2023 (8) TMI 555 - HC - Companies Law

Auction of assets of company under liquidation - Refusal to extend the period for depositing the amount offered by the present appellant towards sale consideration - HELD THAT - It is an admitted fact that the present applicant was supposed to deposit an amount of Rs. 73,23,30,000/- within a period of thirty days starts from the intimation of confirmation of the tender which was on 02.02.2023. The amount was to be paid on or before 03.03.2023. It is pertinent to note that the learned Single Judge, by an order dated 02.03.2023, that is, one day prior to the completion of the aforesaid period, granted thirty days time to deposit the entire amount. But, only Rs. 37 Crores was paid by the applicant. It is true that, under Clause 13.3 of the Terms and Conditions of the Approved E-Auction, High Court has the right to rescind, amend, delete, invalidate any of the settled terms and conditions. The High Court exercised its power once and extended the time for depositing the entire sale amount, but the applicant failed to comply the same. The observations made by the learned Single Judge agreed upon - there are no reason to interfere with the judgment of the learned Single Judge - appeal dismissed.

Summary

Issues:
The issues involved in this case are the refusal to extend the period for depositing the sale consideration amount by the learned Single Judge, the subsequent application seeking permission to pay a partial amount and extend the time for the balance, and the rejection of the willingness to pay the entire amount by the applicant.

Refusal to Extend Deposit Period:
The original applicant challenged the order refusing to extend the period for depositing the sale consideration amount. The company, Travancore Rayons Limited, was ordered to be liquidated, and the highest bidder, the present applicant, was granted 30 days to deposit the balance amount. The applicant sought permission to deposit only 10% initially and requested three months to pay the balance, which was partially granted by the Single Judge. However, when the applicant later sought to pay a partial amount and extend the time further, objections were raised, leading to a decision where the applicant was allowed to accept a partial payment but not granted further extension without affecting the pending decision.

Rejection of Full Payment Request:
The applicant expressed willingness to pay the entire sale amount, but this was rejected by the Single Judge, leading to the appeal. The appellant argued that the High Court had the authority to amend auction terms and conditions and should have accepted the full payment offer, with the applicant also willing to pay interest for the delay. On the contrary, the respondents and the Official Liquidator opposed the extension, citing the original auction terms that required full payment within 30 days. The Single Judge's decision was supported by the Official Liquidator, and upon review, the High Court found that the applicant failed to comply with the extended time granted earlier, leading to the dismissal of the appeal.

Conclusion:
The High Court dismissed the writ appeal, upholding the decision of the learned Single Judge to refuse further extension for depositing the sale consideration amount. Despite the High Court's initial extension of time, the applicant only paid a partial amount, leading to the rejection of the request for additional time. The Court found that the applicant did not fulfill the conditions set by the High Court, and therefore, upheld the Single Judge's decision, emphasizing the importance of compliance with auction terms and conditions.