2018 (3) TMI 1789 - HC - Companies Law

Auction - case of respondents is that no orders should be passed on the report of auction as there was a person available with him ready to offer better price - HELD THAT - The highest bid was offered by the M/s ECR Buildtech Pvt. Ltd., New Delhi for an amount of ₹ 1 crore 81 Lakhs at the time of bidding. The earnest money deposited (EMD) of all the unsuccessful bidders were returned on the same date and the EMD amount of the highest bidder has been deposited by the Official Liquidator with Punjab National Bank, Jaipur on 22.02.2018. Prayer has been made to accept the highest bid offered by ECR Buildtech Ltd., New Delhi by the Official Liquidator. Taking into consideration the reserve price and noting the aforesaid proceedings, it is deemed appropriate to accept the highest bid offered by ECR Buildtech Pvt. Ltd. for a sum of ₹ 1 crore 81 lakhs subject to abiding by the terms and conditions laid down by the Official Liquidator in his notice inviting tenders. The Official Liquidator is directed to proceed further.

Summary

Issues:
1. Unfair practices adopted by respondents to delay orders on auction report.
2. Validity of highest bid offered by M/s ECR Buildtech Pvt. Ltd.
3. Decision on acceptance of the highest bid by the Official Liquidator.

Analysis:
1. The judgment addresses the issue of unfair practices adopted by the respondents to delay the issuance of appropriate orders regarding the sale of land and buildings belonging to the company in liquidation. The court notes the initial objection raised by a counsel representing the respondents regarding a potential higher bid, which was later withdrawn without any supporting documentation provided by the new counsel appearing for the respondents. The court observes the attempts to delay proceedings and emphasizes the need for fair practices in such matters.

2. The judgment details the auction process conducted by the Official Liquidator for the sale of the company's property. The reserve price for the land and buildings was set at ?1 crore 38 lakhs, with an earnest money deposit (EMD) of ?34,53,000. Multiple bids were received, with the highest bid of ?1 crore 81 lakhs offered by M/s ECR Buildtech Pvt. Ltd. The court reviews the bidding process, including the presence of tenderers and the disqualification of an interested party, Jai Balaji Industries, due to non-compliance with tender submission requirements. The EMD of unsuccessful bidders was returned, and the EMD of the highest bidder was deposited with a bank.

3. Considering the reserve price, the bidding process, and the highest bid offered, the court deems it appropriate to accept the bid of ?1 crore 81 lakhs by M/s ECR Buildtech Pvt. Ltd. The judgment directs the Official Liquidator to proceed with the acceptance of the highest bid, subject to adherence to the terms and conditions outlined in the tender notice. The decision aims to ensure a fair and transparent process in the sale of the company's assets during liquidation proceedings, ultimately facilitating the orderly resolution of the company's affairs.