2016 (11) TMI 26 - HC - Companies Law

Highest bidder - auction sales - Held that - In view of the prayer made by in the application for confirming the minutes recorded on 14.07.2016, the same is allowed and the Official Liquidator is directed to hand over the possession of the assets/property situated at Plot No.191, Village Bamanbore, Tehsil Chotila, District Surendernagar, Gujrat to Virti R. Shah- the highest bidder and the Official Liquidator is also allowed to refund the earnest money of the other bidders which were taken as per minutes dated 14.07.2016 and to pay the bill of expenses of publication of sale notice incurred by the Ex- Management/Secured Creditor on publication of sale notice in priority to other debts in terms of Rule 272 of the Rules. However, it is made clear that the physical possession of the property purchased by Virti R. Shah shall be handed over after receipt of the entire sale consideration.

Summary

Issues:
Consideration of highest bid for sale conducted by Official Liquidator under Companies Act, 1956.

Analysis:
The case involved an application filed under Section 457(3) of the Companies Act, 1956, read with Rule 9, 272 of the Companies (Court) Rules, 1959, for the consideration of the highest bid in terms of a sale conducted by the Official Liquidator. The respondent-company had been wound up, and the Official Liquidator had taken over its assets. There were two secured creditors, Punjab and Sind Bank and PICUP. The company had two units - one in Rajkot (Gujarat) and the other in Noida (UP). The Noida unit was hypothecated to PICUP, and the Gujarat unit was hypothecated with Punjab and Sind Bank. The sale of the Gujarat unit was under consideration, and six bids were received, with the highest bid being &8377; 66.51 lacs. A meeting was held where the highest bid was accepted, and the Official Liquidator sought confirmation of the bid.

The Official Liquidator made several prayers in the application, including the consideration of the highest bid, permission to hand over possession to the highest bidder, refund of earnest money to other bidders, and payment of expenses incurred for the sale notice publication. The Ex-Managing Director, now the sole secured creditor, had no objections to the sale. The Court allowed the application, directing the Official Liquidator to hand over possession to the highest bidder, refund earnest money to other bidders, and pay the expenses of sale notice publication. The physical possession would be handed over after receipt of the entire sale consideration.

In conclusion, the Court disposed of the application, confirming the highest bid and outlining the necessary steps for the transfer of possession and financial transactions related to the sale.