THE HON’BLE SRI JUSTICE C.V. NAGARJUNA REDDY COMPANY APPLICATION No.903 of 2014 IN/AND COMPANY APPLICATION No.1038 of 2013 IN COMPANY APPLICATION No.618 of 2009 IN COMPANY PETITION No.58 of 1995 Dated: 30.07.2014 Between: M/s. Kanosika Laboratories Ltd. (In Liqn), reptd., by the Official Liquidator, .. Applicant And The Federal Bank Ltd. Rep. by the Chief Manager, Orient Estate, Abids Road, Hyderabad-1. .. Respondent Counsel for the applicant: Sri M. Anil Kumar Counsel for the respondent: Sri Chitturu Srinivas The Court made the following: COMMON ORDER: Company Application No.1038 of 2013 is filed by the Official Liquidator for the following reliefs: “i) to direct the Respondent herein i.e., Federal Bank to value the property of the company afresh and submit the valuation report within 2 weeks; ii) to permit the Deputy Official Liquidator to sell the land admeasuring Ac.4.32 guntas situated at Sy.No.55 (Old Sy. No.12/2/AA), Majidpura Village, Medchal Taluk, Ranga Reddy District, as one lot by inviting sealed tenders; iii) to fix the minimum upset price of the assets of the company; iv) to permit the Deputy Official Liquidator to publish the notice inviting sealed tenders in the Hyderabad edition of "Sakshi”, “Andhra Jyothi" and "Deccan Chronicle" newspapers; v) to permit the Deputy Official Liquidator to give publicity of the sale through the electronic media - TV9, by way of scrolling news; vi) to consider and approve the notice inviting sealed lenders; vii) to consider and approve the terms and conditions for the sale of the properties of the company and the format of the application; viii) to consider and approve the fixing of 20% of the minimum upset price to be fixed as EMD; ix) to consider and approve the fixing of Rs.1,000/- as cost of terms and conditions; x) to permit the Deputy Official Liquidator to open the sealed tenders in the chambers of the Official Liquidator in the presence of the secured creditor and the available participants; xi) to permit the Deputy Official Liquidator to negotiate with the auction participants in the presence of the secured creditor on the day of opening of tenders to fetch better price; xii) to direct the respondent herein to deposit Rs.5.00 lakhs with the Official Liquidator to incur the advertisement charges and other incidental expenses; and xiii) to order that the cost of this application do come out of the assets of the company.” Company Application No.903 of 2014 is filed for permitting the Official Liquidator to withdraw prayer Nos.ii, iv, v, vi, vii, viii, ix, x and xii in Company Application No.1038 of 2013. In his affidavit filed in Company Application No.903 of 2014, the Deputy Official Liquidator has inter alia stated that in pursuance of the winding up order, dated 25.07.1997, passed by this Court in Company Petition No.58 of 1995, the Official Liquidator has taken possession of the assets of the company (in liquidation) i.e., the land situated in Survey No.55 (Old Sy.No.12/2/AA) at Majidpura Village, Medchal Taluk, Ranga Reddy District; that the Official Liquidator has filed Company Application No.171 of 1998 seeking to appoint a Valuer to assess the value of the properties of the company (in liquidation); and that this Court, by order, dated 05.08.1998, appointed Sri M.V.G.Sastry as a Valuer to assess the value the properties of the company (in liquidation), by fixing his remuneration as Rs.2,000/-. It is further stated that the Official Liquidator filed Company Application No.618 of 2009 for permission to sell the land admeasuring Acres 4-32 guntas situated in the above-mentioned Survey number by inviting sealed tenders; that the said application was ordered by this Court on 22.02.2010, directing the Federal Bank-the sole secured creditor, to take out paper publication regarding the sale of the subject land and that if any buyer comes forward to purchase, the same shall be intimated to the Official Liquidator; that accordingly, the Federal Bank has published the sale notice on 18.06.2010 in Hyderabad editions of Sakshi (Telugu) and Deccan Chronicle (English) daily newspapers; that pursuant to the advertisement issued, no one purchased the tenders; and that, therefore, no auction could be conducted by the Official Liquidator; that the Official Liquidator filed his report, dated 09.07.2010; and that thereupon this Court, by order, dated 12.07.2010, directed the Official Liquidator and the respondent-the Federal Bank to continue their efforts to secure bidders. The Deputy Official Liquidator further averred that in pursuance of the said direction of this Court, the respondent-the Federal Bank has submitted three quotations received from three prospective bidders before the Official Liquidator and the offers/quotations received from them as against the minimum upset price of Rs.2,91,60,000/- are as under: Sl.No. Name of the Bidder Offer Amount 1 Sri S. Shiva Shankar Reddy and Sri S.Anand Reddy Rs. 1,22,22,222/- 2 Sri K. Mahender Reddy Rs. 1,54,00,000/- 3 Sri D. Malla Reddy Rs. 1,62,00,000/- It is further averred that as the offers received were much below the minimum upset price, the Official Liquidator has called the above bidders for negotiations on 04.03.2011 in order to fetch a better offer; that none of the bidders were willing to enhance their offers during the negotiations on the ground that the subject land has no proper approach road; that accordingly, a report, dated 18.03.2011, was filed by the Official Liquidator before this Court; that this Court by order, dated 19.04.2011, recorded the submissions of the Official Liquidator and permitted him to withdraw the application reserving liberty with him to renew the request as and when the respondent-the Federal Bank secures prospective purchasers; that thereafter, the Official Liquidator filed Company Application No.331 of 2012 in Company Application No.986 of 2011 for a direction to respondent Nos.3 and 4 therein to provide an approach road to the subject land; that while the said Company Application was pending, two bidders namely; Sri K.Mahender Reddy and Sri K.Sudharshan Reddy have filed Company Application No.694 of 2013 seeking confirmation of sale of Acres 4.32 guntas of land in Survey No.55 (Old Survey No.12/2/AA) and the Industrial shed constructed thereon for Rs.2,93,00,000/- in pursuance of their offer letter, dated 12.06.2013, addressed to the company (in liquidation); that on hearing this Company Application, this Court vide order, dated 23.07.2013, directed the Official Liquidator to dispose of the application, dated 12.06.2013, filed by the said two persons; that accordingly, the office of the Official Liquidator, after considering the offer letter, informed the said two persons that he has no power to confirm the bid. It is further averred that the Valuation report, dated 28.03.2009, prepared by M/s Subha Syndicate indicates that the assets of the company (in liquidation) comprise land admeasuring Acres 4.32 guntas in Survey No.55 (Old Survey No.12/2/AA) situated at Majidpura Village, Medchal Taluq, Ranga Reddy District and that while its realizable value is Rs.2,91,00,006/-, the fair market value is Rs.3,24,00,000/-. In the light of the above-mentioned facts, the Official Liquidator has filed Company Application No.1038 of 2013 for directing the respondent-the Federal Bank (the sole secured creditor) to get the assets of the company (in liquidation) valued afresh due to efflux of time from the last valuation and the Official Liquidator has also sought permission to proceed with the sale based on the valuation report to be submitted by the Federal Bank; that accordingly, the Federal Bank has submitted the valuation report, vide Ref.No.JCS/FB/MV/VAL/13, dated 05.11.2013, prepared by M/s Kishore Associates; that this Court, while taking said the Valuation report on record, by order, dated 23.12.2013, directed the Official Liquidator to verify the same and file his report; that in compliance with the said direction, the Official Liquidator has verified the valuation report submitted by M/s Kishore Associates and submitted his report, dated 26.12.2013, in Company Application No.1038 of 2013; that this Court on hearing the submissions of the Sri M.Anil Kumar, learned counsel for the Official Liquidator, and the learned counsel for the respondent-the Federal Bank (the sole secured creditor), has passed order, dated 08.07.2014, in Company Application No.1038 of 2013 as under: “Considering the fact that the earlier attempts to sell the property through public auction went in vain, this Court feels it appropriate that further negotiation with Sri K.Mahender Reddy and Sri K.Sudharshan Reddy are held by the office of the Official Liquidator in the presence of the representative of the secured creditor.” The Deputy Official Liquidator further stated that in pursuance of the above direction, he has issued letter, dated 11.07.2014, to the said two offerers, viz., Sri K.Mahender Reddy and Sri K.Sudharshan Reddy, requesting them to participate in the negotiations on 17.07.2014, while addressing the respondent-the Federal Bank (the sole secured creditor) to attend the said negotiations; that accordingly, the said two offerers attended the negotiations and revised their offer to Rs.2,94,00,000/- from Rs.2,93,00,000/- and finally, on the intervention of the Manager of the Federal Bank, they have revised the offer to Rs.2,96,00,000/- which is slightly higher than the distress sale value mentioned in the Valuation report dated 05.11.2013; that in furtherance of their offer, the said two offerers have given two Demand Drafts, dated 17.07.2014, worth Rs.25 lakhs and these facts were placed before this Court, vide Official Liquidator’s report, dated 21.07.2014, in Company Application No.1038 of 2013. The Deputy Official Liquidator further submitted that in spite of multiple efforts made by him in coordination with the respondent-the Federal Bank, the above-mentioned property of the company (in liquidation) could not be sold due to absence of proper approach road to it and non co-operation of the surrounding land owners and he opined that, under the facts and circumstances of the case, there is no likelihood of receiving a better offer than the one offered by the above said two persons. He has, therefore, sought for permission of this Court to withdraw prayer Nos.ii, iv, v, vi, vii, viii, ix, x and xii in Company Application No.1038 of 2013 and to issue a direction to the Official Liquidator to accept the offer of Rs.2,96,00,000/- made by Sri K.Mahender Reddy and Sri K.Sudharshan Reddy by fixing the time limit for payment of the balance sale consideration by them. Sri Chitturu Srinivas, the learned counsel for the respondent, fully supported these two Company Applications filed by the Official Liquidator. The facts recorded above would show that in spite of the best efforts made by the Deputy Official Liquidator and the respondent, which is the sole secured creditor, they are unable to secure higher offers than the one made by Sri K.Mahender Reddy and Sri K.Sudharshan Reddy. The revised offer made by the said two persons is marginally higher than the sum of Rs.2,95,80,000/-, assessed as distress sale value by the Valuer in his latest Valuation report, dated 05.11.2013. Under the above-mentioned facts and circumstances of the case, this Court feels that it would be in the better interests of the company (in liquidation) that the revised offer of Rs.2,96,00,000/- made by Sri K.Mahender Reddy and Sri K.Sudharshan Reddy is accepted. Both the offerers, viz., Sri K.Mahender Reddy and Sri K.Sudharshan Reddy are personally present in the Court. While expressing their willingness to pay the balance sale consideration, they requested for six weeks’ time for deposit of the same. Considering the fact that the balance sale consideration is substantial, the said purchasers are allowed six weeks’ time from today for payment of the balance amount. In the result, the Company Application Nos.1038 of 2013 and 903 of 2014 are allowed as indicated above. ______________________ C.V.NAGARJUNA REDDY, J 30th July, 2014 DR