IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL COMPANY APPEAL NO. 1 OF 2008 Pradeshiya Industrial Investment Corporation of U.P. Ltd. “PICUP Bhawan”, Gomti Nagar, Lucknow …....Appellant. Versus Official Liquidator, Uttar Pradesh & Uttarakhand & others ……Respondents. Present:- Sri Naresh Pant, Advocate with Ms. Menka Tripathi, Advocate for the appellant. Sri Anil Kumar Joshi, Advocate for respondent no. 1. Sri U.K. Uniyal, Senior Advocate assisted by Sri Sandeep Kothari, Advocate for respondent no. 2. Sri Jitendra Chaudhary Advocate for the prospective bidder Navneet Jain. Sri Rahul Consul, Advocate for M/s S.O.S. Pharma Pvt. Ltd. COMPANY APPEAL NO. 2 OF 2008 M/s Vishwa Ingots Pvt. Ltd. …....Appellant. Versus Official Liquidator, Uttar Pradesh & Uttarakhand & others ……Respondents. Present:- Sri Pankaj Purohit, Advocate for the appellant. Sri Anil Kumar Joshi, Advocate for respondent no. 1. Sri Naresh Pant, Advocate with Ms. Menka Tripathi, Advocate for respondent no. 2. Coram: Hon’ble Prafulla C. Pant, J. Hon’ble Sudhanshu Dhulia, J. Sudhanshu Dhulia, J. Since both these company appeals have been filed challenging a common order dated 3.10.2008 passed by a learned Single Judge of this Court in Company Petition No. 1-A of 2001, they are being decided together. 2 Company Appeal No. 1 of 2008 has been filed by the “Pradeshiya Industrial Investment Corporation of U.P. Ltd.” under Section 483 of the Companies Act, 1956 against order dated 3.10.2008 passed by the learned Company Judge of this High Court. Respondent no. 1 before this Court is the Official Liquidator and respondent no. 2 M/s Shubham Enterprises is the auction purchaser. Brief facts of the case are that on a reference being made by M/s Vishwa Ingot Pvt. Ltd. under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, the BIFR after making enquiries under Section 16 (1) of the Act recommended that the company i.e. M/s Vishwa Ingot Pvt. Ltd. should be wound up. This Court vide an order dated 3.9.2001 has directed the official liquidator i.e. present respondent no. 1 to take necessary steps in accordance with law. The official liquidator, through its counsel, subsequently moved an application before learned Single Judge of this Court for permission to sell the assets and properties of the company by way of public auction. This was permitted by this Court by order dated 29.6.2004 and thereafter after according wide publicity for the auction sale, the auction sale took place on 5.4.2005. In the auction sale, apart from the participants the secured creditor of the company i.e. the present creditor were also present. Admittedly, the highest bid was ` 52,50,000/- of respondent no. 2 i.e. M/s Shubham Enterprises. Being the highest bidder, respondent no. 2 deposited an earnest money of ` 5,30,000/- and the remaining bid amount i.e. ` 47,20,000/- was to be deposited within a stipulated time. This auction sale was confirmed by an order of this Court dated 20.9.2005. It is again an admitted fact that none of the prospective bidders have made any application before this Court for recall of order 3 dated 20.9.2005. However, before the learned Company Judge several applications were made by the prospective bidders that presently they have a higher price to offer, but still none moved an application praying that order dated 20.9.2005 confirming the sale be set aside. The auction purchaser i.e. respondent no. 2, however, moved an application before the learned Single Judge that the time given to him for depositing the remaining amount be extended. This was strongly objected by the secured creditors on the plea that during this period the price of the property has soared high and there are people who are ready and willing to offer a much higher price ranging upto ` 1,00,00,000/- for the property and respondent no. 2 should not be given any time to deposit the remaining amount. The learned Single Judge, however, in order to meet the ends of justice and considering the fact that respondent no. 2 was the highest bidder extended time for the deposit of the remaining amount with a condition that he will have to pay interest of 24% simple interest on ` 47,20,000/- which roughly comes to ` 86,48,400/- on 3.10.2008. Vide its order dated 3.10.2008, learned Single Judge directed that this amount of ` 47,20,000/- along with simple interest of 24 % per annum be deposited within 30 days’ time. It is this order of the learned Single Judge which has been challenged before this Court. The main ground for challenge by the secured creditor is that since the auction purchaser has violated the necessary condition inasmuch as he has not deposited the sale consideration within the stipulated period, the auction sale itself is liable to be cancelled as non est and no indulgence is liable to be given to him any further. Moreover, it was also pleaded that the secured creditor is liable to get the best price in an auction purchase and the best price is not what has been 4 offered by respondent no. 2 but there are people who are offering ` 1,00,00,000/- as of now. This contention of the appellant, however, has been much diluted inasmuch as M/s S.O.S. Pharmaceuticals (P) Ltd. who is presently impleaded as one of the respondents and who is offering higher price has withdrawn from the bid and, therefore, to this extent, the argument of the appellant gets considerably weakened. This Court also feels that although the learned Company Judge in its discretion under Rules 7 and 9 to the Companies (Court) Rules, thought it proper that time be given, however, this opportunity has only been granted with the stipulated condition that the amount has to be given with an interest of 24 % which we think is very reasonable and takes care of the secured creditor to a large extent inasmuch the amount ultimately which the secured creditors would get including the interest would be very close to the one they expect to fetch from prospective bidders, etc. Rule 7 of the Companies (Court) Rules, 1959 reads as under:- “R. 7. Power of Court to enlarge or abridge time.—The Court may, in any case in which it shall deem fit, extend or abridge the time appointed by these rules or fixed by an order of the Court for doing any act or taking any proceeding, upon such terms (if any) as the justice of the case may require and any such enlargement may be ordered although the application for the same is not made until after the expiration of the time appointed or allowed.” Rule 9 of the Companies (Court) Rules, 1959 reads as under:- “R. 9. Inherent powers of Court.—Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.” 5 Therefore, we see that whereas Rule 7 specifically gives power to the Court to extend the time, Rule 9 is an inherent power before the Company Judge to pass order in order to meet the ends of justice. We find that the extension of time granted by the learned Company Judge was ultimately in the interest of justice and there was no anomaly in the same. As such, we find no merit in Company Appeal No. 1 of 2008 and the same is liable to be dismissed. For the reasons already stated above, we see no relevance or justification for even entertaining any applications moved before this Court by subsequent bidders. Firstly for the reasons that the interest of secured creditor has been well taken care of by the order of the learned Single Judge, inasmuch as the amount has to be now given with an interest of 24 % and secondly, since there was no challenge to the order of this Court dated 20.9.2005 by any of the bidders. It is further directed that the earnest money which has been deposited by M/s S.O.S. Pharmaceuticals (P) Ltd. will be returned to him forthwith and definitely within a period of one month from today. As far as second Company Appeal No. 2 of 2008 is concerned, this appeal has been filed by the company which is under liquidation. Since the company is represented by the official liquidator, there is no provision under the law by which the company can file this appeal and in fact appeal itself is not maintainable inasmuch as the interest of the company is presently being looked into by the official liquidator, which is present before this Court. Company Appeal No. 2 of 2008, therefore, has no merit and is liable to be dismissed. 6 For the foregoing reasons, both the Company Appeals are dismissed. No order as to costs. (Sudhanshu Dhulia, J.) (Prafulla C. Pant, J.) 26.11.2010 26.11.2010 Avneet