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TMI Blog2008 (8) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... st the order passed by the Division Bench of the High Court of Judicature at Allahabad on May 21, 2007, in Special Appeal No. 232 of 2007 ( Vishnu Kant Gupta v. Official Liquidator, High Court of Allahabad [2008] 141 Comp Cas 249 (All)). By the said order, the Division Bench allowed the appeal filed by Vishnu Kant Gupta-first respondent herein and set aside the order passed by the company judge on February 12, 2007, in Miscellaneous Company Application No. 2 of 1993. The facts giving rise to the present appeal are that Champaran Sugar Co. Ltd., was in financial doldrums. Proceedings had been initiated under the Sick Industrial Companies (Special Provisions) Act, 1985 and Board for Industrial and Financial Reconstruction (BIFR), by its order dated June 28, 1993, held that there was no possibility of rehabilitation of the company and the company must be ordered to be wound up. Recommendation was made to that effect by BIFR and it was forwarded to the High Court of Allahabad. Pursuant to the said recommendation, the High Court passed an order for winding up of the company on September 5, 1994. An official liquidator was appointed under the Companies Act, 1956. On January 4, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2007. But even before the service of notice, he came to know about the dismissal of appeals and vacation of stay order and he deposited an amount of Rs. 1.50 crores on February 9, 2007. On February 12, 2007, he offered Rs. 1.55 crores by a bank draft and also gave an undertaking to pay Rs. 2 crores within three days. Meanwhile, however, other persons also gave offers. One JHV Sugar offered Rs. 5.21 crores. Similarly, Shiv Shakti Chini Mills P. Ltd. offered Rs. 6 crores. Likewise, Sanjeev Kumar Chawdhary offered Rs. 6.50 crores. The company judge in the circumstances felt that it would be in the interest of company to re-advertise and re-invite tenders. Accordingly, he passed an order for re-advertisement of tenders and re-invitation of offers. The respondent herein was very much aggrieved by the order passed by the company judge. He felt that his offer of February, 2001 was the highest and more than six years had passed. Even according to the company judge, the offer made by the first respondent in 2001 was "reasonable" and hence it was accepted and there was no ground to interfere with the said action and the order passed by the company judge was illegal. He, hence, preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time. It was also submitted that for about six years, the respondent had not done anything. Apart from the fact that he had not made payment to the official liquidator, he had also not shown his readiness and willingness by depositing the amount in the company court so that it could be invested in any nationalized bank and could earn interest. Resultantly, almost the entire amount remained with the purchaser and now he wants to take advantage though much more attractive and higher offers have already been received by the official liquidator. Relying on various decisions of this court, counsel submitted that as per settled law, acceptance of offer by the highest bidder does not confer vested right in him to get the property. It is not only the power, but the duty of the company court to ensure that proper, adequate and reasonable price is fetched in respect of the property which is to be sold in public auction. It is in the interest of the company, its shareholders, creditors and workers as well as in larger public interest. It was also submitted that this court has held that even if sale is confirmed by a court and it has been brought to the notice of the court that property has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the circumstances, the order passed by the Division Bench is strictly in accordance with law and no interference is called for. It was also submitted that the Division Bench has considered the fact that after dismissal of appeal, the first respondent ought to have made payment immediately and since there was a gap of about three months, the Division Bench directed the first respondent to pay interest at 10 per cent, which came to rupees ten lakhs. The said amount has been paid by the first respondent. But even if this court feels that the said amount is not adequate, an appropriate direction may be issued so that additional amount as this court deems fit can also be paid by the first respondent. Having heard learned counsel for the parties, in our opinion, the appeal deserves to be partly allowed. So far as principles relating to auction sale and confirmation thereof are concerned, the law is well-settled. Very recently, in FCS Software Solutions Ltd. v. La Medical Devices Ltd. [2008] 7 JT 499 ([2008] 144 Comp Cas 391 (SC)), we have elaborately dealt with all these principles and it is not necessary to burden this judgment by referring to all the cases by reiterating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustified in ordering payment of interest only from December, 2006 to February, 2007. The admitted position is that the first respondent had paid only Rs. 10 lakhs as against Rs. 5 crores which was also equally relevant and important factor. In our considered opinion, while exercising discretionary and equitable jurisdiction under article 136 of the Constitution, we have to bear in mind the said fact as well which is very important, relevant and material. On overall considerations and for the reasons stated hereinabove, in our judgment, ends of justice would be served if we direct that sale in favour of first respondent be confirmed with condition that the first respondent will pay an additional amount of rupees three crores. It will be over and above the payment which has been made by him. Such payment will be made within a period of three months. If the payment is not made as per this order, the first respondent will not be entitled to claim any right on the basis of the bid made and accepted on January 31, 2001 and fresh auction will be conducted as per the order of the company judge. The appeal is disposed of accordingly. In the facts and circumstances of the case, there will ..... 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