Full Judgment Text
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CASE NO.:
Appeal (civil) 1054 of 2003
PETITIONER:
Wellworth Vanijya Pvt.Ltd.
RESPONDENT:
Chowdhury Udyog Pvt.Ltd. & Anr.
DATE OF JUDGMENT: 06/02/2003
BENCH:
N.Santosh Hegde & B.P.Singh.
JUDGMENT:
J U D G M E N T
SANTOSH HEGDE,J.
Leave granted.
The High Court by the impugned order while allowing
the appeal filed by the appellant herein remanded the matter
back to the Company Judge by setting aside the sale confirmed
in favour of the first respondent for sale of the assets of the
Company in liquidation by initiating proceedings afresh. In this
appeal, the appellant contends that its offer of Rs.4.25 crores
which was the highest and above the valuation price fixed for
sale of the company’s properties ought to have been accepted
instead of remanding the matter to the Company Judge. In the
connected appeal the first respondent has challenged the order
of the High Court on the ground that its offer was the best offer,
when accepted, hence, there was no reason why the Appellate
Bench ought to have cancelled the confirmation made in its
favour.
We have heard learned counsel for the parties and
perused the records. The Company in question was wound up
as far back as on 28.2.1986 when its assets were valued at
Rs.7.50 crores (approx.). Since the property in question could
not be sold, the property was revalued on 19.11.2001 at Rs.4.16
crores (approx.). When the property was put to sale for the last
time, the first respondent in this appeal offered Rs.3 crores
which is far less than the value fixed by the official valuers.
However, the sale was confirmed on 7.12.2001 but the
Appellate Bench on 21.12.2001 set aside the said sale among
other things, coming to the conclusion that the amount offered
by the first respondent being very much on the lower side,
under Clause 11 of the terms and conditions of sale, it had the
jurisdiction to set aside the confirmation of the sale made
earlier. While doing so the Court did not take into consideration
the offer made by the appellant herein which was for a sum of
Rs.4.25 crores. The contention on behalf of the appellant in this
case is that the value of the property is diminishing day by day
and by directing a fresh sale all over again, it would not benefit
the creditors of the company in any manner, therefore, the offer
made by it ought to have been accepted by the High Court. We
have also considered the arguments addressed in opposition by
the first respondent herein. It is necessary to note herein that
when the matter had come up for further orders on earlier dates
starting from 11.11.2002, noticing the fact that the value of the
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property was diminishing, we called upon the parties to offer
their bids in this Court so that the matter could be settled once
for all without further delay so as to safeguard the interests of
the creditors to the extent possible. Though this matter was
adjourned from time to time, expecting the respondent to make
a better bid than what was made by the appellant, we are
informed today that the said respondent is not willing to make
any higher bid. On the contrary, he wanted to question the
judgment of the High Court which has cancelled the
confirmation of sale made in his favour.
As noted above, the Company was wound up as far back
as on 28.2.1986 and the creditors of the Company have not
been able to receive anything only because of the fact that the
assets of the Company could not be sold. The value of the
assets of the Company has come down from Rs.7.5 crores to
Rs.4.25 crores which is the best offer received as on today;
whereas the offer made by the first respondent is only Rs.3
crores and he is not willing to enhance it. In the above fact
situation, without going into the legality of the questions
involved, bearing in mind solely the interests of the creditors,
we think the offer made by the appellant of Rs.4.25 crores
should be accepted. Therefore, allowing this appeal and setting
aside the impugned judgment, we direct the Company Court to
accept the offer of Rs.4.25 crores made by the appellant and on
the appellant depositing the balance amount, necessary
documents may be executed in its favour.
For the reasons stated above, this appeal is allowed.
SLP.CC 8753/02 :
For the reasons given by us in C.A.No.1054 of 2003
arising out of SLP No.17976/02 wherein we have considered
the case of the first respondent, we find no merit to entertain
this SLP and condoning the delay in its filing, we dismiss
SLPNo...CC 8753/02.
IA No.1 of 2003 in SLP No.17976/2002 :
In this I.A., the applicant Ispat Peletech Ltd. has
submitted that it had offered Rs.8.75 crores for purchase of the
assets of the company in question in the year 1990 and the said
order was accepted by the Company Court and confirmed but
this Court by an order dated 7.2.1991 set aside the said bid and
directed the Company Court to call for fresh bids. The applicant
contends that along with his offer, it had deposited Rs.87.50
lacs towards the sale consideration which amount even
according to the judgment of this Court dated 7.2.1991 is liable
to be returned to it but in spite of repeated applications made to
the Company Court, the said amount is still retained by the
official liquidator who has no jurisdiction to do so because the
amount in question was deposited as part of the sale
consideration which sale was set aside by this Court and this
Court while doing so, had observed that it was open to the
applicant to apply to the court for appropriate directions in
respect of the money which it had already deposited. We think
in the interest of justice since the amount in question does not
belong to the Company, it is appropriate to issue directions to
the official liquidator to refund the money in question.
Accordingly, this application is allowed. The applicant is added
as a party to this appeal and there shall be a direction to the
official liquidator to refund the sum of Rs.87,50,000/- to the
applicant within two months from the receipt of this order. This
IA is allowed accordingly.
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