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TMI Blog2004 (10) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... se to this appeal are that winding up proceedings are pending before the Company Judge. The advertisement was issued in four newspapers, i.e., Times of India, Economic Times, Dainik Jagaran and Amar Ujala fixing the date for sale of the assets of the company, of which the present appellants are the ex-directors. In response of the said advertisement, four tenders had been received by the Court. The learned counsel for the parties were heard before the proceedings of auction, etc., started and it was agreed that the property should not be sold for a sum less than two crores. Respondent No. 2 had been the highest bidder for a sum of Rs. 2.25 crores. The said offer was accepted tentatively vide order dated 15-4-2004 taking into conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recall the said order was filed after four months. Even today, there is no buyer for a better price. Therefore, the appeal is liable to be dismissed. 5. We have considered the rival submissions made by the learned counsel for the parties and perused the record. 6. Order dated 15-4-2004 reads as under : "In view of the report of approved valuer, the Court considers the said amount to be quite reasonable. The offer of Rs. 2.25 cores made by Udai Rice and Dal Mill is, therefore, tentatively accepted. However, it is clarified that if within 30 days from today, any person offers one and half times of the said amount, i.e., Rs. 3 crores 37 lakhs and 50 thousand or more, the offer of the purchaser Udai Rice and Dal Mill will be rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sold. For that, it is always better to have some valuer s report to serve as a test and to guide the Court in concluding where a grossly unjust offer was being made. The judgment debtor may be given an opportunity to bring the best buyer; but in case he fails or does not bother at all, the Court must proceed making an intelligent guess in the given circumstances and the sale must be approved, for the reason that the Court cannot keep the proceedings pending for ever in the hope of prospects of higher prices in the auction. The Court observed as under : ". . .Court sale is a forced sale and, notwithstanding the competitive element of a public auction, the best price is not often forthcoming. The Judge must make a certain margin for this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly, in Navalkha Sons v. Ramanya Das [1969] 3 SCC 537; Allahabad Bank v. Bengal Paper Mills Co. Ltd. [1999] 4 SCC 383 2 and Ram Maurya v. Kailash Nath [1999] 9 SCC 276 and held as under : "At the outset, we would state that in proceedings for winding up of the company under liquidation, the Court acts as a custodian for the interest of the company and the creditors. Therefore, before sanctioning the sale of its assets, the Court is required to exercise judicial discretion to see that properties are sold at a reasonable price. For deciding what would be a reasonable price, valuation report of an expert is a must. Not only that, it is the duty of the Court to disclose the said valuation report to the secured creditors and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. [See Duncans Industries Ltd. v. State of U.P. [1999] 9 JT 421 (SC)]. The difference between valuation and upset price has been explained in the case of B. Sushila v. Saraswathi Ammal AIR 1970 Mad. 357, in which it has been held that fixation of an upset price may be an indication of the probable price which the land may fetch from the point of view of intending bidders. However, notwithstanding the fixation of upset price and notwithstanding the fact that a bidder has offered an amount higher than the reserve/upset price, the sale is still open to challenge on the ground that the property has not fetched the proper price and that the sale be set aside. That the fixation of the reserve price does not affect the rights of the part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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