TaxTMI 
TaxTMI 
2004 (7) TMI 353
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....t has received a bid of Rs. 12.5 crores from Ceylon Biscuits Ltd. which has been accepted by SICOM Ltd. It is at this stage the respondent company has approached this Court by way of the aforesaid application making the prayers delineated above. 2. Learned counsel for SICOM Ltd. submitted that no reply was required to be filed and he would argue the matter on the basis of various orders passed in this company petition as well as in Execution No. 288/2003. The matter was accordingly heard. 3. For proper adjudication of this application it would be apposite to refer to some factual matrix of the case. 4. One NRI Lead Bank purported to be a financier of the respondent company had obtained an award against the respondent company. In order to enforce that award Execution No. 288/2003 was filed. SICOM Ltd. is J.D. No. 3 in the said execution proceedings. It is not necessary to state, at this stage, as to how this award came to be passed and the methodology which was adopted in making SICOM Ltd. as well as other financial institutions as parties and then impleading all of them as judgment debtors along with the respondent company. Suffice it to state that before the said arbitral proce....
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....n the Court found that Ceylon Biscuits Ltd. had made an offer of Rs. 12.5 crores and had deposited the earnest money of Rs. 25 lakhs in dollars. There was another bidder, namely, Longulf Trading (India) Pvt. Ltd. which had submitted the bid of Rs. 11.7 crores. It may be pointed out at this stage that three bids submitted earlier, note of which was taken in order dated 16th March, 2004, had given the bid of Rs. 2 crores, 8 crores and 4.5 crores respectively. The bid of Ceylon Biscuits Ltd. was, therefore, the highest. However, before this bid could be accepted it was pointed out by learned counsel for the respondent company that the valuation of plant and machinery as well as land and building would be much higher than the one shown in the valuation report at Rs. 8,42,43,000. In view of the this dispute raised by the respondent company the Court directed SICOM Ltd. to get the entire assets revaluated by appointing an approved valuer and submit report before the next date. It was also directed that necessary papers of plant and machinery and other connected records shall be produced by the respondent company before the approved valuer in order to assist him in evaluating the property....
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....dmitted and citations were directed to be published in the newspapers and the Court also appointed Official Liquidator attached to this Court as the Provisional Liquidator. On coming to know of the aforesaid order SICOM Ltd. moved CA 414/2004 in the company petition. Notice in the said application is issued for 31st August, 2004. In that application SICOM Ltd., prayed for stay of order dated 6th April, 2004 appointing the Provisional Liquidator and directing him to take over the assets, properties and books of account of the respondent company. It was pleaded that SICOM Ltd. being a secured creditor was in possession of the unit of Bakemans Industries Pvt. Ltd. situated at Patiala and, therefore, the same should not be disturbed and the Provisional Liquidator be directed not to take possession of the unit from SICOM Ltd. The order was passed to the effect that the possession of SICOM Ltd. of the factory and plant and machinery etc. shall not be disturbed. 11. When execution application came up for hearing on 19th April, 2004 the executing court was informed about the aforesaid developments in the company petition. The execution petition, in these circumstances, has been transferre....
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....rt and under its supervision.' Right of the financial corporation in respect of the factory premises shall be guided by section 29 of the State Financial Corporation Act read with decision of the Supreme Court in International Coach Builders Ltd. (supra)." 12. In the aforesaid factual backdrop prayers in this application are to be considered. It is contended by the applicant that the Court in Execution Petition had permitted sale of the property on the condition that the same would be under the supervision of the Court but SICOM Ltd. had gone ahead and accepted the offer of M/s. Ceylon Biscuits Ltd., and is now in the process of transferring the unit to the said auction purchaser. It is further submitted that in view of the fact that winding up petition has been admitted and Provisional Liquidator has been appointed, SICOM Ltd., has no right to proceed with the sale of the unit. It is also the submission of the respondent company that the said unit is grossly under valued. The respondent has got the unit valued from M/s. Harjinder Kohli and Associates, Chartered Accountants, which shows the valuation of property in question as Rs. 78,13,51,000. Therefore, on the basis of the afor....
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....[2003] 43 SCL 297 , SICOM Ltd. cannot proceed with the matter after the order dated 6th April, 2004 is passed appointing a Provisional Liquidator. On the other hand learned counsel for SICOM Ltd. relies on the same very judgment to contend that SICOM Ltd. being a secured creditor and a statutory body under the State Finance Corporation Act has right to proceed under section 29 of the said Act inasmuch as no order of winding up has been passed so far. 16. Vide order dated 6th April, 2004 passed in the company petition, the petition is admitted to hearing and Provisional Liquidator has been appointed and there is no order of winding up. As per the judgment of the Apex Court in the case of International Coach Builders Ltd. (supra). State Financial Corporation would continue to exercise its rights under the Act and would stand outside the winding up proceedings till the winding up order is passed. There is no winding up order passed in this petition. Be as it may, even if we have to proceed on the basis that there is a winding up order, the only effect is that it is the Provisional Liquidator who may dispose of the assets and that Provisional Liquidator is also to act under the superv....
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....this stage. As has been pointed out above in the report submitted earlier by the valuer the property was valued at Rs. 8,42,43,000. The respondent company had objected to this valuation and the Court directed re-evaluation of the property through an approved valuer. The respondent company was allowed to participate in the proceedings by the approved valuer with direction to produce the relevant records. One Mr. J.S. Lamba, Senior Consultant-I of North India Technical Consultancy Organisation Ltd., which is a joint venture of IDBI, IFCI, ICICI and State Financial Institutions and banks, was appointed as valuer, who submitted fresh valuation report as per which entire assets were valued at Rs. 10 crores. This fact is specifically noted in the order dated 5th April, 2004 when counsel for the respondent company was also present. In view of this valuation, even fresh bids were invited and public notice was issued by SICOM Ltd. 20. The valuation submitted by the respondent company through Sh. Harjinder Kohli and Associates cannot be accepted in view of the fact that as per the Chartered Accountants themselves, the valuation is done on the basis of documents/records and information produ....