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TMI Blog2008 (5) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... gain - the order passed by the Company Judge and confirmed by the Division Bench of the High Court are in consonance with law. But we may not be understood to have expressed any opinion on the allegations levelled by the appellant against the Official Liquidator. As and when the matter comes up for consideration before an appropriate Court/Authority, it will be decided on its own merits irrespective of the disposal of this appeal by us. - CIVIL APPEAL NO. 4271 OF 2008 - - - Dated:- 9-7-2008 - C.K. THAKKER AND D.K. JAIN, JJ. Dr. A.M. Singhvi, S.K. Dubey, Sunil Sharma and K.V. Mohan for the Appellant. Ranjit Kumar, Rajendra Singhvi, Mrs. Madhur Dadlani, Ms. Maitreyi Singhvi, Brij Bhusan, Arun Kathpalia, Rakesh Kumar and Ms. Shipra Ghose for the Respondent. JUDGMENT C.K. Thakker, J. - Leave granted. 2. The present appeal is filed by the appellant against an order passed by the Division Bench of the High Court of Punjab Haryana on 15-10-2007 in Company Appeal No. 10 of 2006. By the said order, the Division Bench of the High Court dismissed, the appeal filed by the appellant-herein and confirmed the order passed by the Company Judge on 16-2-2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed the auction sale in favour of the appellant-Company on 24-3-2005. The Company Judge also directed the Official Liquidator to hand over possession of the Unit by executing sale deed in favour of the appellant after receiving full and final payment within one month. The Official Liquidator conveyed the appellant vide his letter dated 4-4-2005 that an order was passed by the Company Judge in favour of the appellant. The appellant was also asked to deposit the rest of the amount immediately. On receiving the letter dated 4-4-2005 from the Official Liquidator, the appellant deposited the remaining amount on 12-4-2005. The appellant thereby became entitled to receive possession and execution of sale deed in respect of immovable property of the Company. By a communication dated 21-4-2005, the Official Liquidator informed the appellant that possession of the property would be handed over to the appellant on 6-5-2005 at 11.30 a.m. 4. According to the appellant, thereafter the Official Liquidator did not act legally and in accordance with law. On 6-5-2005, though the officers of the appellant waited at the site for getting possession of the property, neither the Official Liq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The appellant in the meanwhile challenged, the order of the Company Judge and, as observed, earlier, the appeal was dismissed by the Division Bench. It is this order which is challenged in the present appeal. 6. Notice was issued by this Court on 23-2-2007. Affidavits and further affidavits were filed thereafter. Considering the nature of litigation, the Office was directed to place the matter for final hearing on a non-miscellaneous day and that is how the matter has been placed before us. 7. We have heard the learned counsel for the parties. 8. The learned counsel for the appellant contended that the Company Judge as well as the Division Bench of the High Court were wholly wrong in setting aside the auction sale in favour of the appellant. It was submitted that pursuant to sale notice, tenders were invited, twelve persons offered their bids. The bid of the appellant was highest. In consonance with law, therefore, the said bid was accepted and the appellant deposited, amount of 25 per cent as required by law. It also paid the remaining amount of 75 per cent. Sale was confirmed in favour of the appellant and direction was issued by the Company Judge to the Offici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this is allowed and sales are set aside, there is no end to it. In absence of illegalities or material irregularities, credibility of court sales cannot be doubted nor such sales be set aside. If price is the only consideration, today the property is worth Rs. 5.5 crore. In that case, sale in favour of respondent No. 3 should also be set aside and fresh auction must be ordered. 14. It was stated that the appellant was a bona fide purchaser. It was not even the allegation of the Official Liquidator or any other bidder that highest bid of the appellant for Rs. 1.47 crore was in any way improper, insufficient or inadequate. The appellant, hence, cannot be deprived of the fruits to which it was otherwise entitled to. On all these grounds it was submitted that the order passed by the courts below deserve to be set aside. 15. On behalf of the Official Liquidator, an affidavit is filed. It may, however, be stated that the present incumbent is different than the one who was in of the office at the relevant time. The deponent denied the allegations levelled by the appellant but stated that in view of the higher offer received by the then Official Liquidator and stay granted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of respondent No. 3 for an amount of Rs. 3.5 crore which was substantially higher than the bid of the appellant for Rs. 1.47 crore may not be interfered with. 19. It was further stated that when respondent No. 3 made an offer of Rs. 3.5 crore, the Court, in fairness, extended opportunity to the appellant if it wanted to participate in the proceedings and willing to offer higher price. The appellant, however, refused to take part as also refused to pay anything more than what was offered earlier. It is, therefore, not open to the appellant to complain and insist to get ownership rights and possession of property for Rs. 1.47 crore. 20. It was stated that respondent No. 3 has paid full amount; got sale deed executed in its favour and had spent substantial amount thereafter and on that ground also, the Court may not exercise discretionary and equitable jurisdiction under Article 136 of the Constitution. 21. Having heard the learned counsel for the parties, in our opinion, no case has been made out by the appellant against the order passed by the High Court. From the facts stated above, it is clear that, in November, 2004, the bid of the appellant was highest and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property being sold at an inadequate price, whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. It is the duty of the Court to satisfy itself about the proper valuation. But once the Court comes to the conclusion that the price offered is adequate, no subsequent higher offer can constitute a valid ground for refusing confirmation of the sale or offer already received. 26. In Kayjay Industries (P.) Ltd. v. Asnew Drums (P.) Ltd. [1974] 2 SCC 213, this Court held that it is the duty of the Court to accept the highest bid and the Court is not bound to go on adjourning the sale on the basis of valuation report. Referring to and relying on Navalkha, the Court stated that in public sales, the authority must protect interest of the parties keeping in view the fact that a Court sale is a forced sale and, notwithstanding the competitive element of public auction, the best price is not often forthcoming. 27. In Union Bank of India v. Official Liquidator High Court of Calcutta [2000] 25 SCL 431, this Court observed that in auction sale of the property of the Company which is ordered, to be wound up, the Company Court acts as a custodia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale by a Court at grossly inadequate price, whether or not it is a consequence of any irregularity or fraud in the conduct of sale, could be set aside on the ground that it was not just and proper exercise of judicial discretion. In such cases, a meaningful intervention by the Court may prevent, to some extent, underbidding at the time of auction through Court. [Emphasis supplied] 33. In Gajraj Jain v. State of Bihar [2004] 52 SCL 746, this Court reiterated that in absence of valuation report and reserve price, the auction sale becomes only a pretence. If there is no proper mechanism and if the intending purchasers are not able to know details of the assets or itemised valuation, auction sale cannot be said to be in accordance with law. If publicity and maximum participation is to be attained, all bidders must know the details of the assets and the valuation thereof. 34. In the present case, it was alleged that there were several irregularities in the first auction. The tender notice did not state valuation of movable and immovable property; reserve price was not fixed, inventory of plant and machinery was not made available, etc. If on consideration of these f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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