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TMI Blog1996 (5) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived out of which three tenderers receded and took refund of the earnest money deposits. Smt. P.A. Radha and J. Vijayalakshmi offered Rs. 143 lakhs while G.S. Rao offered Rs. 141 lakhs. During the negotiations with the tenderers, Sri G.S. Rao withdrew from the participation and sought refund of the earnest money deposit. Finally, negotiations were conducted with the sole and remaining tenderer, P.A. Radha and J. Vijayalakshmi, who agreed to enhance the bid by rupees one lakh, i.e. , Rs. 144 lakhs and agreed to make a down payment of 35 per cent. and the balance 65 per cent. in three years from the date of confirmation of the sale in quarterly instalments with a moratorium period of one year together with interest at the current lending rates. It is also stated that the tenderer has undertaken not to withdraw the offer pending permission of this court for finalising the tenders and that he deposited 35 per cent. down payment by November 30,1995. This offer was approved by the board of directors of the S.F.C. on December 11, 1995, and was also approved by the A.P.I.D.C. and I.F.C.I., the other financial institutions. It is also stated that an amount of Rs. 89.38 lakhs is due to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15, 1995. It was also made a condition that the balance of 65 per cent. has to be paid in three years in instalments with a one year moratorium carrying current rates of interest. This was agreed to by the S.F.C. and also by the A.P.I.D.C. and the I.F.C. I am of the opinion that this offer of Smt. Radha and Vijayalakshmi cannot be accepted for the following reasons : (1)The bio-data of these persons along with complete details of companies with which they are associated is not furnished though required under condition No. 4 of the terms and conditions; (2)Even though there was authorisation in favour of Mr. P.S.R. Krishna Rao for negotiations there is no confirmation by the two pro posed buyers of their final offer; (3)Though it is stated in para 11 of the affidavit filed on behalf of the A.P.S.F.C. that Smt. Radha and Smt. Vijayalakshmi deposited 35 per cent. down payment by November 30, 1995, the record shows that P.S.R. Krishna Rao has written on November 29, 1995, to the S.F.C. that the petitioners have paid Rs. 12.6 lakhs on November 26, 1995, by two demand drafts and agreed to pay further sum of Rs. 16 lakhs by November 30, 1995, and the balance by December 15, 1995. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... talments nor had it specified the period within which the entire consideration shall be remitted. One Buxa Holdings Limited which offered Rs. 6 crores earlier raised its offer to Rs. 8 crores. That offer was accepted by the court with the condition that the balance consideration after deducting 10 per cent. earnest money deposit shall be paid in two instalments of Rs. 50 lakhs for the first two years and thereafter in half-yearly instalments of Rs. 30 lakhs each. No interest was stipulated. The Division Bench of the High Court modified the terms to the effect that for the first two years, the instalments payable will be Rs. 60 lakhs each and thereafter half-yearly instalments will be in sums of Rs. 40 lakhs each. Aggrieved by this, the financial institutions approached the Supreme Court contending that the Buxa Company should be directed to pay the entire balance consideration immediately or in the alternative the number of instalments may be reduced with a provision for interest. Upholding their objections, the Supreme Court observed as follows (at page 312): "It would have been better if the sale notice itself had prescribed the number of instalments which would be granted to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e corporation in selling the assets of a company which was a defaulter. We are concerned here with the sale of assets of the company which is being wound up and permission granted to A.P.S.F.C. to remain outside the winding up proceedings was subject to the condition that the sale has to be confirmed by this court. It is obvious that in confirming the sale, the court has to keep in mind the interests of shareholders, workers and creditors of the company under liquidation. In Lica ( P. ) Ltd. ( No. 1 ) v. Official Liquidator [1995] 85 Comp. Cas. 788 (SC), it was observed by the Supreme Court that (at 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 to secure inadequate price or underbidding would loom large. The court would, therefore, have to exercise its discretion wisely and with circumspection and keeping in view the facts and circumstances in each case. One of the terms of the offer in this case is that even confirmation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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