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Issues Involved:
1. Whether SICOM Ltd. can proceed with the sale of the property after the order dated 6th April 2004. 2. Whether the bid submitted by Ceylon Biscuits Ltd. should be accepted. 3. Proper valuation of the property. Detailed Analysis: Issue 1: Whether SICOM Ltd. can proceed with the sale of the property after the order dated 6th April 2004. The application filed by the respondent company sought to restrain SICOM Ltd. from selling and auctioning the respondent company's properties. SICOM Ltd., a secured creditor, had initiated the sale process under section 29 of the State Financial Corporation Act. The court had previously supervised the sale process through various orders in Execution No. 288/2003, which included inviting bids and ensuring transparency. However, after the company petition was admitted on 6th April 2004, and a Provisional Liquidator was appointed, the execution petition was transferred to the Company Court. Despite this, SICOM Ltd. proceeded with accepting the bid from Ceylon Biscuits Ltd. The court noted that SICOM Ltd. could continue exercising its rights under the Act until a winding-up order was passed, as per the Supreme Court's judgment in International Coach Builders Ltd. v. Karnataka State Financial Corporation. Therefore, SICOM Ltd. could proceed with the sale, but it should be under the court's supervision. Issue 2: Whether the bid submitted by Ceylon Biscuits Ltd. should be accepted. The court examined whether the bid of Rs. 12.5 crores from Ceylon Biscuits Ltd. was acceptable. The court had previously invited bids and conducted a transparent process under its supervision. The highest bid received was from Ceylon Biscuits Ltd. Although the respondent company argued that the property was undervalued, the court had already directed a revaluation, which estimated the assets at Rs. 10 crores. The court found no higher bids than Ceylon Biscuits Ltd.'s offer. Therefore, the court considered the bid acceptable, provided no better offer was presented by the respondent company by 27th July 2004, accompanied by a pay order representing at least 10% of the bid amount. Issue 3: Proper valuation of the property. The respondent company contested the valuation, presenting a report from Harjinder Kohli and Associates, Chartered Accountants, valuing the property at Rs. 78,13,51,000. However, the court noted that this valuation was based on book value rather than market value and that the Chartered Accountants were not approved valuers. The court had earlier appointed an approved valuer, who estimated the property at Rs. 10 crores. The court deemed this valuation more reliable and found no basis to delay proceedings for further valuation reports from the respondent company. The court emphasized the need to avoid further delays and potential withdrawal of Ceylon Biscuits Ltd.'s offer. Conclusion: The court allowed SICOM Ltd. to proceed with the sale under its supervision, accepted the bid from Ceylon Biscuits Ltd. subject to no better offer being presented, and upheld the valuation of Rs. 10 crores by the approved valuer. The application was disposed of with these observations.
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