9911796707
TMI Blog1996 (4) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of various orders of this court, the official liquidator published tender notices in one issue of all editions of two Malayalam dailies and in all the Southern editions of an English newspaper. In response to the notice, 18 tenders for the purchase of the assets of the company were received by the official liquidator on August 23, 1995, with required earnest money deposit of Rs. 2,00,000. The details of the said offers are enumerated in Report No. 150 by the official liquidator. The highest offer was made by the State Bank of India for Rs. 52 lakhs. There was another offer by the FACT for Rs. 26,76,000. Since the highest offer was made by the State Bank of India, the official liquidator filed Report No. 150 seeking permission of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the request of the FACT. It was further stated that the official liquidator conducted the auction after giving wide publicity and the applicant-FACT participated in the said auction and quoted only Rs. 26.76 lakhs. At the same time, the State Bank of India quoted a very reasonable rate of Rs. 52 lakhs. It was further submitted by counsel for the State Bank of India that after, participating in the auction which was conducted in public, the FACT has no legal right to offer higher amount to see that the highest offer made by the State Bank of India in a public auction be not accepted. The official liquidator also filed a report stating that the auction was conducted after complying with all the formalities by giving wide publicity a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Supreme Court, in the above mentioned decision, stated: "... But it is not as if the court should go on adjourning the sale till a good price is got, it being a notorious fact that court sales and market prices are distant neighbours. Otherwise, decree-holders can never get the property of the debtor sold. Nor is it right to judge the unfairness of the price by hindsight wisdom. May be, subsequent events, not within the ken of the executing court when holding the sale, may prove that had the sale been adjourned a better price could have been had. What is expected of the judge is not to be a prophet but a pragmatist and merely to make a realistic appraisal of the factors, and, if satisfied that, in the given circumstances, the bid is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter confirmation of the sale, to purchase the property at a higher amount, the court is not bound to conduct an enquiry or set aside the sale". However, the Supreme Court in a recent decision in LICA ( P. ) Ltd. ( No. 1 ) v. Official Liquidator [1996] 85 Comp Cas 788 explained the decision in Navalkha and Sons v. Ramanuja Das [1970] 40 Comp Cas 936 (SC) and Radhey Shyam v. Shyam Behari Singh, AIR 1971 SC 2337. The court held as follows (page 791): "The purpose of an open auction is to get the most remunerative price and it is the duty of the court to keep openness of the auction so that the intending bidders would be free to participate and offer higher value. If that path is cut down or closed the possibility of fraud or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if there is no fraud or irregularity it is open to the company judge to exercise the discretion to conduct a re-sale so that the most remunerative price should be secured. Keeping in view the interest of the creditors, workmen, etc., the company judge exercised his discretion to reopen the auction. The Division Bench has interfered with the said order passed by the single judge. The finding of the Division Bench was reversed by the Supreme Court and upheld the decision of the learned company judge. The principle laid down by the Supreme Court in the above mentioned decision is applicable to the instant case as well. The question of adequacy of sale consideration is also one of the important factors to be taken note of by the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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