2015 (7) TMI 416 - HC - Companies Law

Liquidation of company - bonafide purchaser - Official Liquidator has filed a report seeking direction for taking physical possession of the premises - Held that - the applicant had purchased the premises from the company under liquidation by paying an amount of ₹ 12,51,000/-. The report of the valuer shows that the premises have been renovated. The Co-operative Society has transferred the share certificate in the name of the applicant. The Sale Deed is registered. It is informed that the Chairman who had executed the Sale Deed in favour of the applicant is no more. The valuation is carried out. The applicant has shown her willingness to deposit the difference of the amount. In view thereof, I am of the opinion that a case is made out in the peculiar facts and circumstances of this case for validating the sale in favour of the applicant by accepting the undertaking of the applicant that the balance amount will be paid. - Thus, the applicant will deposit an amount of ₹ 15,35,000/- (Rs.27,86,000/- minus ₹ 12,51,000/-) within a period of four weeks from today.

Summary

Issues:
Validation of sale in favor of the applicant by the company under liquidation for office premises in Ahmedabad, modification of possession order.

Analysis:
1. Validation of Sale: The applicant sought validation of the sale of office premises by the company under liquidation. The Official Liquidator visited the premises and was informed that the applicant had purchased the premises through a Sale Deed executed by the Chairman of the company in liquidation. The applicant claimed to be a bona fide purchaser, having paid an amount and completed necessary formalities such as stamp duty payment and registration. The Court directed a valuation to determine the market value of the premises at the date of sale.

2. Valuation and Market Value: The Court appointed a Valuer to ascertain the market value of the premises. The Valuer's report indicated the value at the date of sale to be higher than the amount paid by the applicant. The Official Liquidator suggested that if the applicant deposited the difference, the sale could be validated in consideration of the circumstances. The applicant agreed to pay the balance amount to validate the sale.

3. Court's Decision: After reviewing the documents and circumstances, the Court found that the applicant had purchased the premises in good faith and had taken steps to legitimize the transaction. Considering the peculiar facts of the case, the Court decided to validate the sale in favor of the applicant. The Court directed the applicant to deposit the balance amount within four weeks to complete the transaction. The order would only come into effect upon the deposit of the specified amount, and failure to comply would result in the Official Liquidator taking possession of the premises.

4. Conclusion: The Court allowed the company application, validating the sale in favor of the applicant upon the fulfillment of the condition to deposit the balance amount. The judgment emphasized the importance of the applicant's willingness to pay the correct market value to minimize losses for all parties involved. The Official Liquidator was instructed to take possession if the balance amount was not deposited within the specified time frame.