2005 (10) TMI 291 - HC - Companies Law

Issues Involved:
1. Appointment and role of the administrator for the company in liquidation.
2. Dispute over the payment of Rs. 96 lakhs and subsequent sale of property.
3. Auction and valuation of the property.
4. Procedural challenges and appeals regarding the sale.
5. Apportionment of sale proceeds among the Indian Bank, administrator, and appellants.
6. Application of Reserve Bank of India guidelines and one-time settlement scheme.
7. Calculation and dispute over the interest rate on the loan.

Detailed Analysis:

1. Appointment and Role of the Administrator:
The company petition was filed for M/s. Anubhav Plantations Ltd., which is in liquidation. The company court appointed Mr. M. Ravindran as an administrator to recover amounts due and distribute them to depositors.

2. Dispute Over the Payment of Rs. 96 Lakhs and Subsequent Sale of Property:
The administrator filed a memo regarding the Rs. 96 lakhs paid by the company to the appellants for land purchase. The first appellant admitted receiving this amount and agreed to the sale of the property to repay debts. The company court attached the property and notified the Indian Bank.

3. Auction and Valuation of the Property:
The Indian Bank sought permission to auction the property, which was granted. Despite advertisements, no tenders were received. The company court later directed the Official Liquidator to sell the property. The administrator filed an application to take possession of the property for a better offer, which led to various legal proceedings, including an appeal and a stay order. Eventually, the Supreme Court directed the sale to proceed per the company court's order.

4. Procedural Challenges and Appeals Regarding the Sale:
The appellants challenged the procedure adopted by the company court for the sale. The company court fixed the property's value at Rs. 86,16,000 and directed the appellants to make a substantial payment. The Indian Bank filed applications to auction the property, which led to a provisional confirmation of a bid for Rs. 1,32,00,000. The Division Bench later allowed new bids, resulting in a highest bid of Rs. 2,70,00,000 by Indus City Scapes.

5. Apportionment of Sale Proceeds Among the Indian Bank, Administrator, and Appellants:
The court considered the efforts of the appellants in securing a higher bid and decided to apportion the sale proceeds. The Indian Bank was awarded Rs. 1.40 crores, the administrator Rs. 1 crore, and the remaining amount to the appellants after adjusting for expenses.

6. Application of Reserve Bank of India Guidelines and One-Time Settlement Scheme:
The court explored the possibility of applying RBI guidelines for a one-time settlement. The Indian Bank expressed its inability to apply these guidelines due to a pending substantial claim before the Debts Recovery Tribunal. The court noted that the bank had settled for lesser amounts in similar cases through Lok Adalat.

7. Calculation and Dispute Over the Interest Rate on the Loan:
The appellants argued that the interest charged by the Indian Bank was excessive and not permissible by law. They contended for a lower interest rate based on the nature of the loan (agricultural) and past payments. The court referred to the Supreme Court's decision in Central Bank of India v. Ravindra, which allows discretion in awarding interest. The court decided to award interest at 10% on the suit claim for six years, considering the loan's agricultural nature and the appellants' payments.

Conclusion:
The court apportioned the sale proceeds, directed the Indian Bank to hand over title deeds to the highest bidder, and confirmed the highest bid by Indus City Scapes. The Indian Bank was instructed not to pursue further claims against the appellants, and the litigation was concluded to bring the matter to a logical end.

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