2021 (7) TMI 785 - HC - Companies Law

Liquidation order - purchase of Lot No.4 being a property, which had no interested buyers - inspite of issuance of various advertisements, with regard to sale of property, no interested buyers came forward to purchase the property - HELD THAT - This Court is satisfied that there is no factual impediment in allowing the prayers of the applicants for purchasing Lot No. 4 of the land in question. ₹ 50 Lakh has admittedly been deposited by the applicants with the Official Liquidator as 20% of the total consideration money in terms of the offer letter. It is also admitted that there is no other buyer for the said plot of land as would be evident by the order dated 14th June, 2019. No other offers have since been received by the Official Liquidator. There is admittedly no such transfer application which is pending before this Court. There is also no proceeding pending in relation to the company (in liquidation) before the NCLT. No person or entity has come forward for reviving the Company (in liquidation). This Court is of the view that these factors sufficiently differentiate the present matter from the case of ACTION ISPAT AND POWER PVT. LTD. VERSUS SHYAM METALICS AND ENERGY LTD. 2020 (12) TMI 535 - SUPREME COURT where it was decided specifically in relation to an application for transfer of the winding up proceedings to the NCLT. It is also evident from the submissions made on behalf of the Official Liquidator that sufficient expenses have been incurred for publishing the four advertisements of the sale notices in newspapers and for valuation of the property. This would amount to circumstances which cannot be reversed if this Court were to abstain from proceeding with the matter - application disposed off.

Summary

Issues:
Intending purchasers seeking permission to buy Lot No.4 of a property in liquidation, jurisdiction of the Court over such matters post recent Supreme Court judgments, differentiation of present case from precedents like Action Ispat and Navinchandra Steels.

Analysis:
The applicants, intending purchasers of Lot No.4 of a property in liquidation, sought permission to buy the said property after no other interested party emerged despite multiple sale notices and orders. They had already deposited 20% of the total consideration money with the Official Liquidator. The Court acknowledged the lack of any other buyer and the absence of new offers, leading to the primary question of whether the Court retained jurisdiction in such matters post-recent Supreme Court judgments.

In the recent case of Action Ispat, the Supreme Court clarified the Court's discretion in transferring winding-up proceedings to the National Company Law Tribunal (NCLT) post-admission stage or after the appointment of a Company Liquidator. The decision emphasized the need for a case-by-case analysis based on the stage of proceedings. Similarly, Navinchandra Steels highlighted the importance of reviving corporate debtors in the public interest.

However, the present case differed as there was no pending transfer application to the NCLT or any revival proceedings initiated by a third party. This distinction, along with the absence of pending NCLT proceedings, indicated a clear deviation from the scenarios addressed in the aforementioned judgments. The Court also noted the expenses incurred by the Official Liquidator for advertisements and property valuation, which could not be reversed if the matter was not proceeded with.

Considering the unique circumstances of the case, the Court found no impediment in granting the applicants' request to purchase Lot No.4, now re-advertised as Lot No.1. The Official Liquidator was directed to assist the applicants in the sale process, leading to the disposal of the application in favor of the applicants.