2021 (4) TMI 228 - HC - Companies Law

Auction - 5670 kilograms of copper ingots - appellant was the highest bidder - was not informed whether he is the successful bidder and demanded return of EMD - appellant thus not intending to proceed with the sale and requested for return of EMD - inconsistent stand of appellant - HELD THAT - It can be seen that the appellant is not having a consistent stand before the Court. By Annexure-R3 he requested for return of EMD on the ground that he has not been intimated as to whether he is the successful bidder. After receiving Annexure-R2 communication from the Official Liquidator regarding confirmation of sale also the appellant by Annexure-R4 informed the Official Liquidator that he is not intending to proceed with the sale and requested for return of EMD. The appellant filed Company Application No.75/2020 to set aside Annexure- R6 letter of the Official Liquidator whereby the EMD was forfeited. The appellant then turned around and filed C.A. No.76/2020 for direction to allow the appellant to remit the balance sale consideration in two installments within 3 months from the date of order after deducting the amount deposited as EMD. Later, the appellant filed C.A. No.78/2020 for direction for refund of EMD.Still later, C.A. No. 01/2021 was filed for direction to confirm the sale in favour of the appellant as 'directed' by the Court on 09.12.2020. The appellant cannot take inconsistent positions before the Court. The contention of the appellant that the Court had orally directed the appellant to remit the amount is clearly an attempt to resuscitate the C.A.Nos. 75 and 76 of 2020, which were already dismissed. Copper does not rust; but the appellant has come to Court with rusted hands. The appellant cannot be permitted to take advantage of his own wrong. The Company Court would not confirm the sale on re-auction, if best prices are not secured. Therefore, the said contention of the appellant is only to be rejected - Appeal dismissed.

Summary

Issues:
Challenge against order confirming sale of copper ingots, EMD forfeiture, delay in approaching the Court, inconsistent stand of the appellant, confirmation of sale, oral direction for remittance, market value of copper ingots.

Analysis:
The appellant participated in an auction for copper ingots and was the highest bidder. The Official Liquidator confirmed the sale, and the appellant was asked to remit the balance sale consideration within 30 days. Despite initial requests for EMD return, the appellant later filed applications with inconsistent requests regarding the sale and EMD. The Court dismissed the applications due to delay and allowed the re-tendering of the ingots. The appellant then filed for refund of EMD and sought confirmation of sale, claiming an oral direction for remittance. However, the Court found no such direction and observed the appellant's inconsistent positions before the Court.

The appellant failed to remit the balance sale consideration within the given time and only sought EMD return. The EMD was forfeited, and the Court allowed re-tendering. The appellant's subsequent actions, including delayed applications and claims of oral directions, were viewed skeptically by the Court. The Court noted the appellant's attempt to resuscitate dismissed applications and highlighted the importance of maximizing auction prices for stakeholders. The appellant's argument against re-auctioning due to market conditions was rejected, emphasizing the need to secure the best prices for asset distribution.

In conclusion, the Court dismissed the appeal, emphasizing the appellant's inconsistent stance, delay in compliance, and attempts to manipulate the situation. Despite considering imposing exemplary costs, the Court refrained from doing so, showing leniency. The judgment underscores the importance of consistency, timely compliance, and maximizing asset value in liquidation proceedings.