2000 (7) TMI 846
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....harma') and respondent No. 8, Jay Prestressed Products Ltd. ('Jay') herein. 2. In 1972, 'Tirupati Mills' was incorporated to manufacture Carpet yarn at Sonepat (Haryana). On 30-5-1988, a financial institution filed a refer-ence to the BIFR and it was declared as sick industrial company. On 27-1-1994, the BIFR proposed winding up of the company. On 21-4-1995, the High Court of Calcutta ordered winding up of the company and directed the Official Liquidator to take charge of the company. On 5-7-1997, Tirupati Woollen Mills Shramik Sangharsha Samity ('Samity') respondent No. 3 entered into an agreement with appellant-Divya whereby 'Divya' agreed to run 'Tirupati Mills' and to provide re-employment to the workmen of the said company upon purchase of the assets and properties of the said company under liquidation. On 17-12-1997, the 'Samity' made an application No. 741 of 1997 before the High Court of Calcutta inter alia praying that (i) the assets and properties of the company be sold to 'Divya' at the price valued by the Official Liquidator and/or valuer appointed by him or at such price as the Court may deem fit and proper; (ii) 'Divya' be directed to re-employ all the workers as agr....
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....pleaded that they should be given further opportunity to bring a higher offer. The High Court agreed to give a further opportunity to the offerors to match the offer of the appellant. On 17-1-1998, the bank made application before the Company Court being CA No. 41 of 1998 for re-advertisement of the sale. On 6-2-1998 when the matter was heard, as no one turned up to make any higher offer, the offer of the 'Divya' was conditionally accepted by the learned Single Judge with liberty to the secured creditors to find higher offer within 30 days. The appellant was directed to deposit the balance sum of Rs. 77 lakhs as per the notice for sale. 4. Being aggrieved by the order dated 6-2-1998, respondent No. 1, bank and respondent No. 3, the 'Samity' preferred appeals being GA Nos. 141 and 107 of 1998 respectively before the Division Bench. By order dated 9-3-1998, the part of the order dated 6-2-1998 confirming the sale in favour of 'Divya' was stayed. 5. On 6-5-1998, it was ordered that the Official Liquidator should take steps to conduct fresh sale in the manner indicated in the said order and the company be sold as a going concern with a reserved price of Rs. 85 lakhs. The Court also n....
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....nd 8 it was submitted that they were ready and willing to purchase the company as a going concern and to establish their bona fides, they were prepared to deposit 20 per cent of Rs. 2 crores. On the basis of the said applications, the Court directed the applicants to deposit Rs. 40 lakhs each with the Official Liquidator. Thereafter, the matter was kept for hearing on 11-8-1998 on which day the Court considered the facts stated above and also the applications filed by respondent Nos. 7 and 8 to re-open the confirmed sale. Those applications were opposed by the auction purchaser (Divya) and also by respondent No. 3 'Samity'. After considering the submissions made by the learned counsel, the Court referred to the following clause 11 of the terms and conditions of sale and held that in view of the specific term, the Court was vested with authority to set aside the sale for the benefit of the creditors etc. and/or in public interest: "Clause 11 : The Hon'ble High Court may set aside the sale in favour of purchaser/purchasers even after the sale is confirmed and/or purchaser consideration is paid on such terms and conditions as the Court may deem fit and proper for the interest and ben....
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....f Rs. 1.25 crores. Respondent No. 7 was not permitted to bid as he did not comply with the requirements mentioned in the advertisement for sale and, therefore, on 2-7-1998 before commencement of auction sale, he was not permitted to participate in auction. It is, therefore, submitted that after the sale is confirmed, subsequent higher offer cannot constitute a valid ground for setting aside such confirmation. He referred to various decisions in support of his contention and submitted that once the sale was confirmed by the Court after applying its mind to all relevant considerations, it is not permissible to probe in respect and to accept subsequent offers by 'Jay' or 'Sharma'. He pointed out that as such initially valuation report fixed the value of the property at Rs. 37 lakhs only. Thereafter the appellant raised its offer to Rs. 85 lakhs and agreed to re-employ the workmen, so the learned Single Judge confirmed the sale in its favour. As the said order was challenged before the Division Bench, the Division Bench directed the Official Liquidator to conduct fresh sale and finally the highest offer of appellant of Rs. 1.30 crores was accepted by the Court. In such a situation the ....
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....r from one Gopaldas Darak for higher amount was received by stating that he could not offer in time because he came to know of the sale only 2 days prior to the date of the application and there was possibility of higher bids. Instead of directing a fresh auction or calling for fresh offers, the learned Judge thought it proper to arrange an open bid in the Court itself on that very day as between Navalkha and higher offeror Gopaldas Darak. Navalkha thereafter offered higher bid at Rs. 8,82,000 and its bid was accepted and the learned Judge concluded the sale in its favour with a direction to pay the balance amount. Thereafter an application was filed offering Rs. 10 lakhs. A contention was raised that due publicity of the sale of the property was not made, but that application was rejected by the Court. Hence, an appeal was filed by the applicant who made an offer of Rs. 10 lakhs and another by one contributory against the order of confirmation. Both appeals were allowed by the Division Bench and the order passed by the learned Judge was set aside with a direction to take fresh steps for sale of the property either by calling sealed tenders or by auction in accordance with law. Tha....
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....foresaid observation, it is abundantly clear that the Court is the custodian of the interests of the company and its creditors. Hence, it is the duty of the Court to see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud. As stated above, in the present case, the sale proceedings have a checkered history. The appellant started its offer after having an agreement with the Employees Samity for Rs. 37 lakhs. This was on the face of it under bidding for taking undue advantage of the Court sale. At the intervention of the learned Single Judge, the bid was increased to Rs. 85 lakhs. Subsequently, before the Division Bench, the appellant increased it to Rs. 1.30 crores. At that stage, respondent No. 7, 'Sharma' was not permitted to bid because it had not complied with the requirements of the advertisement. It is to be stated that on 26-6-1998, the Division Bench has ordered that offers of Eastern Silk Industries Ltd. and Jay Prestressed Products Ltd. would only be considered on 2-7-1998 and confirmation of sale would be made on the basis of the offers made by the two parties. Further, despite the fact that the appellant '....