TMI Blog2020 (2) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be entitled to refund of the amount deposited with interest accrued thereon. Thus, the OL would lose the interest on the amount deposited by the Appellant upto 09.04.2019. Moreover, financial gain that may result, cannot be the sole criteria for deviating from the sale process. There are nothing improper in the conduct of the Appellant. Much has been said about the fact that after having been unsuccessful in the first round, the Appellant had by its conduct waived its objection to the re-bidding of the property. There are no waiver on the part of the Appellant. In the appeal proceedings, the Court found the action to be premature in as much, as, it was observed that the order impugned in the first appeal had only called upon Respondent No.3 to make a bid and therefore the matter had not attained finality. Appeal allowed - decided in favor of appellant. - CO.APP. 19/2019, CM APPLs. 42613/2019 & 42615/2019, CO.APP. 21/2019, CM APPL. 44407/2019 & 479/2020 - - - Dated:- 13-2-2020 - MR. VIPIN SANGHI AND MR. SANJEEV NARULA JJ. Appellant Through: Mr. Abdhesh Chaudhary, Mr. Om Prakash Shukla, Mr. Manav Sharma and Mr. Ajit Rajput, Advocates. Respondents Through: Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be in the interest of the respondent company that the bidding may be held between the applicant and Sh. Narender Kumar Nehra. However, till then the Official Liquidator may not hand over the possession of the said property to Sh. Narender Kumar Nehra. This is also subject to the applicant handing over a banker cheque for a sum of ₹ 2.183.00 crores as earnest deposit to the Official Liquidator within two weeks from today. 6. In case, the necessary earnest deposit has not received by the Official Liquidator, the Official Liquidator is free to take steps in accordance with the order dated 06.09.2018. 7. In case, the earnest deposit is made by the applicant, an auction shall take place between the applicant and Sh.Narender Kumar Nehra on the next date of hearing. 8. Notice of this application be also sent to Sh.Narender Kumar Nehra, returnable for 25.07.2019. Bidding shall take place in court of the said property on the same terms for which the sale notice was issued. 9. A copy of this order be given dasti under the signatures of the court master. 3. The Appellant preferred CO.APP. 16/2019 being aggrieved by the order dated 30.05.2019. The said appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion made against Mr.Narender Kumar Nehra in this application. He also states that in the application moved by the applicant, the applicant has stated that they have a prospective buyer and they are willing to pay a sum of ₹ 26 crores. Hence, the bid of the applicant be accepted only at ₹ 26 crores. 2. This court had on 30.05.2019 directed that the bidding will take place between Mr.Narender Kumar Nehra and the prospective buyer today. However, it transpires that Mr.Narender Kumar Nehra is not interested in further bidding. 3. In the light of this, learned senior counsel for the applicant states that the bid of the applicant may be accepted at ₹ 23 crores. 4. Keeping in view of the fact that additional sum of ₹ 1.20 crores approximately is being realised for sale of the assets of the respondent company, the bid of the prospective buyer - M/s. Fashion Accessories is accepted. They have already paid a sum of ₹ 2.183 crores to the OL as earnest deposit. In terms of the terms and conditions of auction, M/s Fashion Accessories will deposit 25% of the bid amount (excluding earnest deposit) within 7 days from today. The balance bid amount shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was waived, presumably, since neither the Court nor the Official Liquidator were able to find any buyer for the said property even at the reserve price. In any event, there is no dispute about the fact that the Appellant made the complete deposit of the amount of ₹ 21,83,24,000/- on or before 09.04.2019. Nearly after fifty days of the receipt of the entire sale consideration from the Appellant, Respondent No. 1 a former Director of the company in liquidation, moved CA No. 611/2019 on the premise that there are bidders available who would offer ₹ 26 crores for the purchase of the property. However, no identified bidder was disclosed. In that application, the learned Company Judge passed an initial order on 30.05.2019, as taken note of hereinabove. Since the Appellant s appeal being CO. APP. No. 16/2019 against the order dated 30.05.2019 was rejected, though all his rights and pleas were preserved, he appeared before the Court on 25.07.2019, but did not participate in the bidding inter se the Respondent No. 3 and himself. According to the Appellant, the same was unjustified. Consequently, the learned Company Judge proceeded to pass the impugned order dated 25.07.2019, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chadha, who represents Respondent No.3 submits that Respondent No. 3, made a bona fide offer of ₹ 23 crores. Respondent No. 3 decided to purchase a property to expand its business and since the sale of the property in question has got entangled in the present litigation, the Respondent No. 3 would be happy to receive its amount and let go of the property in case the appeal of the Appellant is allowed. 12. Mr. Agarwal learned counsel for the Respondent No.1 submits that the Appellant repeatedly sought time to make the entire deposit of the offer amount of ₹ 21.83 crores which was granted by the Court. Appellant also obtained waiver of partial interest. In this regard, he has placed before the Court, the orders dated 04.12.2018, 08.02.2019 and 09.04.2019 passed by the Company Court. These orders read as follows: ORDER 04.12.2018 CA No. 1426/2018 By this application, the applicant seeks various reliefs including extension of two months for making the balance payment. The sale notice was issued on 22.03.2018. The applicant made a bid at the reserve price of ₹ 21,83,24,000/-. The bid was accepted. Learned counsel for the applicant sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 but the Official Liquidator did not accept the same as they were beyond the time stipulated of this court in the order dated 08.02.2019. In the interest of justice, the said demand drafts have been handed over to the learned counsel appearing for the Official Liquidator. The interest amount as on directed 08.02.2019 is waived off. In view of the above, full bid amount of Rs. 21,83,24,000/- has been received for the property being Plot No. 539-539A, Sector 37, Udyog Vihar, Phase IV, Gurgaon, Haryana. The possession of the premises may be handed over to the applicant. Other consequential steps may also be taken. The application stands disposed of. 13. The controversy in the present case revolves around the rights of the Appellant arising out of the acceptance of its bid for the purchase of the property in question. Indisputably, the complete sale consideration has been deposited by the Appellant and the same has also been accepted by the OL. Although the payments were made in installments after seeking extensions from the Court, yet, this cannot detract the fact that the entire payment of ₹ 21,83,24,000/- stood deposited on or before 09.04.2019. The del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Single Judge has erred in inviting offers from Respondent No.3. 15. At this stage it is relevant to note the judgement of the Supreme Court in the case of Valji Khimji and Co. v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd., (2008) 9 SCC 299 wherein it was held as under: 28. 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 are themselves to be blamed 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 offer a higher price. Of course, the situation may be differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being a safeguard against the property being said at an inadequate price, it will be not only proper but necessary that the Court in exercising the discretion which it undoubtedly has of accepting or refusing the highest bid at the auction held in pursuance of its orders, should see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud. It is well to bear in mind the other principle which is equally well-settled namely that once the Court comes to the conclusion that the price offered is adequate, no subsequent higher offer can constitute a valid ground for refusing confirmation of the sale or offer already received. (See the decision of the Madras High Court in Roshan Co. case). (emphasis supplied) 17. Having regard to the aforesaid view of the Supreme Court, we hold that the Company Court was not justified in passing the impugned order dated 25.07.2019, whereby the bid of ₹ 23 crores of prospective buyer (Respondent No.3) was accepted, thereby setting aside the earlier order dated 06.09.2018, accepting the bid of the Appellant. The Company Court failed to take into consideration that vide the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst round, the Appellant had by its conduct waived its objection to the re-bidding of the property. We do not perceive any waiver on the part of the Appellant. In the appeal proceedings, the Court found the action to be premature in as much, as, it was observed that the order impugned in the first appeal had only called upon Respondent No.3 to make a bid and therefore the matter had not attained finality. In this view of the matter, the order dated 23.07.2019 passed in Co. APP. 16/2019, permitted the Appellant to oppose the said sale before the learned Single Judge. Thereafter, the Appellant categorically refused to join the bidding process and better his offer. This was apparently for the reason that the Appellant, conscious of its rights, elected to hold on to his plea that the sale transaction stood concluded and could not be reopened. Since the Company Court proceeded to accept the bid of Respondent No.3, he has now approached this Court. Thus, we do not find any waiver on the part of the Appellant that would disentitle him to challenge the impugned order. Also, adverse conclusion can be drawn against the Appellant, founded on the observations made by learned Single Judge in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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