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TMI Blog2014 (10) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... IAL LEAVE PETITION NOS. 34782-34783 OF 2012 - - - Dated:- 28-10-2014 - Misra Dipak, Nariman Rohinton Fali And Lalit Uday Umesh, JJ. JUDGMENT- Dipak Misra, The factual exposition that is capable of being encapsulated in a real small compass, has, with some passage of time and turn of events, grown into a colossal structure having the effect potentiality to amaze and perplex any prudent man.The chronology of events pyramids a gradual financial structure, making it limpid how on certain occasions properties are sold for a song in the so-called sales made in the proceedings under the provisions of the Companies Act, 1956 (for brevity the Act ) and how with some intervention the said competitors metamorphose themselves into different incarnations, and the roses on the table turn into pearls and diamonds in the private closets. To put it succinctly, the price fixed at ₹ 6.25 crores for 291 plots has fetched, by the intervention of this Court, ₹ 70 crores for 113 plots. It is not change of heart, but the price reality that gets manifest. Not for nothing it has been said, money can solve the problems concerned with money . The large amount of money, we are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation report available and the highest offer was of ₹ 1.03 crores coming on record and under these circumstances, if the learned Company Judge found it proper not to accept the offer by confirming the sale, such an exercise cannot be said to be erroneous. On the contrary, the exercise would be in the larger interest of the corpus of the company. 7. Additionally the learned Company Judge, in the impugned order, has also recorded the fact that the total chunk of property comprises of various plots of different characteristics, namely, that on some plots, there were encroachments, for some plots, there were litigations and some plots were clear. Therefore, the learned Company Judge found that if the properties are sold as it is, comprising of all the plots simultaneously, it may create complications and, therefore, the learned Company Judge directed the Official Liquidator to prepare a list of the plots, which were not occupied by anyone and in respect of which, there was no dispute or litigation and thereafter to undertake the process to sell and dispose of the plots at a later stage. In view of the above, if the property is segregated into various compartments of clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deposit of the amount, the same shall be kept in a nationalised bank in a short-term interest bearing account. List on 11-8-2014. 4. After the said order was passed, certain deposits were made by 3 firms/companies. Regard being had to the said situation, on 19-8-20145, after referring to the earlier orders, the following order came to be passed: We have been apprised by the Registry that deposits which were directed6 by this Court have already been made and, therefore, all the parties have complied with the order. In view of the aforesaid position, we direct the Official Liquidator to proceed with the fresh auction. The factum of auction shall be advertised in local newspapers one in English and another in vernacular language. That apart there should be an advertisement in any daily national newspaper having adequate circulation in the country, regard being had to the issue involved in such a matter. The upset price shall be fixed at ₹ 10 crores. The advertisement shall be issued within a period of two weeks from today. The bidding process shall be completed within four weeks therefrom. As far as M/s Star and Associates is concerned, if they offer a bid of les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich were sub judice. Similarly, it was also mentioned that the order of status quo was operational in respect of 10 plots and the said order of status quo had been passed by a coordinate Bench of this Court. It was also postulated therein that certain plots had been encroached upon and certain plots were subject-matter of registered sale deeds, though no application had been filed before the Court for validation. In course of hearing of these petitions, we have been apprised that applications for validation are pending before the learned Company Judge. 6. On a perusal of the advertisement, it is clear as crystal that 113 plots admeasuring 91,960.70 sq m forming a part of Annexure A/I of the corrigendum were absolutely free and available for auction. 7. At this juncture, it is pertinent to mention that the bids which were offered in respect of the plots that were put to auction were opened before us. M/s Manoj I Naik and Associates, the appellant herein, has offered ₹ 10 crores eleven thousand; Mr Laxmi Narayan Garg has made an offer of ₹ 10 crores; M/s Star and Associates has offered ₹ 31 crores. It is submitted by Mr A. Sharan, learned Senior Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be done at the best price so that larger revenue coming into the coffers of the State administration would serve public purpose viz. the welfare State may be able to expand its beneficent activities by the availability of larger funds. This is subject to one important limitation that socialist property may be disposed at a price lower than the market price or even for a token price to achieve some defined constitutionally recognised public purpose, one such being to achieve the goals set out in Part IV of the Constitution. But where disposal is for augmentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market economy. An owner of private property need not auction it nor is he bound to dispose it of at a current market price. Factors such as personal attachment, or affinity, kinship, empathy, religious sentiment or limiting the choice to whom he may be willing to sell, may permit him to sell the property at a song and without demur. A welfare State as the owner of the public property has no such freedom while disposing of the public property. A welfare State exists for the largest good of the largest number more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not affect his exercise of his power. In the same way a private person has an absolute power to allow whom he likes to use his land, to release a debtor, or, where the law permits, to evict a tenant, regardless of his motives. This is unfettered discretion. But a public authority may do none of these things unless it acts reasonably and in good faith and upon lawful and relevant grounds of public interest. So a city council acted unlawfully when it refused unreasonably to let a locally rugby football club use the city's sports ground, though a private owner could of course have refused with impunity. Nor may a local authority arbitrarily release debtors, and if it evicts tenants, even though in accordance with a contract, it must act reasonably and within the limits of fair dealing . The whole conception of unfettered discretion is inappropriate to a public authority, which possesses powers solely in order that it may use them for the public good.' 13. At this juncture, we are obliged to state that in the case at hand, we are dealing with properties owned by a company under liquidation and there has been price fixation by the Company Court. Gitco has estimated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time-consuming. Mr A. Sharan, learned Senior Counsel, Mr Braj Kishore Mishra, learned counsel, Mr Vivek Singh, learned counsel and Mr Amar Dave, learned counsel, co-operated. Eventually, Mr Braj Kishore Mishra, learned counsel, appearing for M/s Star and Associates enhanced the price to ₹ 70 crores. Mr A. Sharan, Mr Vivek Singh and Mr Amar Dave did not think, as instructed by their respective clients, to bid further. Thus, we find that the report submitted by Gitco appears to be correct. That is a redeeming feature to pardon the Official Liquidator and we do so. 16. In view of the aforesaid, we direct M/s Star and Associates to deposit a sum of ₹ 20 crores by the end of November 2014 and another ₹ 40 crores by 15-3-2015 before the Registry of this Court. The amount shall be deposited in an interest bearing fixed deposit in UCO Bank, Supreme Court Compound, New Delhi. After ₹ 60 crores are deposited, ₹ 10 crores that have been deposited by the company before the Registry shall be added and handed over by way of a banker's cheque to the Official Liquidator along with interest. Needless to emphasise, if any of the directions is not complied with o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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