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ICIC Of India Ltd. Vs. Official Liquidator [1993] INSC 348 (10 September 1993)

Verma, Jagdish Saran (J) Verma, Jagdish Saran (J) Bharucha S.P. (J) Venkatachala N. (J)

CITATION: 1994 AIR 167 1994 SCC Supl. (2) 721

ACT:

HEAD NOTE:

ORDER

1. Leave granted.

2. Heard on merits.

3.The 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.

The 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.

The 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.

4.During 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 made.

5.We 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.

6.As 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.

The 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.

7. 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.

No costs.

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