S P Bajaj vs. Shaurya Housing Ltd. (In Liqn.) Through Ol And Ors.

$~47
* IN THE HIGH COURT OF DELHI AT NEW DELHI

th
% Date of Decision: 6 September, 2023

+ CO.APP. 14/2023 & CM APPL. 39401/2023, CM APPL.
39402/2023

S P BAJAJ ..... Appellant
Through: Mr. Jai Sahai Endlaw and Ms.
Shambhavi Kala, Advs.
versus
SHAURYA HOUSING LTD. (IN LIQN.) THROUGH
OL AND ORS. ..... Respondents
Through: Ms. Ruchi Sindhwani, Senior
Standing Counsel with Ms.
Megha Bharara, Adv. for
Official Liquidator.
Mr. T. Singhdev, Mr. Abhijit
Chakravarty, Mr. Bhanu Gulat
and Mr. Paramveer Singh
Narang, Advs.

CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
HON'BLE MR. JUSTICE AMIT MAHAJAN

VIBHU BAKHRU, J.

1. The appellant has filed the present appeal impugning a common
order dated 10.07.2023 (hereafter ‘ the impugned order ’), passed by
the learned Single Judge in three applications, being Co. Appls.
401/2023, 407/2023 and 481/2023 in Co. Pet. 510/2014.
2. The appellant is essentially aggrieved by the value at which the
property of M/s Shaurya Housing Ltd. (hereafter ‘ company in
Signature Not Verified
Digitally Signed
By:HARMINDER KAUR
Signing Date:27.09.2023
14:50:55
CO.APP. 14/2023 Page 1 of 7

liquidation ’), being land admeasuring 11,477 sq. mtrs. bearing khasra
number 357 & 358, village Mauja Tehra, Vrindavan (hereafter
‘ subject property ’), was auctioned.
3. An advertisement for auction of the subject property was issued
on 05.05.2023 with a reserve price of ₹7,96,79,187/-. The auction was
duly conducted on the said date.
4. One Mr. Robin Agrawal (Respondent No. 3) was declared as
the highest bidder, and the Official Liquidator filed an application (Co.
Appl. 407/2023) for approving the acceptance of his bid of
₹8,04,75,979/- as the highest bid.
5. There is no dispute that the said auction bidder/ Respondent No.
3 deposited the amounts as required: ₹79,67,918/- being 10% of the
reserve price as Earnest Money on 17.05.2023, and a further amount
of ₹ 1,24,00,000/- on 24.05.2023. The amounts so paid aggregated to
25% of the bid amount.
6. Prior to the approval of the sale in favour of respondent no.3, by
the learned Company Court, another entity, one Ahuja and Anand
Buildwell Pvt. Ltd. (hereafter ‘ AABPL ’) approached the learned
Company Court, by filing an application, Co. Appl. 401/2023, offering
a higher amount of ₹10.05 Crores for purchasing the subject property.
7. AABPL had not participated in the auction, and claimed that it
did not do so as it was not aware of the same.
8. The appellant, one of the Ex-Directors of the company in
liquidation, also filed an application, being Co. Appl. 481/2023,
Signature Not Verified
Digitally Signed
By:HARMINDER KAUR
Signing Date:27.09.2023
14:50:55
CO.APP. 14/2023 Page 2 of 7

seeking cancellation of the auction.
9. Considering that AABPL had offered a substantially higher
amount than the successful auction bidder (respondent no.3), the
learned Single Judge entertained the said application, but afforded the
auction bidder an opportunity to better the said offer.
10. AABPL and the auction bidder (Mr. Robin Agrawal) furnished
competing bids and the highest bid of ₹13 Crores, being the improved
offer made by the auction bidder, was accepted. The appellant’s
application Co. Appl. 481/2023 was rejected.
11. Mr. Jai Sahai Endlaw, learned counsel appearing for the
appellant, has assailed the impugned order essentially on two grounds.
First, he submits that the auction was conducted without sufficient
notice as the advertisement was published only in two newspapers,
which were not widely circulated in Delhi. Second, he submits that the
reserve price preferred for the subject property was below the circle
rate and therefore, the auction was flawed. He submitted that if the
auction is conducted after wide publicity, it is possible that the subject
property would fetch a higher value.
12. Considering that it is the appellant’s case that the property has
been sold at a value lower than its market price, this Court had
afforded the appellant an opportunity to deposit 25% of the highest
bid, in order to protect the interest of the creditors of the company in
liquidation in the event the appellant’s request was considered, and the
property was re-auctioned. This was particularly in view of the
submissions made by the learned counsel for the Official Liquidator
Signature Not Verified
Digitally Signed
By:HARMINDER KAUR
Signing Date:27.09.2023
14:50:55
CO.APP. 14/2023 Page 3 of 7

that the earlier endeavours to sell the subject property had not fetched
the value as now offered by the auction purchaser. Therefore, if the
auction was cancelled and the subject property was again put to
auction, there was a possibility that it would not fetch the value as
offered by the auction purchaser.
13. Mr. Jai Sahai Endlaw had sought time to take instructions in
this regard. He now states that the appellant is not in a position to
make the said deposit.
14. In the given facts, we are unable to accept that the subject
property has been sold at an undervalue.
15. The appellant’s contention that the auction was not given wide
publicity is also unmerited.
16. Admittedly, the sale notice was published in ‘Statesman’
(English), Mathura Edition as well as ‘Dainik Jagran’ (Hindi),
Mathura Edition, which is where the property is located. There was
also sufficient time between the publication of the advertisement and
the conduct of auction.
17. We also do not find any merit in the appellant’s contention that
the auction was flawed as the reserve price has been fixed below the
circle rate.
18. First of all, there is no requirement that the reserve price has to
be fixed at the circle rate or at a value above the same. The reserve
price is required to be fixed based on various factors. Undeniably, the
circle rate is one of the most important factors but it is not the sole
Signature Not Verified
Digitally Signed
By:HARMINDER KAUR
Signing Date:27.09.2023
14:50:55
CO.APP. 14/2023 Page 4 of 7

factor.
19. In the present case, the reserve price was fixed by the Official
Liquidator at a meeting held on 12.02.2020 at its office. The
representative of the secured creditor (Canara Bank), was also present
in the said meeting. The Official Liquidator had, before it, three
valuation reports, the details of which are set out below:

20. Based on the aforesaid valuation reports, the Official Liquidator
had fixed the reserve price taking the average of these three estimated
values. Accordingly, the sale notice was published with the reserve
price of ₹8,82,12,000/- .
21. An auction with the aforesaid reserve price was scheduled to be
conducted on 03.02.2022, however, no bidder came forward to offer
the reserve price. Accordingly, the auction did not fructify. It is in the
aforesaid context, that the reserve price was further reduced in the
subsequent auction by 10% in terms of the order passed by the learned
Single Judge on 03.02.2023 and the appellant did not contest the same
Signature Not Verified
Digitally Signed
By:HARMINDER KAUR
Signing Date:27.09.2023
14:50:55
CO.APP. 14/2023 Page 5 of 7

at the material time.
22. It is also material to note that the learned Single Judge had also
specified the newspapers in which the advertisement was to be
published. This too was not challenged by the appellant at the relevant
time.
23. Secondly, the contention that the value of the subject property
was fixed below the circle rate of ₹15,49,39,500/-, is also unmerited.
The said value has been determined assuming that the circle rate for
the subject property is ₹13,500/- per sq. meters. The learned counsel
for the respondents referred to the general instructions issued by the
office of the Sub Registrar, Mathura-I. The English translation of
Paragraph 13 of the said instructions reads as under:
“That in case of sale of land measuring 3000 sq. mtr. or more,
70% of the minimum rates is applicable. Similarly, in case of
sale of land measuring 10000 sq. mtr. or more, 60% of the
minimum fixed price is applicable.”

24. Thus, in terms of the aforesaid instruction, the declared circle
rate was required to be reduced to 60% as the area of the subject
property was more than 10,000 sq. meters. Thus, the circle rate is
significantly lower than as claimed by the appellant. The learned
Single Judge had rejected the appellant’s contention regarding the
reserve price being less than the circle rate on the ground that the
appellant had failed to establish the prevalent circle rate.
25. It is also pointed out that the valuation report submitted by the
appellant also reflects a discount of 40% of the circle rate, as relevant,
Signature Not Verified
Digitally Signed
By:HARMINDER KAUR
Signing Date:27.09.2023
14:50:55
CO.APP. 14/2023 Page 6 of 7

where the subject property is located.
26. In view of the above, we find no ground to interfere with the
impugned order.
27. The appeal is, accordingly, dismissed. All pending applications
are also disposed of.


VIBHU BAKHRU, J




AMIT MAHAJAN, J
SEPTEMBER 6, 2023
‘KDK’
Signature Not Verified
Digitally Signed
By:HARMINDER KAUR
Signing Date:27.09.2023
14:50:55
CO.APP. 14/2023 Page 7 of 7