COMPANY APPEAL (DB) No.9 OF 2005 (Against the order dated 29.9.2005 passed by Single Judge of this Court in Company Petition No. 6 of 1992) Bihar State Financial Corporation, having its office at Fraser Road, Patna through its Managing Director. ------ (Appellant – Respondent- Secured Creditors) Versus (1) M/s. Arnil Ceratronics Limited ( in liquidation), having its work at Lakhni Bigha, Khagaul, District Patna, through the Official Liquidator. High Court, Patna having its office at Maurya Lok Complex, Block-A, 4th Floor, Dak Bunglow Road, Patna-800 001. (2) The Official Liquidator.High Court, Patna having its office at Maurya Lok Complex, Block-A, 4th Floor, Dak Bunglow Road, Patna-800 001. -----------(Petitioner-Respondent Ist set) (3) M/s. Shankar Swablambi Co-operative Cold Storage Samiti Ltd., Lakhnibigha, Khagaul, Patna. ……………….(Auction Purchaser-Respondent 2nd set) (4) Bihar State Credit and Investment Corporation, Indra Bhawan, 4th Floor, Boring Canal Road, Patna. (5) Bank of India, Zonal Office, Patna. ………………..(Secured Creditor-Respondent 3rd set) COMPANY APPEAL (DB) No. 1 0F 2006 The Bihar State Credit and Investment Corporation Ltd., Patna, 4th Floor, Indira Bhawan, Ram Charitar Singh Path, Patna through its Managing Director ---------------( Respondent/Appellant) Versus (1) Arnil Creatronics Ltd. ( in liquidation) through the official Liquidator, Patna High Court, at 4th Floor Block-A, Maurya Lok Complex, Dak Bunglow Road, Patna, (2) The Bihar State Financial Corporation Ltd., Frazer Road, Patna-800 001, (3) Bank of India. (4) M/s. Sri Swablambi Co-operative Cold Storage Samiti Ltd., Lakhnibigha, Khagaul, Patna,. -----------(Respondents) --------- For the Appellant in Company Appeal No. 1 of 2006: MR. AMIT SRIVASTAVA, ADVOCATE For the Appellant in Company Appeal No. 9 of 2006: MR. JYOTI SHARAN, ADVOCATE For the Bank & Respondent: MR. BINAY KUMAR SINGH, ADVOCATE For the Auction Purchaser: M/S RAJIV NAYAN SINGH, ADVOCATE DWIJENDRA MISRA, ADVOCATE 2 P R E S E N T THE HON'BLE MR. JUSTICE CHANDRAMAULI KUMAR PRASAD THE HON'BLE MR. JUSTICE SUBASH CHANDRA JHA ***** Prasad & Jha, J.J. Secured creditors namely Bihar State Financial Corporation and the Bihar State Credit and Investment Corporation Ltd., aggrieved by the order dated 29.09.2005 passed by the Company Judge in Company Petition No. 06 of 1992, have preferred these appeals separately. As both the appeals arise out of the common order, they have been heard together and are being disposed of by this common judgment. Short facts giving rise to the present appeals are that by order dated 31.03.1995 M/s. Arnil Ceratronics Ltd., was directed to be wound up. By order dated 22.05.1998 the Company Judge advertised for sale the assets of the company and in the light thereof two offers were received, which were not accepted. Company Judge by order dated 25.08.2000 directed for advertisement for sale of the property afresh in National Dailies and in the light thereof sale notices were published in the newspaper on 02.09.2000. In response to the said advertisement again two offers were received but none was accepted. Faced with the 3 aforesaid situation the Company Judge thought it proper, first to fix the reserve price of the assets and then to advertise the assets of the company for sale. In the light of the aforesaid, by order dated 23.05.2003 reserve price of the assets of the company was fixed at Rs. 38 lacs and Company Judge directed for issuance of fresh sale notice. In response to this sale notice two offers were received, but those were also not accepted. The Company Judge by order dated 02.04.2004 directed that the dues of all the three secured creditors; two appellants herein and the Bank of India should freeze as on 02.04.2004 and that shall not carry further interest. After freezing the dues of the secured creditors they were directed to take steps for sale of the assets at their own level as also to publish separate sale notices in the newspaper. In compliance of the said direction the Bihar State Financial Corporation published sale notice on 11.04.2004 and the Bank of India on 27.04.2004. This also yielded no result. The Bihar State Financial Corporation by order dated 10.08.2004 was granted another opportunity to publish fresh sale notice. However, the Bihar State Financial Corporation Ltd., assailed the aforesaid order in Company Appeal No. 15 of 2004 which 4 was disposed of by order dated 02.09.2004 and ultimately, the Bihar State Financial Corporation Ltd. Published sale notice dated 25.12.2004. In response thereto three offers came which included the highest offer of M/s. Sri Swablambi Co-operative Cold Storage Samiti Ltd., Respondent No. 3. Its offer of Rs. 49,51,000/- ( Fourty Nine lacs and Fifty one thousand) has been accepted by the Company Judge. The Company Judge directed it to deposit the amount within stipulated time and official liquidator directed to hand over it the possession of the assets in question. Aggrieved by the same the secured creditors aforesaid have preferred these appeals. Mr. Jyoti Sharan, appears on behalf of the appellant in Company Appeal No. 09 of 2005, whereas the appellant of Company Appeal No. 01 of 2006 is represented by Mr. Amit Srivastava. Bank of India, respondent no. 2, is represented by Mr. Binay Kumar Singh. Mr. Rajiv Nayan Singh appears on behalf of the purchaser. Learned counsel for the appellants contends that in the facts of the present case the Company Judge ought not have accepted the offer of the purchaser. He submits that the value of the assets is more than for what it has been sold to the 5 purchaser. We do not find any substance in the submission of the learned counsel for the appellants. The Company Judge had fixed the reserved price at Rs. 38 lacs. After several advertisements and notice, the offer of Rs. 49, 51,000/- has been accepted. Reserved price was fixed at Rs. 38 lacs, hence, the purchaser’s offer cannot be said to be unduly low calling for interference in the present appeal. Reference in this connection can be made to a decision of this Court in the case of The Bihar State Credit and Investment Corporation Ltd. & Naresh Kumar Poddar Vs. Shree Vishwanath Chemicals Pvt. Ltd. & ors. reported in 2008 (4) PLJR 228, in which it has been held as follows: “I do not find any substance in this submission of the learned Counsel. Mere inadequacy of price cannot be a ground for setting aside the sale. Advertisement for sale was widely circulated. In fact in response to the first advertisement, offer made by the intending purchasers were not accepted, being objected by the secured creditor and the Ex- Management and they were directed to procure better offer. Thereafter the assets of the company were advertised for sale again and the secured creditor did not bring any higher offer. Not only this, in response to the second advertisement only one offer came and that too for a lesser amount, than what was offered in response to the first advertisement. It is worth mentioning here that the purchaser had purchased the property as mentioned in 6 Schedule-I of the notice and its reserve price has been fixed as Rs. 21.14 lacs. The secured creditor i.e. BICICO was asked to take instruction as to whether it is prepared to purchase the property at the reserve price. The secured creditor, through its Counsel had not responded to it positively. In the background of the aforesaid facts, I am of the opinion that the Company Judge did not err in accepting and confirming the offer of the purchaser for a lesser amount.” To put the record straight, it is relevant here to state that in the present proceeding we had offered the appellants to bring better offer, but they have showed their unwillingness. In the result, we do not find any merit in both the appeals and they are dismissed accordingly but without any order as to cost. (Chandramauli Kr. Prasad, J.) (Subash Chandra Jha, J.) Patna High Court, the 17th of Oct., 2008 NAFR/AFR Sanjeet