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Issues involved:
The issues involved in the judgment are the application filed by a former director of a company (in liquidation) to come on record in a case related to the sale of land and building, the conformity of the sale procedure followed by Karnataka State Financial Corporation (KSFC), and the objections raised regarding the sale confirmation process. Application by Former Director: The former director of the company (in liquidation) filed an application to come on record, alleging that the sale conducted by KSFC was not in accordance with Companies (Court) Rules, 1959. He argued that the property was sold below market value and requested the court to set aside the sale and reauction it. Citing a Supreme Court judgment, he contended that the sale should have been conducted under the supervision of the Company Court and that he, as a necessary party, had the right to be involved in the proceedings. KSFC's Submission: KSFC argued that the Supreme Court judgment cited by the applicant was not applicable to the present case. They maintained that the sale was conducted after obtaining permission from the court and in compliance with SFC Rules. KSFC contended that the former director's objections were baseless as no injustice was caused to him, and even if he was considered a proper party, his grievances should not affect the sale confirmation process. Contention of R-3: R-3, the auction purchaser, defended the sale process, stating that it was conducted transparently with wide publicity and multiple bidders participating. They highlighted that the property was in a dilapidated condition, and the offer made by R-3 exceeded the reserve price set by KSFC. R-3 clarified that the auctioned rights were leasehold, and the sale would involve clearing dues to KEB and KIADB. Court's Decision: The court noted that the former director was given opportunities to present a better buyer but failed to do so. Despite being considered a proper party, the court rejected his objections for various reasons. It emphasized that KSFC had followed the court's permission to conduct the sale, and the highest offer made by R-3, exceeding the reserve price, should be accepted. Consequently, the court allowed the sale confirmation in favor of R-3 and permitted KSFC to hand over possession to R-3. Conclusion: In conclusion, the court allowed the application filed by KSFC for sale confirmation, directed the possession transfer to R-3, and overruled the objections raised by the former director regarding the sale confirmation process. The court also instructed KSFC to deposit the sale proceeds with the OL within a specified timeframe.
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