Vedica Procon Private Limited vs Balleshwar Greens Private Limited And ...

2. M/s Omex Investors Ltd. was ordered to be wound up by the Company Judge of the Gujarat High Court by an order dated 6.3.1990. The Official Liquidator attached to the Gujarat High Court was appointed as the Liquidator of the said company.

3. By order dated 26.3.2013, the official liquidator was directed to put the freehold land of the company admeasuring 13895 sq. mtr. to auction for sale by inviting offers from the intending purchasers in sealed covers. By the said order, the High Court also fixed an upset price at Rs.55 crores and earnest money deposit (EMD) at 10% thereof.

4. Tender Notice (containing the terms and conditions of sale) inviting offers from the prospective purchasers in sealed covers was widely published. 11 prospective purchasers responded to the notice. On 17.12.2013, an auction was held in the open court. After inter-se bidding of 12 rounds, the appellant in Civil Appeal arising out of SLP (Civil) No.2198 of 2015 [“Vedica Procon Private Limited”, hereinafter referred to as “the appellant”) became the highest bidder with an offer of Rs.148 crores[1] –whereas the first respondent (Balleshwar Greens Private Limited) in the abovementioned SLP made the second highest bid. The High Court accepted the bid of the appellant.

5. By the same order the High Court recorded that the earnest money deposit by the appellant and the first respondent be retained by the official liquidator and the earnest money deposits made by the other unsuccessful bidders be returned.

6. On 19.12.2013, the official liquidator addressed a letter to the appellant referring to the order dated 17.12.2013 of the High Court and informed the appellant as under:

7. Pursuant to the said letter, the appellant deposited on 06.01.2014 an amount of Rs.37 crores being 25% of the purchase price by Demand Draft drawn on ICICI Bank.

11. On 25.03.2014, the appellant filed an application before the High Court seeking extension of time to deposit the balance consideration of Rs.106.5 crores. The said application was allowed after hearing the secured creditors, by an order dated 31.03.2014, extending the time for payment up to 31.07.2014. However, the appellant deposited the entire balance amount of Rs.106.5 crores on 16.04.2014 without availing the benefit of the extended time by the order of the High Court (referred to supra). The said fact is acknowledged by the official liquidator in his letter dated 16.04.2014 calling upon the appellant to take over the possession of the said land on 17.04.2014 at 11.30 am in presence of the representatives of the official liquidator. The relevant portion of the letter reads as follows:

13. On 17.04.2014, a possession memo was drafted purporting to handover the property in question. It appears from the copy of the said possession memo that it was signed by two UDC officials of the Official Liquidator by name S.R. Meena, STA and C.G. S. Karki and one Ganesna Venkataramana on behalf of the appellant. The first respondent disputes the fact that the possession of the property in question was infact delivered to the appellant herein. However, the Division Bench of the High Court by the impugned order found no substance in the objection of the first respondent:

14. The first respondent’s appeal (OJ Appeal No.9/2014) was disposed of by an order[2] dated 17.04.2014 by issuing directions. The substance is:

15. In order to complete the narration of facts, it may be mentioned herein that the appellant herein moved a review application Misc. CA No.90 of 2014 O.J. Appeal No.9 of 2014 before the Division Bench of the High Court which was partly allowed making some minor modification in the order dated 17.04.2014, the details of which may not be relevant for our purpose.

16. Pursuant to the order dated 17.04.2014, the first respondent moved an application OJMCA 89 of 2014 seeking recall of the order dated 17.12.2013 on various grounds. The said application was allowed by an order dated 11.08.2014. By the said order, the learned Single Judge had set-aside the sale made in favour of the appellant herein on 17.12.2013 and ordered the return of the amount already paid by the appellant. The learned Single Judge also directed a fresh auction of the property in question. He also directed the first respondent to pay an amount of Rs.25 lakhs to the appellant herein.

22. Pursuant to the abovementioned direction of the Division Bench, the learned Company Judge, on an application filed by the first respondent, by his order dated 11.08.2014, recalled the order dated 17.12.2013 and set aside the sale made in favour of the appellant. When the said order was challenged by the appellant herein before the Division Bench of the High Court, the same was dismissed by the impugned judgment.

“28. … From the facts stated above, it is clear that in November, 2004, the bid of the appellant was highest and was accepted by the Official Liquidator. But it is also clear that certain facts which were necessary to be brought to the notice of intending purchasers were not set out in the proclamation of sale nor were disclosed at the time of sale notice. They related to valuation of movable and immovable properties, fixation of reserve price, non-inventory of plant and machinery, etc. The attention of the Company Judge was invited by other bidders by filing Company Applications. The Company Judge considered the objections and having prima facie satisfied himself, ordered fresh auction. We find no illegality in the said approach. When fresh bids were received, it was found that the highest offer was of respondent No. 3-Society which was of Rs.3.5 crores. The Company Judge extended an opportunity to the appellant to raise its bid. It, however, appears that the appellant was adamant to get the property for Rs.1.47 crores on the ground that the said offer was highest and all the proceedings taken by the Official Liquidator and Company Judge thereafter were totally illegal and unlawful. In our opinion, the respondents are right that in such cases, the approach of the Company Judge should be to get highest price so as to satisfy maximum claims against the Company in liquidation. The procedure followed by the Company Judge, therefore, cannot be said to be illegal.”

49. Certain incidental questions raised by the first respondent are required to be answered at this stage.

52. For all the abovementioned reasons, we allow the appeals of the appellant Vedica Procon Private Limited, with costs.

August 13, 2015

Approx. situated at T.P. No.18 of F.P. No.32/P, bearing Survey No.25, 27/B/1, 31, 38, Moje Rajpur Hirpur, Outside Raipur Gate, behind New Cloth Market, Opp. Hirabhai Market, Diwan Ballubhai Road, Raipur, Ahmedabad.

9. In view of the above discussion, the bid of M/s. Vedica Procon Pvt. Ltd. being the highest bidder, who has offered Rs.148 Crores for the land mentioned in the tender notice deserves to be accepted and is hereby accepted as per the tender conditions on as is where is basis and whatever there is basis.

[2] 1. The appellant before us will move before the learned Company Judge within a period of one week with an appropriate application showing his desire to apply afresh for the bid, as according to Mr. Trivedi, the order dated 17.12.2013 is not finalized and it still requires confirmation of the learned Single Judge. Be that as it may, if the application is not made within one week, the benefit of this order will not ensure for the benefit of present appellant. The parties are directed to maintain status- quo till the appellant files an application before the learned Single Judge and the learned Company Judge shall decide the question of interim relief on merits.

2. The appellant shall handover the Demand Draft of Rs.160 crores to Mr. R.C. Mishra, Deputy Official Liquidator, who is present in the Court, today itself. The Deputy Official Liquidator has accepted it and shall pass the receipt of the same to the present appellant. The Official Liquidator shall see that the amount is kept in Fixed Deposit at least for one month so that there is no loss of interest.

5. The order dated 31.03.2014 passed in Misc. Civil Application No.53 of 2014 by the learned Company Judge is interfered with to the above extent only.