1993 (1) TMI 242

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....New Delhi, and others submitted their tenders. At an open auction held on July 31, 1992, from an offer of Rs. 2,00,000, Mr. Malik became, the highest bidder of Rs. 37,00,000, He was directed to deposit 25 per cent of the bid amount within two weeks and the remainder within 60 days. The learned company judge, Calcutta High Court, posted the case to August 14, 1992, for further action. On August 14, 1992, the appellant offered a sum of Rs. 38,00,000. The company judge after consideration allowed the petition of the appellant and directed it to deposit 10 per cent of the bid by August 17, 1992 and the balance 15 per cent to make up 25 per cent. by August 24, 1992, and adjourned the case to September 1, 1992. Shantilal Malik, the second respon....

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....olved. In the present case before us, none of such elements was there before the trial court calling for rejection". Admittedly, the sale is subject to acceptance by the court and as per condition No. 11 even a confirmed sale is liable to be set aside. In Navalkha and Sons v. Ramanuja Das [1970] 40 Comp Cas 936 (SC) [1970] 2 Comp LJ 8, this court held that the court is the custodian of the interests of the company and its creditors and the sanction of the court required under the Companies Act has to be exercised with judicial discretion regard being had to the interests of the company and its creditors as well. Where the acceptance of the offer by the Commissioner is subject to confirmation of the court, the officer does not by mere accep....

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.... of the sale. In Radhy Shyam v. Shyam Behari Singh, AIR 1971 SC 2337, this court considering the scope of Order 21, rule 90 of the Civil Procedure Code, 1908, held that in order to set aside an auction sale what has to be established is that there was not only inadequacy of the price but that inadequacy was caused by reason of the material irregularity or fraud. The purpose of an open auction is to get the most remunerative price and it is the duty of the court to keep openness of the auction so that the intending bidders would be free to participate and offer higher value. If that path is cut down or closed the possibility of fraud to secure inadequate price or; underbidding would loom large. The court would, therefore, have to exercise i....