9911796707
TMI Blog2010 (1) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... sale notice was published on May 4, 2009, for the sale of leasehold land measuring 2.50 acres along with godown and certain constructions on "as is where is and whatever there is" basis with respect to schedule I property of the company in liquidation. The only tenderer found on July 2, 2009, when the sealed tender was opened, was the BIADA which had made an offer of Rs. 10 lakhs. However, in view of the fact that the property had been valued at Rs. 93,54,997 by the official valuer, the BIADA was given time and ultimately an offer of Rs. 30,00,000 was made on behalf-of the BIADA, On July 17, 2009, an interlocutory application was filed on behalf of Best Towers (P.) Ltd., expressing its intention to participate in the sale as it had recently learnt about the same and on July 24, 2009, it made an offer of Rs. 35 lakhs upon which learned counsel for the BIADA stated that he had instruction to make an offer not more than Rs. 35 lakhs, whereafter learned counsel for Best Towers (P.) Ltd., increased the offer to Rs. 36 lakhs. Keeping the offer pending, a fresh notification for sale was directed to be published by the official liquidator. When the tender was opened on August 21, 2009, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 50 lakhs offered by Symbiosis Electronics (P.) Ltd., thus in the interest of the company and its creditors the higher offer should be accepted. 7. Learned counsel further submits that even in the sale notice issued by the official liquidator it was clearly mentioned that the High Court reserves the right to accept or reject any or all the offers at any stage of sale proceeding or confirmation of sale and/or withdraw any of the property subject to sale and negotiate with the purchasers for the public good as well as in the interest of secured creditors ; it also provides that the High Court may retain EMD of two top bidders up to sixty days from the date of order accepting the offer/prima facie confirmation of sale and further it will not carry any interest. It is urged by learned counsel that the order of this court dated August 21, 2009, accepting the offer of Rs. 50 lakhs of Symbiosis Electronics (P.) Ltd., was only a prima facie confirmation of sale and it was open to this court in the interest of secured creditors and the company to withdraw the same and accept a higher bid by another party. 8. In support of the aforesaid proposition learned counsel relies upon a decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iquidator [1996] 85 Comp Cas 792 (SC) and the court held (page 794) : Proper control of the proceedings and meaningful intervention by the court would prevent the formation of a syndicate, underbidding and the resultant sale of property for an inadequate price. The order passed by this court yielded the result that the property which would have been finalised at Rs. 45 lakhs, fetched Rs. 1:10 crores and in this court a further offer of Rs. 1.25 crores is made. In other words, the property under sale is capable of fetching a higher market price. Under these circumstances, though there is some force in the contention of Sri Ramaswamy that the court auction may not normally be repeatedly disturbed, since this court, on the earlier occasion, had limited the auction between the two bidders, the impediment will not stand in the way to direct sale afresh. Even today the parties are prepared to participate in the bid. Further, there is a specific condition No. 11 in terms and conditions of sale as quoted above which empowers the court to set aside the sale even though it is confirmed, for the interests of creditors contributories and all concerned and/or public interest. In this view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication filed by the BIADA should be rejected. 13. In support of the aforesaid stand learned counsel relies upon a decision of the Supreme Court in the case of Valji Khimji and Co. v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. [2008]' 145 Comp Cas 36 ; [2008] 9 SCC 299, paragraphs 28 to 30 of which are quoted below (page, 43 of 145, Comp Cas) : "If it is held that every confirmed sale can be set aside the result would be that no auction sale will ever be complete because always somebody can come after the auction or its confirmation offering a higher amount. It could have been a different matter if the auction had been held without adequate publicity in well-known newspapers having wide circulation, but where the auction sale was done after wide publicity, then setting aside the sale after its confirmation will create huge problems. When an auction sale is advertised in well-known newspapers having wide circulation,' all eligible persons can come and bid for the same and they will be themselves be to blame if they do not come forward to bid at the time of the auction. They cannot ordinarily later on be allowed after the bidding (or confirmation) is over to off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he application of BIADA is accepted the further bidding should not be confined to BIADA and Symbiosis Electronics (P.) Ltd., rather there should be a fresh advertisement as laid down by the apex court in the case of Navalkha and Sons v. Ramanuja Das [1969] 3 SCC 537; [1970] 40 Comp Cas 936. 16. I have considered the rival submissions of the parties. It is true that BIADA had earlier participated in the bidding and its first offer was to the extent of only Rs. 10 lakhs which evidently was an act of under bidding to take advantage of the situation where no buyer had come forward to offer for purchase of the said property despite advertisements having been made thrice earlier. Subsequently, however, it did make the higher offer of Rs. 30 lakhs which resulted ultimately in the re-advertisement for sale of the property. It is also true that at that stage BIADA did not go any higher than the previous offer, and the offer of Symbiosis Electronics (P.) Ltd. of Rs. 50 lakhs was accepted by this court. Immediately thereafter BIADA has filed the present application stating that it was prepared to make an offer of Rs. 55 lakhs which was enhanced to Rs. 65 lakhs on instructions received by lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t offer of Rs. 65 lakhs is to the extent of 30 per cent. I, however, consider the previous offer totally inadequate not only in terms of the present offer made but on consideration of the official valuer's report valuing the property at Rs. 93 lakhs. 18. The aforesaid view is also supported by the observation made in Divya Manufacturing Co. (P.) Ltd. case [2000] 102 Comp Cas 66 ; [2000] 6 SCC 69, that although such offers may cause some inconvenience or loss to the highest bidder but that cannot be helped in view of the fact that such sales are conducted in court precincts and not by a business house well versed in the market forces and prices. 19. In Divya Manufacturing Co. (P.) Ltd. case [2000] 102 Comp Cas 66 ; [2000] 6 SCC 69, there is reference to condition No. 11 in the terms and conditions of sale which empowered the court to set aside the sale even though it was confirmed for the interests of the creditors, contributories and all concerned and/or public interest. In the present matter also it is evident from the conditions of the sale notice that the order of the court accepting the offer is a prima facie confirmation of sale and it is open to the High Court to withdraw t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
