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2020 (2) TMI 1079
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....the Appellant has assailed the order dated 25.07.2019 passed by the learned Company Judge in CA No. 611/2019 in CO. PET. 329/2011. The aforenoted application had been moved by Respondent No.1 - Bhupinder Singh, the Ex-Director of Koutons Retail India Ltd. - the company in liquidation, to make a better offer of Rs. 26 crores without disclosing the name of the prospective bidder. The application had been made with a view to seek recall of the confirmation of sale of the property in favour of the Appellant herein for an amount of Rs. 21.83 crores, which amount had already been deposited by the Appellant. On 30.05.2019, the Court while issuing notice in CA No. 611/2019 passed the following order: "CA No. 611/2019 1. By this application, the applicant who states himself to be one of the former directors and promoters of the respondent company, seeks to set aside the sale of the property being Plot Nos.539-539A, Sector 37, Udyog Vihar, Phase-II, Gurgaon and rejection of the bid of Sh.Narender Kumar Nehra. 2. The grievance of the applicant is that the reserve price of the said property of Rs. 21.83 crores was below even the circle rate. The learned senior counse....
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....from the impugned order dated 30th May, 2019 this was on account of another person, described by the Appellant herein as a shareholder of the company, coming forth to offer a higher amount for the same property. 4. All that the learned Single Judge has done by the impugned order is to list the matter on 25th July, 2019 for a bidding to happen in the Court in the presence of the said Applicant and the present Appellant. 5. The Court sees no reasons to interfere in the matter at this stage. 6. Any submission that the present Appellant has to oppose the said sale can be raised before the learned Single Judge in accordance with law at the appropriate stage. The bona fides of the fresh bidder will be examined by the learned Single Judge. 7. The appeal is dismissed." 4. It is clear that the Division Bench did not rule upon the submissions of the Appellant with regard to his grievance regarding the reopening of the sale, which stood confirmed in his favour. All issues were left to be decided by the learned Single Judge. 5. Thereafter, the impugned order dated 25.07.2019 came to be passed, which reads as follows: "CA No.611/2019 1....
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.... No. 975/2019 in CO.PET. 329/2011. The aforenoted application was moved by Respondent No.3 - Fashion Accessories, seeking a direction to the Official Liquidator to handover the vacant and peaceful possession of the property in question. By the said order, the sale was confirmed in favour of Respondent No. 3 - Fashion Accessories, and the Official Liquidator was directed to handover physical possession of the property to Fashion Accessories within a period of three weeks from the date of the said order and to also execute the necessary sale deed. 7. It appears that property No. 539-539A, Sector-37, Udyog Vihar, PhaseIV, Gurgaon, Haryana was advertised for sale by auction by the Official Liquidator with a view to liquidate the assets of the company under liquidation. The auction notice was published on 22.03.2018 by the Official Liquidator. The reserved price of the said property was fixed at Rs. 21,83,24,000/-. It appears that no tenders were received and, consequently, no auction took place on the fixed date i.e. on 03.05.2018. As a result, the property could not be sold and the auction failed. At that stage, the Appellant proposed to purchase the property at the reserve price o....
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....ed. It is much later i.e. on 29.05.2019, that CA No. 611/2019 was moved by Respondent No. 1, which did not even disclose an identified bidder willing to offer a higher amount of Rs. 26 crores. Learned counsel further submits that eventually, Respondent No. 3 offered a lesser amount of Rs. 23 crores and, keeping in view the fact that the Appellant had already deposited the amount of Rs. 21.83 crores, the difference between the amount offered by Respondent No. 3 for purchase of the property in question was only about 5%, and not substantial. 9. Learned counsel for the Appellant has placed reliance on the decisions of the Supreme Court in Valji Khimji and Company v. Official Liquidator of Hindustan Nitro Product (Gujarat) Limited and Others, (2008) 9 SCC 299 and in Vedica Procon Private Ltd. v. Balleshwar Greens Private Ltd. and Ors., (2015) 10 SCC 94 to submit in in the aforesaid background, that there was no justification for undoing the confirmed sale in favour of the Appellant when he had already deposited the entire amount and all that remained to be done was the handing over of the vacant and peaceful physical possession of the property by the Official Liquidator and completi....
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....ed of. ORDER 08.02.2019 CA 141/2019 By this application the applicant seeks enlargement of the time for balance sale consideration amount with the OL on or before 31.3.2019. It also seeks waiver of Simple Interest @ 8% per annum w.e.f. 6.12.2018. The case of the applicant is that on 6.9.2018 this court had accepted the bid of the applicant to the tune of Rs. 21,83,24,000/- for property located at Plot No.539539A, Sector-37, Udyog Vihar, Phase-VI, Gurugaon, Haryana. Part sale consideration of Rs. 7,65,00,000/- has been deposited with the Official Liquidator. On 4.12.2018 this court granted further extension of two months w.e.f. 6.12. 2018 to the applicants to deposit the balance sale consideration to the tune of Rs. 14,18,24,000 with directions that the applicants would pay simple interest @ 8% per annum w.e.f. 6.12.2018. In the interest of justice, time is granted till 31.3.2019 to pay the balance amount. Applicant will also pay the necessary simple interest @ 8% per annum, for the period. The above order to the extent it directs payment of simple interest @ 8% per annum w.e.f. 6.12.2018 would stand satisfied in case the necessary payment is made by 31....
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.... 14. The Learned Single Judge embarked upon an exercise to invite fresh offer from another party. The intent of the learned Single Judge was, perhaps, to get a better price for the property in question. However, in our opinion, such a course was improper and contrary to the settled legal position in the facts of the present case. Undeniably, there is no allegation of fraud or illegality in the sale process that was undertaken by the Company Court in favour of the Appellant, or in the acceptance of the bid of the Appellant. In absence of any such allegations, there was no ground for recalling the order accepting the appellant's bid, especially at the instance of the party, who on a later date was willing to offer only a marginally higher price. If we are to permit such a practice, it would imply that a completed transaction can be reopened merely because a slightly better price is available. The certainty and finality attached to the bidding process undertaken by the court, would be adversely affected. Such a course of action undermines the sanctity of the sale process. Adopting such a path is also bound to have serious repercussions that could be detrimental to the process of pub....
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....37 it was held as under: "6. The principles which should govern confirmation of sales are well-established. Where the acceptance of the offer by the Commissioners is subject to confirmation of the Court the offerer does not by mere acceptance get any vested right in the property so that he may demand automatic confirmation of his offer. The condition of confirmation by the Court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case it is the duty of the Court to satisfy itself that having regard to the market value of the property the price offered is reasonable. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion. In Gordhan Das Chuni Lal v. S. Sriman Kanthimathinatha Pillai [AIR 1921 Mad 286] it was observed that where the property is authorised to be sold by private contract or otherwise it is the duty of the Court to satisfy itself that the price fixed is the best that could be expected to be offered. That is because the Court is the custodian o....
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....e Appellant upto 09.04.2019. Moreover, financial gain that may result, cannot be the sole criteria for deviating from the sale process. The auction reserve price for the sale of the property was fixed after taking into consideration the valuation report of the valuer of Punjab National Bank and, therefore, the offer of the Appellant which was accepted was in conformity with the auction reserve price so fixed. The objection of the Respondent No.1 regarding the property being undervalued is without merit, since neither Respondent No 3 nor any bidder came with a substantially higher offer. The difference in the amount offered by the Appellant, and that offered by Respondent No.3 is not more than 5%. The Supreme Court in the aforesaid decisions i.e. Valji Khimji and Co (supra) and Navlakha and Sons (supra) has carved out an exception of fraud for annulling the bidding process. The Court has observed that if subsequent to an auction, an offer is made, which is substaintially higher than what has been finalized, the situation may indicate fraud or some collusion. However, if the price offered is only little over the auction price, that cannot, by itself, suggest that fraud has been done.....