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of <h1>Court approves asset sale in liquidation, highest bid Rs. 23.20 crores accepted. Applicant to receive balance within 30 days.</h1> <h3>Shreeshyla Co-operative Industrial Estate Ltd. Versus Sreeshyla Gears and Pinions Ltd.</h3> Shreeshyla Co-operative Industrial Estate Ltd. Versus Sreeshyla Gears and Pinions Ltd. - [2004] 52 SCL 524 (KAR.) Issues:1. Confirmation of the sale of assets in a liquidation process.2. Competing bids and interests of different parties in the auction sale.3. Non-compliance with deposit requirements by one of the applicants.4. Dismissal of an application and imposition of costs for obstructing legal proceedings.Confirmation of Sale of Assets:The judgment pertains to Company Application 25/2004 filed by M/s. Karnataka State Finance Corporation seeking confirmation of the sale of assets of companies under liquidation through a public auction. The highest bid of Rs. 23.20 crores was made by M/s. ISKON Charities. The sale was subject to conditions, and the applicant Corporation received 25% of the price upfront. The Court considered the interests of all concerned and decided to confirm the sale to ensure the realization of funds for creditors and liabilities. The Corporation was directed to receive the balance of the sale consideration within 30 days for further application of the funds.Competing Bids and Interests:Another application, C.A. 1961/2003, was filed by a cooperative estate expressing interest in the assets and offering to deposit Rs. 25 crores. However, the applicant failed to comply with the deposit requirement or stay the auction proceedings. Despite expressing intent to participate, the applicant did not engage in the auction or offer competitive bids. The Court deferred confirmation of the sale to allow the applicant to demonstrate bona fides but ultimately dismissed the application with costs for obstructing the proceedings.Non-Compliance with Deposit Requirements:The applicant in C.A. 1961/2003 failed to deposit the promised amount of Rs. 25 crores as directed by the Court, leading to the application becoming infructuous. The applicant's counsel stated an inability to compete with the highest bidder and withdrew from the proceedings. The Court viewed the applicant's actions as obstructive and dismissed the application with exemplary costs to discourage misuse of legal processes.Dismissal of Application and Imposition of Costs:The Court dismissed C.A. 1961/2003, levying costs of Rs. 20,000 on the applicant for acting as a meddlesome interloper with ulterior motives to obstruct the proceedings. The judgment emphasized the importance of discouraging such misuse of legal processes and maintaining the integrity of court proceedings. The costs were to be paid to the Karnataka State Finance Corporation within a specified timeline, failing which a decree would be issued.The judgment addresses the confirmation of asset sales in a liquidation process, the interests of different parties in the auction sale, non-compliance with deposit requirements by an applicant, and the dismissal of an application with costs for obstructing legal proceedings. It highlights the Court's role in ensuring fair processes, protecting the interests of creditors, and maintaining the integrity of legal proceedings in such matters.
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