2010 (11) TMI 1138 - HC - Indian Laws

Summary

Issues:
1. Challenge to the order of the learned Single Judge regarding auction sale and deposit of remaining bid amount.
2. Validity of extending time for depositing remaining bid amount.
3. Maintainability of Company Appeal No. 2 of 2008 filed by the company under liquidation.

Analysis:
1. The first issue in this case revolves around the challenge to the order of the learned Single Judge regarding the auction sale and the deposit of the remaining bid amount. The appellant, a secured creditor, contends that the auction purchaser failed to deposit the sale consideration within the stipulated period, rendering the auction sale void. However, the Court notes that the highest bidder, respondent no. 2, was granted an extension to deposit the remaining amount with a condition of 24% interest, which the Court deems reasonable and in the interest of justice. The Court cites Rule 7 of the Companies (Court) Rules, 1959, which empowers the Court to extend time as deemed fit, and Rule 9, which allows inherent power before the Company Judge to meet the ends of justice. The Court finds no merit in the challenge and dismisses Company Appeal No. 1 of 2008.

2. The second issue concerns the validity of extending time for depositing the remaining bid amount. The Court emphasizes that the extension granted by the learned Company Judge was in the interest of justice and aligned with the provisions of the Companies (Court) Rules. The Court observes that the secured creditor's interests were adequately addressed by the condition of 24% interest on the remaining amount. Additionally, the withdrawal of a prospective bidder offering a higher price weakened the appellant's argument. The Court concludes that there was no anomaly in the extension of time and dismisses the appeal.

3. The final issue pertains to the maintainability of Company Appeal No. 2 of 2008 filed by the company under liquidation. The Court notes that since the company is represented by the official liquidator, there is no provision under the law for the company to file the appeal. The Court deems the appeal not maintainable as the official liquidator is already handling the company's interests. Consequently, Company Appeal No. 2 of 2008 is dismissed.

In conclusion, both Company Appeals are dismissed by the Court, with no order as to costs. The Court affirms the validity of the extension of time for depositing the bid amount and upholds the auction sale process as conducted in the case.