THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY APPLICATION No.323 OF 2010 IN COMPANY PETITION No.57 OF 1999 Dated: 27.12.2010 In the matter of Companies Act, 1956 And In the matter of Sirsilk Limited (In liquidation) Between: 1. Tuduru Venkata Ramana and 2 others. … Applicants And 1. The Official Liquidator, High Court of A.P., And the Liquidator of M/s. Sirsilk Limited (In liqn.)., And 2 others. .. Respondents THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY APPLICATION No.323 OF 2010 IN COMPANY PETITION No.57 OF 1999 O R D E R : By order dated 26.04.2001 made in C.P.No.57 of 1999 this Court ordered winding up of M/s. Sirsilk Limited and the Official Liquidator attached to this Court was appointed as the Liquidator. Pursuant thereto, the Official Liquidator took possession of the properties of the company in liquidation situated at Sirpur Kaghaznagar, Adilabad District. All the said properties, comprising of vacant land, quarters and commercial structures were got valued through M/s. APITCO Limited and some of the assets were disposed of. In order to bring the unsold assets for sale, the Official Liquidator filed Company Application No.343 of 2009 and this Court by order dated 18.04.2009 permitted the Official Liquidator to sell the assets of the company in liquidation in 8 different lots after getting valued through a Chartered Valuer. While approving the terms and conditions for sale of the properties and the draft notice inviting sealed tenders as proposed by the Official Liquidator, this Court further ordered that in the draft notice one more note may be added indicating that the bidders may also opt to bid for lesser extent of land and correspondingly submit the EMD at 10% of the valuation offered by them. Accordingly, the Official Liquidator issued sale notice dated 6.5.2009 putting the land to sale in 8 lots and also permitting the bidders to submit their tenders for lesser extent of land in a lot. Accordingly, the Official Liquidator put the assets in 8 lots for sale on “as is where is and whatever there is” basis. So far as Lot No.6 is concerned, 14 tenders were received. After opening the tenders the Official Liquidator held inter se bidding as well as negotiations and recommended the bid of M/s. Balaji and Company (3rd respondent herein) for the entire extent of land admeasuring Ac.186-39 cents at the rate of Rs.1,55,000/- per acre (total amount of Rs.2,88,90,450/-) for confirmation. This Court by order dated 8.10.2009 in C.A.No.343 of 2009 accepted the said highest offer made by the 3rd respondent-M/s. Balaji Company in respect of Lot No.6. However having taken note of the pendency of C.A.No.662 of 2009 filed by one Ravi Ramamohana Rao claiming an extent of Ac.4-28 cents in Sy.No.77 which is included in Lot No.6, it was made clear by this Court that any confirmation of sale of Lot No.6 should be subject to the condition that the property claimed by Ravi Ramamohana Rao shall stand excluded for the present from the extent of the land offered for sale. In terms of the said order, the Official Liquidator held negotiations with the 3rd respondent-M/s. Balaji Company and in the meeting held on 16.11.2009 the 3rd respondent had accepted to take either entire Lot No.6 to an extent of Ac.186-39 cents or excluding the land of Ac.4-28 cents in Sy.No.77 at the rate of Rs.1.55 Lakhs per acre. While so, the applicants herein who were the unsuccessful bidders in respect of Lot No.6, preferred an Appeal (O.S.A. (Sr) No.7943 of 2009) before the Division Bench against the order dated 8.10.2009 in C.A.No.343 of 2009 contending that the offer made by them was the highest and therefore the acceptance of the offer of M/s. Balaji Company was illegal. The said Appeal was dismissed by judgment dated 11.03.2010 as not maintainable observing that the appellants got remedy before the Company Court by making appropriate application. Thereafter the said unsuccessful bidders filed the present application with a prayer to set aside the sale of Lot No.6 in favour of the 3rd respondent-M/s. Balaji Company. It is pleaded by them that they submitted tenders for lesser extents of land in Lot No.6 as was permitted in the sale notice. It is contended that the price quoted by them, if calculated for the entire extent, would be the highest and that the Official Liquidator had wrongly submitted a report before this Court recommending the sale in favour of the 3rd respondent-M/s. Balaji Company misrepresenting that it was the highest bidder. It is alleged that the 3rd respondent had been in active collusion with the Official Liquidator and the entire proceedings were conducted by the Official Liquidator to benefit M/s. Balaji Company giving them undue importance. It is further contended that the said facts could not be brought to the notice of this Court since there was no notice to them before passing the order dated 8.10.2009. It is also contended that the acceptance of sale in favour of the 3rd respondent-M/s. Balaji Company was against the earlier order passed by this Court on 18.4.2009 permitting the bidders to submit tenders even for lesser extent of land. The applicants have also expressed their willingness to pay Rs.3 Crores instead of Rs.2.88 Crores and odd offered by the 3rd respondent-M/s. Balaji Company. While alleging that the 3rd respondent has not paid any substantial amounts so far, it is claimed that the applicants are ready to deposit Rs.1 Crore within 4 weeks and the remaining amount would be deposited within 8 weeks thereafter since they have substantial funds. Thus it is prayed to set aside the decision to award Lot No.6 in favour of the 3rd respondent-M/s. Balaji Company. The Official Liquidator filed a report dated 10.6.2010 stating that the applicants who had initially submitted their bid for part of the land in Lot No.6, had now come up with an offer to purchase the entire extent of land in Lot No.6 for a sum of Rs.3 Cores (at the rate of Rs.1,60,953/- per acre) as against the highest offer of Rs.2,88,90,450/- (at the rate of Rs.1,55,000/- per acre) received from M/s. Balaji Company. It is further stated that in view of the pendency of C.A.No.662 of 2009 before this Court the applicants have to give their consent either to purchase the entire extent of land in Lot No.6 or excluding the land to an extent of Ac.4-28 cents which is the subject- matter of C.A.No.662 of 2009. The 3rd respondent-M/s. Balaji Company filed a counter- affidavit denying the alleged collusion with the Official Liquidator and the secured creditor and stating that its tender being the highest for the entire extent of land in Lot No.6 was rightly accepted. While stating that they have already paid a sum of Rs.24 Lakhs as EMD and they have also made ready the remaining sale consideration and holding it in the Bank accounts since last one year, it is contended that the present application for setting aside the acceptance of the 3rd respondent’s highest bid is nothing but abuse of process of the Court and is liable to be dismissed in limini. I have heard Sri G. Narendra Raj, the learned Counsel for the applicants, Sri M. Anil Kumar and Sri P.V. Markendeyulu, the learned Counsel for the Official Liquidator and the Industrial Development Bank of India respectively as well as Sri R. Raghunandan, the learned counsel appearing for the respondent No.3. It is not in dispute that in the sale notice dated 6.5.2009 it was made clear that the offers could be given either for the entire extent of land in the respective lots or a part thereof for the proportionate value duly taking the Minimum Upset Price mentioned therein as the Base Value. The material available on record shows that out of the 14 bids received in respect of Lot No.6 except the respondent No.3 all other bidders made offers for small bits out of Lot No.6. The respondent No.3 had admittedly submitted its tender for the entire extent of Ac.186- 39 cents offering a price of Rs.1.55 Lakhs per acre which would aggregate to Rs.2.88 Crores. The three applicants in the present application have altogether offered to purchase Ac.29-00 cents at the rate of Rs.8 Lakhs per acre. May be that, the offer made by the applicants at the rate of Rs.8 Lakhs per acre would be higher than the price that was offered by the respondent No.3, however the fact remains that the 3rd respondent has come forward to purchase the entire extent of land, whereas the applicants wanted to purchase small bits of land. Having regard to the fact that the 3rd respondent’s offer was in respect of the entire land, whereas the offers of the applicants herein were in respect of smaller bits situated in prime locations, the Official Liquidator thought it fit to accept the offer made by the 3rd respondent and the said recommendation was accepted by this Court by order dated 8.10.2009. It is true that this Court ordered that bidders should be allowed to make their offers for lesser extents of land also, however, as rightly contended by the learned counsel for the 3rd respondent the offers so received for small bits cannot be compared with the offer that was received for the entire extent of Ac.186-39 cents. From the vague allegations made in the affidavit filed in support of this application, absolutely no case could be made out to show that the sale in favour of the 3rd respondent was vitiated by fraud or collusion or any other unfair practice. The discretion exercised by the Official Liquidator in recommending the offer made by the 3rd respondent for acceptance on application of mind to all the facts and circumstances of the case cannot be held to be unreasonable or arbitrary. At any rate, this Court has already accepted the highest offer made by the 3rd respondent and it is not the case of the Official Liquidator that there is any default on the part of the 3rd respondent in complying with the terms and conditions of sale. Hence the allegations made by the applicants are unfounded and the interference by this Court at this stage is not warranted merely on the ground that the applicants have now come forward with an offer to purchase the entire extent of land for Rs.3 crores as against Rs.2.88 crores offered by the 3rd respondent. For the aforesaid reasons, the application is without any substance and the same is accordingly dismissed. No costs. ____________ G. ROHINI, J. Dt. 27.12.2010 gbs