9911796707
TMI Blog1996 (3) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... was ordered to be wound up by this court on May 14, 1987, in C. P. No. 32 of 1987. Its plant and machinery along with the land and building stood mortgaged to the Corporation. In C. P. No. 137 of 1994, this court, vide its order dated March 50, 1995, permitted the Corporation to sell the mortgaged property of the company in liquidation provided the official liquidator attached to this court as well as the Punjab National Bank are associated with the sale. It was also noted in the order that as and when the official liquidator is approached for inspection of the property of the company (in liquidation), he would permit the same. The auction sale was subject to confirmation by this court. Pursuant to the order passed in C.P. No. 137 of 1994, the Corporation got the advertisement inserted in Economic Times, The Tribune, Dainik Tribune, Steel Town (a local newspaper of Mandi Gobindgarh) and Nai Rashtriya Dhara (the local newspaper of Faridabad). This advertisement was published on July 26, 1995, July 23, 1995, July 23, 1995, August 5, 1995, and August 3, 1995, respectively. Vide this advertisement, sealed tenders were invited for sale of the industrial unit. The description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the value of the land alone would come to Rs. 5 crores approximately, whereas the property has been proposed to be sold for rupees one crore forty-one lakhs. The other objection taken is that the Corporation did not get the valuation of the property done from any approved valuer before inviting tenders. The last objection is that no proper publicity was done. Mr. A.C. Jain, advocate, counsel for the petitioner in C.A. No. 218 of 1995 has contended that the sale in favour of auction purchaser, namely, Precision Tools and Knives, is not liable to be confirmed as in terms of clause 3 of the terms and conditions of the auction, the auction purchaser has failed to deposit 25 per cent. of the amount within 30 days of the acceptance of offer. In this regard, he has placed reliance upon the judgment in Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahmad, AIR 1954 SC 349. He contended that the objector being the ex-director and also the guarantor was a necessary party, but no notice in regard to the proposed sale was sent to him by the Haryana Financial Corporation. He also contended that in this case, the sale was by tenders and the highest price which was to be accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handigarh towards earnest money. 3. Terms of payment 25 per cent. (inclusive of earnest money) within 30 days from the acceptance of the offer and the balance 75 per cent. in one and a half years in quarterly instalments with prevailing rate of interest from the date of acceptance of offer by the High Court. The title to land and building and ownership of plant and machinery shall be given to the successful purchaser only after the full sale consideration has been paid. 4.The properties mortgaged to the Corporation are offered for sale on an 'as is where is basis'. The tenderers shall quote for land, building and plant and machinery as a compact unit . . . 6. If the tender is accepted and the tenderer fails to comply with any of the conditions of sale, the earnest money deposited shall be forfeited. 7.The committee constituted by the Corporation reserves the right to reject any or all tenders without assigning any reason or negotiate with the tenderers for improving upon their offers. 8.The sale of the unit will be confirmed subject to its approval by the Punjab and Haryana High Court." It is apparent from a reading of the aforementioned conditions that the tenders wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the committee and signed by Mr. Sudhir Verma, additional general manager of the Corporation, and the statement of Mr. M.K. Kapoor, official liquidator at the Bar, that inter se bidding was done in his presence and on finding the bid of Precision Tools and Knives being the highest the committee there and then informed regarding acceptance of the same to the auction purchaser, I am of the view that the contention of Mr. Sandha-walia that the auction purchaser had no knowledge of the acceptance of the bid cannot be accepted. In terms of clause 3, on acceptance of the offer the auction purchaser was required to deposit 25 per cent. of the amount, inclusive of earnest money, within 30 days and this admittedly was not done and accordingly, this court has no option but to declare that the auction was not held in accordance with the terms and conditions of sale. The apex court in Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mahmad, AIR 1954 SC 349, in reference to Order 21, rule 85 of the Code of Civil Procedure, which provides "full amount of purchase money payable shall be paid by the purchaser into court before the court closes on the fifteenth day from the sale of propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in liquidation, the court is under an obligation to satisfy itself that the sale has been effected according to the terms and conditions of sale and shall not remain a mute or helpless spectator to an obvious or manifest illegality in conducting the sale. It was also contended by counsel for the objector that the property had not been sold in consonance with the guidelines laid down by the apex court in Mahesh Chandra v. U.P. Financial Corporation [1993] 78 Comp. Cas. 1 ; AIR 1993 SC 935. He contended that the property ought to have been sold by public auction instead of by inviting tenders. In Mahesh Chandra's case, [1993] 78 Comp. Cas. 1 ; AIR 1993 SC 935, the apex court has held that the Corporation being an instrumentality of the State is bound to act reasonably and fairly in dealing with the property of the debtor. The exercise of powers or discretion in its dealing would be subject to the same constitutional or public law limitation as the Government. The Corporation also equally must conform in its actions to the same standards that meet the test of justness, fairness, reasonableness and relevance. In the present case, as per clause 3 of the terms and conditions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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