Of India Ltd. Vs. Official Liquidator  INSC 348 (10 September 1993)
Jagdish Saran (J) Verma, Jagdish Saran (J) Bharucha S.P. (J) Venkatachala N.
1994 AIR 167 1994 SCC Supl. (2) 721
Heard on merits.
company known as Dytron (India) Ltd. was directed to be wound up
by an order dated 29-5-1991 made by the learned Company Judge
of the Calcutta High Court, with a further direction to the official liquidator
to take possession of all the assets and properties of the company.
total liabilities of the company are stated to be about Rs 37 crores. On 2-6-1992 the learned Company Judge made an order for sale of
the company's properties and also specified the terms and conditions of the
sale. These terms and conditions of sale required deposit of 10 per cent of the
bid offered by the bidder along with the offer to purchase, and the deposit of
the entire sale price was to be made within a period of 30 days of the date of
acceptance of the offer by the Court. It + Arising out of SLP (C) No. 9232 of
1993 + Arising out of SLP (C) No. 9298 of 1993 + 722 appears that on 18-9-1992
the learned Company Judge did not accept the offer of Rs 4.50 crores for the
properties in view of the objections of ICICI. Thereafter a concern known as Laxmi
Petrochem in the name of Suresh Kumar Singhania (respondent 2) made an offer to
purchase the said properties for Rs 2.26 crores and later raised the bid to the
sum of Rs 2.51 crores, to be paid over a period of more than 9 years.
learned Company Judge accepted that offer but directed payment of the amount in
30 days. On a prayer made subsequently by Laxmi Petrochem, the learned Company
Judge extended the period for deposit of the entire amount to five years. The
present appellant preferred an appeal to the Division Bench of the High Court
against the order of the learned Company Judge accepting the offer of Rs 2.51 crores
made by Laxmi Petrochem. The Division Bench dismissed the appeal. Hence this
further appeal by special leave.
the hearing before us, M/s Hooghly Mills Ltd. (Appellant in the connected
appeal) made the offer of Rs 4.50 crores for purchase of the said property, to
be paid in instalments in five years, and they have also deposited an amount of
Rs 45 lacs in this behalf with the official liquidator at Calcutta. The
question is whether the sale in favour of Laxmi Petrochem should be upheld or
any other direction considered appropriate in the circumstances of this case be
are satisfied that the sale in favour of Laxmi Petrochem for a sum of Rs 2.51 crores
to be deposited in five years as a result of the orders made by the High Court
must be set aside since the amount is obviously too inadequate in the admitted
facts and circumstances. We direct accordingly.
to the course to be adopted hereafter for sale of the properties, we direct as
stated hereafter. It does appear to us that the requirement of deposit of the
entire sale price within a period of 30 days of acceptance of the bid,
according to the direction of the High Court, is not appropriate in view of the
large amount involved. This is the common difficulty expressed by all the
parties represented before us. It also appears to us that the deposit of a mere
10 per cent of the bid amount along with the bid is inadequate and the
requirement of deposit of a larger amount with the bid would be appropriate to
confine the sale to genuine bidders. In our opinion deposit of 20 per cent
instead of 10 per cent of the bid amount along with the bid by each bidder
would be more appropriate, and a period larger than 30 days for deposit of the
entire sale price would be reasonable in the present case. It is, therefore,
appropriate that the High Court modified the terms and conditions of sale fixed
by it, to this extent, by making a suitable order for this purpose. The learned
Company Judge, who has earlier fixed the terms and conditions of sale, will,
therefore, make a suitable order to this effect and duly notify the same making
it clear that the notified terms and conditions, without any further
notification thereof, would apply equally to every bidder.
learned Company Judge will also take the necessary steps to duly advertise the
modified terms and conditions and proceed to invite fresh bids for sale of the
properties on this basis. As a consequence of the directions made by us, the
deposits made by Laxmi Petrochem and Hooghly Mills with the official liquidator
at Calcutta shall be refunded to them, with accretions thereto, if any. We may
also observe that Laxmi Petrochem as well 723 as Hooghly Mills would be
entitled to participate in the sale to be held hereafter on the same terms and
conditions as applicable to all others.
Consequently, these appeals are allowed in the manner indicated and the
impugned order dated 26-3-1993 made by the learned Company Judge and order
dated 27-5-1993 made by the Division Bench of the High Court together with all
other consequential orders are set aside. Any other matter not covered hereby,
including those relating to the workmen, if thereby any right in them, shall be
considered and decided on merits by the learned Company Judge. This order is
not to be construed as recognizing any right in the workmen, if otherwise they
do not have the right they may be claiming.