THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Application No.653 of 2011 In Company Application No.1416 of 2004 In Company Petition No.83 of 1997 (Dated : 26-08-2011) Between: Sri G.V.Subba Reddy S/o Janardhan Reddy, R/o Nellore District …Applicant A n d M/s. Commercial Agro Products Pvt. Ltd. And another …Respondents THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Application No.653 of 2011 In Company Application No.1416 of 2004 In Company Petition No.83 of 1997 ORDER: This application has been taken out by one G.V.Subba Reddy under Rule 7 read with Rule 9 of the Companies (Court) Rules, 1959 seeking a direction to the Official Liquidator representing M/s. Commercial Agro Products Pvt. Limited (company in liquidation)-1st respondent to receive the balance sale consideration of Rs.21 lakhs in respect of lot No.9 of the immovable properties of the 1st respondent company (in liquidation) and execute a registered sale deed in his favour or his nominee and deliver possession of the same. 2. Background facts, in a nutshell, leading to filing of the instant application by the applicant, who is the auction purchaser, in brief, are: - This Court, by an order dated 24-7-1997 made in Company Petition No.83 of 1997, appointed the Official Liquidator as the provisional liquidator of M/s. Commercial Agro Products Pvt. Ltd. The Official Liquidator took possession of the properties of the company (in liquidation) and sought permission to sell the lands of the company (liquidation) situated at various places in Nellore District by inviting sealed tenders. The applicant stood as the highest bidder for Lot No.9. The offer made by the applicant came to be confirmed by this Court, as per order dated 4-8-2006 and the applicant was directed to pay the balance sale consideration within thirty days. Even before expiry of the time stipulated for payment of the balance amount, the applicant sought for extension of time by two more months. The Official Liquidator by letter dated 01.9.2006 granted extension of time for payment of balance sale consideration. The applicant did not deposit the balance sale consideration within the extended period of time. However, some developments took place in the meanwhile. M.Rambhushanam, Ex. Managing Director of the company (in liquidation) filed O.S.A.Nos.30, 45 of 2006 and 3 & 28 of 2007 challenging the various orders passed by this Court. The highest bidder in respect of Lot No.4 of the sale notification filed Company Application No.1529 of 2006 seeking a direction to the Official Liquidator to accept the balance amount and execute sale deed in his favour. All the OSAs came to be dismissed by a Division Bench of this Court on 02-07-2010. The relevant portion of the order passed by the Division Bench reads as hereunder:- “No doubt as is held by the Apex Court in SHANKARLAL AGARWALA AND OTHERS Vs. SHANKARLAL PODDAR AND OTHERS [ AIR 1995 SC 507(1), the order according sanction to sale is judicial one and no doubt it has to cater to all the elements as required under the law. However, in the present case, nothing has been pointed out nor spelt anything against its validity or correctness or otherwise. Nothing has been stated by the appellant as to how and to what extent he has any right or locus. In view of the same, prima facie, we are of the view that the appellant has totally failed to make out any case warranting interference of this Court at this juncture. Though, the main attack on the part of the appellant is that there are no reasons, especially when action is judicial one, will not stand to any reason or decision, more so, when the entire proceedings are at the behest of the company in liquidation itself and it is only in pursuance of the reasons as pointed out by the Official Liquidator in his application, the entire action has been taken. No attribution is also being made much less an allegation of any worth as against the Official Liquidator or the actions taken against him either in this Court dated 4.8.2006 in CA No.1416 of 2006 in C.P.No.83 of 1997 and directed him to remit the balance amount. He filed an application in C.A.No.1269 of 2006 in C P No.83 of 1997 seeking time to deposit the balance amount and this Court by orders dated 8.9.2006 extended the time by eight weeks. In terms thereof, the entire balance amount of Rs.39,86,000/- was deposited by the applicant therein through demand draft before the Official Liquidator. However, having regard to the orders of the Division Bench of this Court, he was informed that the said amount cannot be accepted and hence the same was returned. The sale ultimately was confirmed by the learned Single Judge as per orders dated 4.8.2006 and thereafter there has been stay of sale confirmation granted on 13.9.2006. However, the said orders are much later to the final order. Now, since the sale is already confirmed on 4.8.2006 even much before any orders passed by this Court and in view of the final disposal of such application, it can safely said that return of demand draft by the Official Liquidator is not correct. Accordingly, the application in CA No.1529 of 2006 is allowed and the Official Liquidator is directed to accept the demand draft for the balance amount of Rs.39,86,800/- from the applicant. For the aforesaid reasons the Appeals in O.S.A.Nos.30 and 45 of 2006 and 3 and 28 of 2007 are hereby dismissed and consequently the application in C.A.No.1529 of 2006 is allowed. No costs.” 3. According to the applicant, he came to know of the disposal of the appeals on 13-6-2011 when he received letter of the Official Liquidator dated 8-6-2011. Hence, the applicant moved the instant application seeking direction to the Official Liquidator to accept the balance sale consideration and execute the registered sale deed. For completion of narration of facts, I deem it appropriate to refer the letter dated 8-6-2011 addressed to the applicant, which reads as hereunder:- “ To Sri G.V.Subba Reddy S/o Janardhan Reddy North Rajupalem, Kodavalur Mandal, SPSR Nellore District. Sir, Sub: M/s. Commercial Agro Products (P) Limited (in liquidation) – Reg. Ref : Your letter dated 25-05-2011. &&&& With reference to above, I am to state that the Hon’ble Division Bench vide order dated 02-07-2010 made in O.S.A.Nos.30/06 and 3/07 along with OSA Nos.45/06 & 28 of 2007 dismissed the appeals filed by the Ex-Managing Director of the company while allowing C.A.No.1529/2006 filed by a purchaser. As regards, the remittance of balance sale consideration, it is made very clear that this office does not accept the said sale consideration in absence of any specific directions from the Hon’ble Court due to the reason that sufficient time has lapsed. This is for your information. Yours faithfully, Sd/-XXX (D.VIJAYA BHASKAR) OFFICIAL LIQUIDATOR HIGH COURT OF ANDHRA PRADESH HYDERABAD” 4. The Official Liquidator placed on record his report bearing No.145 of 2011. It is stated in the report that the applicant having sought for extension of time for two months to pay the balance sale consideration and failed to pay the balance sale consideration within the extended time. It is also stated in the report that the interim orders passed by the Division Bench of this Court in the appeals preferred by one M.Rambhushanam, Ex-Managing Director of the company (in liquidation) are in no way impediment to the applicant for depositing the balance sale consideration. Even otherwise, the appeals came to be dismissed on 2.7.2010 and the applicant never sought for extension of time pending the appeals before the Division Bench. 5. Heard learned counsel appearing for the applicant, learned counsel representing the Official Liquidator-1st respondent and learned counsel appearing for the 2nd respondent. 6. Learned counsel appearing for the applicant submits that the purchasers of some other lots have approached this Court seeking permission to pay the balance sale consideration and this Court allowed their applications and therefore, the case of the applicant stands on the same footing as that of the other purchases in which case, the relief sought for by the applicant deserves to be allowed. Learned counsel further submits that because of the stay granted by a Division Bench of this Court with regard to order of winding up of the company, the applicant could not deposit the balance sale consideration and after dismissal of the appeals, he approached the Official Liquidator to pay the balance sale consideration and the Official Liquidator refused to receive the same and there being no other go approached this Court seeking direction to the Official Liquidator to receive the balance sale consideration. In a way, his contention is that this Court is empowered under Rules 7 and 9 of the Companies (Court) Rules to grant extension of time, in view of payment of 20% of the sale amount by the applicant apart from EMD. In support of his submissions, learned counsel placed reliance on the orders passed by this Court in C.A.No.650 of 2010, C.A.No.747 of 2010 and 716 of 2010. The above-referred applications came to be disposed of on 19-4-2011. 7. Learned counsel appearing for the Official Liquidator submits that Lot No.9 of the sale notification comprises land to an extent of Ac.60-00 situated at Vadlapudi village, Nellore District. The applicant became highest bidder by offering Rs.31 lakhs and the sale in his favour came to be confirmed by this Court, by order dated 4-8-2006. The applicant has to pay the balance sale consideration on or before 01-11-2006. The applicant has not paid the balance sale consideration as on this day. He has not even enclosed the demand draft or pay order for the balance sale consideration to the instant application. Learned counsel would also contend that the applicant has not offered any valid reasons for not paying the balance sale consideration even after the dismissal of the appeals on 02-07-2010. Therefore, the applicant does not deserve for extension of time for payment of the balance sale consideration. 8. It is no doubt that this Court extended time for payment of the balance sale consideration on applications moved by purchasers in respect of other lots. But one thing is required to be noted that those purchasers approached this Court soon after dismissal of the OSAs filed by M.Rambhushanam, Ex-Managing Director. All the applications filed by those purchasers came to be allowed on 19-4- 2011. The applicant taking advantage of the orders passed in respect of purchasers of some other lots has approached this Court seeking extension of time by moving this application on 22-6-2011. Without fear of contradiction, it can be said that the applicant made no efforts to deposit the balance sale consideration either during the pendency of the OSAs or after dismissal of the OSAs. In my considered view, this application is a chance application moved by the applicant taking advantage of the other purchasers getting favourable orders from this Court. Such an attitude of the applicant deserves to be condemned. Had the applicant really intended to pay the balance sale consideration, he would have approached the Division Bench seeking permission to deposit the balance sale consideration like one of the purchaser moved C.A.No.1529 of 2006. After dismissal of the appeals in O.S.A.No.30 of 2006 and batch, there was no impediment for the applicant to deposit the balance sale consideration. After about an year of dismissal of the appeals, the applicant approached this Court seeking extension of time for payment of balance sale consideration. There are no bona fides on the part of the applicant in seeking extension of time for payment of the balance sale consideration. 9. In view of the above discussion, I find that the application is devoid of merits and accordingly, the same is hereby dismissed. _____________________ B.SESHASAYANA REDDY, J Dt.26-08-2011 RAR THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Application No.653 of 2011 In Company Application No.1416 of 2004 In Company Petition No.83 of 1997 (Dated : 26-08-2011)