1 jpc/- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION NO. 394 OF 2010 IN COMPANY PETITION NO. 394 OF 2003 M/s Gargi Huttenes Albertus Pvt. Ltd. .. Applicant Versus M/s Chetan Foundries Ltd. .. Respondent Now known as M/s MVR Foundries Ltd. And: IDBI Ltd. .. Applicant Vs. Official Liquidator, Bombay High Court .. Respondent Ms. Jaymala Raut i/by Juris Consultus for the Petitioner Mr. Nitin Mulye i/by G.S. Godbole for the Respondent Mr. R.D. Ajgaonkar, Vice President (Finance) of M/s Usha Cables Pvt. Ltd. Mr. Dattatraya Sawangikar, Dy. General Manager of IDBI Bank Mr. Nilesh Baradekar, Representative of M/s Rivolta Auto Industries Ltd., Pune Mr.M. R. Darasth Patel, representative of M/s B. R. Metal & Alloys (Gujarat), present. CORAM : S. J. KATHAWALLA, J. DATE : 9th September, 2010 P.C.: 1. By this Company Application, the Applicant inter alia prays that the sale of the properties of the Company in Liquidation (described in the valuation report dated 26/7/2010) be allowed by way of Private Treaty at a reduced 2 reserve price of Rs.654 lacs being realisable value of the assets based on the valuation report dated 26/7/2010 and (Earnest Money Deposit) EMD to be fixed at 10% of the reserve price. 2. By an order of this Court dated 18 th November, 2009 passed in Company Petition No.394 of 2003 with Company Petition No.395 of 2003 and with Company Petition No. 158 of 2005, M/s Chetan Foundries (now known as MVR Foundries Ltd.) was ordered to be wound up and the Official Liquidator attached to this Court was appointed as Liquidator of the assets and properties of the Company in Liquidation. 3. The Applicant IDBI Ltd. is a secured creditor of MVR Foundries Ltd. (in Liquidation)(hereinafter referred to as ‘the Company in Liquidation’) and has a first charge on pari passu basis over the assets and properties belonging to the Company in Liquidation alongwith other secured creditor namely Dena Bank. 4. The Official Liquidator,after taking possession of the properties of the Company in Liquidation, had the properties valued and put for sale by public auction on 1st October, 2009 by fixing a reserve price of Rs. 1175 lacs and EMD of Rs.293.75 lacs. The said public auction failed for want of bids. Thereafter, a notice dated 2.12.2009 was issued by the Official Liquidator and the properties of the Company in Liquidation were put for sale by way of Private Treaty on 24th December, 2009, wherein the reserve price was fixed at Rs.800 lacs and EMD of Rs.200 lacs. The said sale by Private Treaty failed due to non receipt of bids. The Official Liquidator once again issued public notice dated 3 9.2.2010 for sale of the said properties by way of public auction on 11.3.2010 at a reserve price of Rs.900 lacs and EMD of Rs.300 lacs. The public auction once again failed due to non availability of bids. The Official Liquidator thereafter tried to sell the said properties by way of Private Treaty on 1.4.2010 and notice for the same was issued on 22.3.2010 fixing reserve price of Rs.900 lacs and EMD of Rs.300 lacs. The Official Liquidator again failed to get any bids for the same. 5. As the sale by way of Private Treaty dated 1.4.2010 failed, the Official Liquidator once again attempted to sell the said property by way of Private Treaty on 15.4.2010 and notice for the same was issued on 7.4.2010 fixing the reserve price of Rs.900 lacs and EMD of Rs.300 lacs. The Official Liquidator again failed to get any bids for the same. The Official Liquidator once again issued/published notice on 13.5.2010 for sale of the said properties of the Company in Liquidation by way of public auction on 17/6/2010 at a reserve price of Rs.900 lacs and of EMD of Rs.300 lacs. As the bid was much below the reserve price, the said auction failed. 6. Since IDBI Ltd. ( the Applicant), Dena Bank and the Official Liquidator, by now had made about seven attempts to sell the properties of the Company in Liquidation by way of public auction and by way of Private Treaty and had failed to get any bids as the reserve price was high, the Applicant, as per the suggestion of the Official Liquidator, carried out a fresh valuation of the property from a Government approved valuer. The value of the properties of the Company in Liquidation, as per the valuation report dated 26.7.2010 was Rs.754 4 lacs. 7. The Applicant has submitted before this Court that the Official Liquidator has made several attempts to sell the properties of the Company in Liquidation by way of public auction as well as Private Treaty but is unable to get any bids for the reserve price and EMD amount fixed by the Court. Since the Company is lying closed since the last 9 years i.e. since the year 2001, the condition of the plant and machinery of the Company has deteriorated. It is submitted that the reserve price of Rs.900 lacs and EMD of Rs.300 lacs fixed by the Court being on the higher side, is frustrating the attempts of the Applicant to recover its legal and legitimate dues as well as that of the other secured creditors. It is further submitted that in the interest of justice, equity and good conscience , this court be pleased to reduce the reserve price from Rs.900 lacs to Rs.654 lacs and EMD be fixed at 10% of the reserve price. 8. The Official Liquidator has also submitted before this Court that the reserve price of Rs.900 lacs is on the higher side and the same is required to be reduced to enable him to sell the secured assets of the Company in Liquidation. This Court therefore fixed the bidding qua the properties of the Company in Liquidation in open Court and the bidders were informed to give their highest offers and pay orders of Rs.100 lacs towards EMD. On 9 th September, 2010, the bids of several bidders were opened in Court. Though the bid of M/s Rivolta Auto Industries Pvt. Ltd. of Rs.775 lacs was the highest, M/s Rivolta Auto Industries Pvt. Ltd. was not ready with the pay order of Rs.100 lacs but tried to tender a pay order of Rs.20 lacs. However, with a view to get the best offer from the bidders who were present in Court, the Court has 5 allowed all of them to bid including M/s Rivolta Auto Industries Pvt. Ltd. The bidders were informed by the Court that their bidding should be higher than Rs. 775 lacs i.e. the offer price of M/s Rivolta Industries Pvt. Ltd. The bidders who thereafter participated in the bidding are M/s Usha Cables Private Ltd., M/s Rivolta Auto Industries Pvt. Ltd. and M/s B. R. Metals & Alloys (Gujarat). The highest offer of Rs.860 lacs was from M/s Usha Cables Pvt. Ltd. In view thereof, the following order is passed: i. The Reserve bid and EMD earlier fixed at Rs.900 lacs and Rs.300 lacs respectively is reduced to Rs.860 lacs and Rs.100 lacs respectively. ii. The offer of M/s Usha Cables Pvt. Ltd. of Rs.860 lacs is accepted and the EMD amount of Rs.100 lacs deposited by M/s Usha Cables Pvt. Ltd. is also accepted. iii. M/s Usha Cables Pvt. Ltd. is directed to pay the balance amount of Rs. 760 lacs to the Official Liquidator by way of a pay order on or before 8 th November, 2010. iv. The Official Liquidator shall transfer the auctioned properties to M/s Usha Cables Pvt. Ltd. and/or to their nominees upon receipt of the balance amount of Rs.760 lacs. v. In the event of failure on the part of M/s Usha Cables Pvt. Ltd. to deposit the balance amount of Rs.760 lacs on or before 8th November, 6 2010, the amount of Rs.100 lacs deposited by M/s Usha Cables Pvt. Ltd. with the Official Liquidator shall stand forfeited. vi. The Official Liquidator shall return the EMDs of all unsuccessful bidders. vii. The statement made by the Official Liquidator that the auction purchaser shall not be held responsible for any past dues i.e. taxes in respect of the said land, electricity bill or any other statutory or other dues is accepted. viii.The Company Application is accordingly disposed of. ( S. J. KATHAWALLA, J.)