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TMI Blog2015 (3) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The said assets included plant and machinery which were located at the factory site of PPL. In October 2011, IFCI invited quotation for sale of the movable assets including plant and machinery of PPL on "as is where is or whatever there is basis". The prospective bidders were also granted opportunity to inspect the plant and machinery. The petitioner, desirous of participating in the auction, inspected the movable assets i.e assets in respect of which bids were invited (hereafter referred to as the 'said assets'), on 20.10.2011 and 21.10.2011. Thereafter, the petitioner submitted its offer of Rs. 80 lacs to purchase the said assets which was revised to Rs. 2,11,00,000/- on 30.11.2011. After receiving the bids, IFCI invited the bidders for an inter se bidding. The said bidding was held on 09.12.2011 and the petitioner's bid of Rs. 2.25 crores was the highest. Thereafter, IFCI conducted a fresh round of inter se bidding on 26.12.2011 and the petitioner raised its offer to Rs. 3.31 crores, which being the highest bid resulted in the petitioner being declared the successful bidder. Immediately thereafter, on 28.12.2011, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id assets for which bids were invited, the amount collected by the IFCI ought to be refunded. This contention has been disputed by the learned counsel for the IFCI who submits that the assets for which the bids were invited were on "as is where is or whatever there is basis". And, even if there is any reduction in the value, the same would have to be borne by the petitioner. It is also contended that, in any event, the reduction in value is only to the extent of Rs. 2.92 lacs which is not significant in comparison to the value of the assets. 8. I have heard the learned counsel for the parties. 9. It is not in dispute that after the inspection of the said assets by the petitioner in October 2011, there has been a theft of part of the said assets. A complaint was filed by one Prakash Venugopal Nair, power of attorney holder and authorised person of M/s Shakti Associates Finance Services Pvt. Ltd. with the Judicial Magistrate, Gandhi Nagar inter alia praying for a direction to police authorities to take action and register the complaint. The relevant extract of the said complaint made by Mr Nair is quoted below:- "4. Thereafter, Manager of the complainant company namely M.S. Prince ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Platinum Ltd. By breaking or cutting window of the seized property and stolen copper wire and important and valuable spare parts of melting of gold. And, thus, it has been constrained to file complaint under section- 454,457, 379 of the Indian Penal Code before the Ld. Court." 10. Apparently, IFCI had appointed M/s Shakti Associates Finance Services Pvt. Ltd. (hereafter referred to as 'SAPS') as custodian of the assets of PPL. SAPS had in turn engaged the services of other security agencies (namely Vishal Security Agency and Super Security Services, for securing the assets of PPL). Since SAPS was an agent of IFCI/secured creditors, undisputedly, IFCI remained in the possession and the assets of PPL. It is also clear that the theft had been reported only after the petitioner had come to take possession of the said assets. The date/time of the removal of part of the said assets (hereafter "stolen assets") is not readily ascertainable but it is obvious that the stolen assets were removed after the inspection on 21.10.2011 and before 01.02.2012, when their removal was discovered. 11. It is also not disputed that although a Sale Certificate had been issued to the petitioner on 18.01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the purchaser and the purchaser will take all necessary steps to take over the possession of the assets immediately." 14. At this stage it is necessary to refer to Rule 7 of the 2002 Rules, which provides for a Sale Certificate to be issued in the form appended as appendix III to the said Rules. Rule 7(2) of the 2002 Rules is relevant and reads as under:- "(2) On payment of sale price, the authorised officer shall issue a certificate of sale in the prescribe form Appendix III to these rules specifying the movable secured assets sold, price paid and the name of the purchaser and thereafter the sale shall become absolute. The certificate of sale so issued shall be prima facie evidence of title of the purchaser." 15. It is apparent from the above that the transfer of title of the said assets would take place on the sale becoming absolute on the issuance of the Sale Certificate under Rule 7(2) of the 2002 Rules. 16. The form of Sale Certificate as prescribed in Appendix III to the 2002 Rules, clearly indicates that handing over possession is an inseverable part of the transaction which is certified. The said form clearly records the handing over of the possession of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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