, 2003. By way of preliminary objections, it has been stated that by filing second application under rules 6 and 9 of the Rules the applicant has sought the review of the order passed on 20th November, 2003 whereby the first application under rules 6 and 9 of the Rules was dismissed. The applicant is restrained by the principle of waiver and estopped against his own stand and statement recorded and reproduced by this court in orders passed on 3rd November, 2003 and 20th November, 2003 as the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Divya Mfg. Co. (P.) Ltd. v. Union Bank of India [2000] 38 CLA 206 , the hon ble Supreme Court has laid down the principles of sale of the property of company in liquidation. In Divya Mfg. Co. (P.) Ltd. s case ( supra ), the court relied upon Navalkha Sons v. Ramanya Das [1969] 3 SCC 537 to hold that the court is custodian of the interest of the company and its creditor. It is the duty of the court to see that the price fetched at the auction is adequate price even though there is no suggestion of irregularity or fraud. The Court also quoted from LICA (P.) Ltd. (No. 1) v. Official Liquidator [1996] 85 Comp. Cas. 788 (SC), that the Court has to exercise jurisdiction wisely and with circumspection and keeping in view the facts and circumstances in each case. The court also found that though the sale is confirmed but as neither the possession of the property nor the sale deed executed, therefore, where such higher price is offered it would be in the interest of company and its creditors to set aside the sale. Such action may cause inconvenience and loss to the highest bidder but that cannot be helped in view of the fact that such sales are conducted in court precincts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... helped in view of the fact that such sales are conducted in court precinct and not by a business house well versed with the market forces and price. Conformation of the sale by court at grossly inadequate price, whether or not it is a consequence of any irregularity or fraud in the conduct of sale, could be set aside on the ground that it was not just and proper exercise of judicial discretion. In such cases, a meaningful intervention by the court may prevent, to some extent, under bidding at the time of auction through court. In the present case, the court has reviewed its exercise of judicial discretion within a shortest time." (p. 214) 19. Learned counsel for the respondent has vehemently argued that the previous application filed by the applicant offering the previous application filed by the applicant offering to pay Rs. 1 lakh in an application and Rs. 5 lakhs in court was dismissed on 20th November, 2003. The additional price of Rs. 6 lakhs, i.e. , total 11 lakhs offered vide another misc. application dated 19th November, 2003 which was increased to Rs. 1 crore on 20th November, 2003 in fact amounts to review of the order passed on 20th November, 2003. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. Similarly, the argument that the second application cannot be entertained in view of the principles of res judicata is again devoid of merit. While dismissing the first application dated 6th November, 2003 filed by the applicant, it was an offer of the applicant of Rs. 5 lakhs which did not find favour with the court. Still further, the orders passed during the pendency of proceedings of misc. application does not disentitle the applicant to file fresh application with change of circumstances. 23. Similarly, in respect of plea of waiver, it is suffice to say that it is in the interest of the company and its creditors to fetch the maximum price possible. In fact, the respondent has pleaded in its application dated 25th September, 2003 that it is endeavour of courts to fetch maximum price of the property, i.e. , sale by way of court auctions. It is that endeavour which compels the court to accept the bid of Rs. 15.80 crores offered by the applicant. The argument which weighed with the court while upsetting the bid of the applicant of Rs. 13.80 crores at the instance of Balaji Disposals are the same as are applicable in the case of the applicant at this stage. What was goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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