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TMI Blog2008 (8) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 2. This appeal has been filed against the impugned final judgment order dated 25-8-2005 and 26-8-2005 passed by the High Court of Gujarat at Ahmedabad in O.J. Appeal Nos. 69 and 70 of 2004 in O.J. Misc. Civil Application No. 175 of 2003 and CA No. 311 of 2004 respectively in Official Liquidator Report No. 49 of 2003. 3. Heard learned counsel for the parties and perused the record. 4. The facts of the case are that Hindustan Nitro Product (Gujarat) Ltd. was put under liquidation, and an official liquidator was appointed for it. The assets of the company were proposed to be auctioned, and hence the Court asked the official liquidator to obtain a valuation report. The official liquidator after obtaining the valuation report submitted it to the Court. The valuation of these assets, according to the official liquidator, was Rs. 2.55 crores. The property was then put up for auction on 25-3-2003 after advertising it in various well-known newspapers having wide circulation, including The Economic Times which is a well known newspaper having wide circulation in the business community. 5. Several bids were received and were opened in the Court. The highest bid was tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been filed prior to that date. However, in our opinion, entertaining objections after the sale is confirmed should not ordinarily be allowed, except on very limited grounds like fraud, otherwise no auction sale will ever be complete. 12. It is not in dispute that the auction was an open auction after wide publicity in well-known newspapers. Hence, there was nothing to prevent M/s. Manibhadra Sales Corporation and M/s. Castwell Alloys Limited to have participated in the auction, but they did not do so. There is no allegation of fraud either in this case. Hence, in our opinion, there was no justification to set aside the confirmation of the sale. 13. It appears that the reasoning of the learned Single Judge, as also of the Division Bench, was that the valuation of the assets of the company was made as if these assets were scrap. The reasoning of the learned Single Judge of the High Court thus seems to be that the assets in question was wrongly given out to be scrap and thus a proper bid was not obtained. 14. In our opinion, there is nothing to show that the assets in question which were auctioned-sold were ever given out to be scrap. They are not mentioned as scrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make any bid without making thorough enquiries about the said properties/assets. Hence, we are of the opinion that all the bidders in the auction knew what they were bidding for. Respondent No. 9 never participated in the auction and we fail to understand how he could start objecting to the auction more than one year after the same was confirmed. 21. The other reasoning of the learned Single Judge by which he set aside the confirmation of the sale is that the company was entitled to incentives and benefits like sales tax exemption and Modvat. The learned Single Judge has observed that the company M/s. Hindustan Nitro Product (Gujarat) Limited had made huge investments in development of an effluent treatment plant, and received permission for supply of gas for fuel from GAIL. The learned Single Judge was of the view that the intangible assets were required to be considered while fixing the value of the property. 22. We fail to understand how all this is relevant at all. After all, what was being sold was the assets of the company, and not the shares of the company, and these assets were fully described in the sale notice. 23. The learned Single Judge in our opinion also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court in Divya Mfg. Co. (P.) Ltd. s case ( supra ) cannot be treated as laying down any absolute rule that a confirmed sale can be set aside in all circumstances. As observed by one of us (Hon. Katju, J.) in his judgment in Civil Appeal No. 4908/2008 ( Dr. Rajbir Singh Dalal v. Chaudhary Devi Lal University, Sirsa dated 6-8-2008), a decision of a Court cannot be treated as Euclid s formula and read and understood mechanically. A decision must be considered on the facts of that particular case. 31. If it is held that every confirmed sale can be set aside the result would be that no auction sale will ever be complete because always somebody can come after the auction or its confirmation offering a higher amount. 32. It could have been a different matter if the auction had been held without adequate publicity in well-known newspapers having wide circulation, but where the auction sale was done after wide publicity, then setting aside the sale after its confirmation will create huge problems. When an auction sale is advertised in well-known newspapers having wide circulation, all eligible persons can come and bid for the same, and they will be themselves be to bla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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