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TCS Consultancy Services P. Ltd. v/s Rajasthan Telephone Industries Ltd. (In Liquidation)

    Miscellaneous Company Application No. 46 of 2002 in S.B. Company Petition No. 24 of 1989

    Decided On, 20 September 2002

    At, High Court of Rajasthan Jaipur Bench


    For the Appellants: Suresh Goyal, Advocate. For the Respondents: ------

Judgment Text

S.K. Keshote J.

1. This application is u/s 460(6) of the Companies Act, 1956, read with Rule 9 of the Companies (Court) Rules, 1959, by the applicant. In the application it is prayed that the offer submitted by the bidder is undervalued and the same may be rejected. The offer of the applicant given now be accepted.

2. Rajasthan Telephone Industries Ltd. was ordered to be wound up by this court under the order dated August 12, 1999, in Company Petition No. 24 of 1999 and the official liquidator attached to the court was directed to proceed with the winding up proceedings as per the law.

3. The official liquidator in course of winding up proceedings invited sealed tenders for sale of assets of the company. He got notice inviting tenders published in Hindustan Times (a daily newspaper) in its edition of June 1, 2002. The reserve price fixed for the sale of the land measuring 20,000 sq. metres with structure thereon was rupees one crore twenty-five lakhs.

4. In para. No. 4 of the application, the applicant stated that in pursuance of this notice of inviting tenders some bidder not known to the applicant has offered his bid to the tune of rupees one crore and thirty-one lakhs.

5. In para. No. 5, it is stated that the official liquidator has undervalued the cost of the properties and the bid offer given by the unknown bidder is undervalued and underestimated.

6. In order to show his willingness and bona fide to purchase the assets of the company what it is alleged in para. No. 6 of the application he submitted an application in the court on August 29, 2002, which is entered at inward No. 14279 on the same date. He submitted two demand drafts of a sum of Rs. 15 lakhs (rupees fifteen lakhs) along with that application.

7. In para. No. 8, the applicant stated that bid offered of rupees one crore thirty-one lakhs has not been finalised and moreover the interest of the public money is the supreme and the offer of the. applicant which is much more than any one deserves to be accepted in the interest of justice.

8. From the averments made in para. No. 8, it is difficult to believe, what to say to accept, that the applicant would not have known the name of the tenderer he could have known the bid amount of that tender but very conveniently stated that bidder is unknown to the applicant.

9. Be that as it may, the bid of the assets of the company given by Jyoti Steels and Traders has already been accepted and confirmed in favour of the Delhi Minerals and Metals Pvt. Ltd. subject to the full payment of the sale price. The reference here may have to the order dated July 26, 2002, made in S. B. Miscellaneous Company Application No. 49 of 2002, which reads :

"Representative of Jyoti Steel and Traders, the tenderer, who has given the highest bid for the purchase of the unit, despite of persuasion from the court and the representatives of the secured creditors, is not in a mood to raise the bid. To the contrary he submitted that in case this bid is not acceptable, his earnest money deposited be returned to him.

The secured creditors are ICICI, IDBI and IFCI. I am confident in case they would have made an honest and positive approach and efforts, there may not be any difficulty for them to have a good prospective buyer for the assets of the company in liquidation.

Be that as it may, the secured creditors are in agreement that the bid of Jyoti Steel and Traders be accepted. What they submit that in case the bid is not accepted and we go for fresh tenders, leaving apart that it costs heavily, there is all the possibility that we may not get any buyer. This appreciation of the representatives of the secured creditors may not be fully baseless.

The official liquidator placed for perusal the letter dated July 22, 2002, of the advocate for the party who is interested in this unit and appears to have filed D. B. Special Appeal (company but the proceedings of confirmation of sale of this unit of the company in liquidation have not been stayed. As there is no stay order from the Division Bench, there may not be any legal or factual impediment to confirm this bid of Jyoti Steel and Traders, Faridabad.

Accordingly, the bid of Jyoti Steel and Traders, Faridabad of Rs. 1,31,50,000 (rupees one crore thirty-one lakh fifty thousand) is accepted in favour of its nominee, Delhi Minerals and Metals Pvt. Ltd., Delhi, on as is, where is and whatever there is basis and the sale is confirmed in favour of the Delhi Minerals and Metals Pvt. Ltd. having h. o. at 2527, Outside Turkman Gate (Near LIC Building) Delhi as requested by Jyoti Steel and Traders, Faridabad, vide its letter annexure D subject to the payment of full amount of sale price and terms and conditions of the sale."

10. The sale of assets of the company (in liquidation) has been made by inviting tenders on all India basis. It is not the case of the applicant that it has not noticed this notice inviting tenders.

11. The publication charges of notice inviting tenders are very heavy, about rupees three lakhs sixty thousand. In case this applicant would have really been interested in purchase of assets of the company (in liquidation) it would have given its offer but that has not been done. Much after the acceptance of the tender Jyoti Steel and Traders applicant submitted application dated August 29, 2002.

12. The applicant talks very high as if it is the only person to care and keep the public interest.

13. The way and the manner in this application is filed and the averments made therein go to show that the possibility of filing of the same with some ulterior motive, cannot be ruled out. In the facts of this case, it is difficult to accept that the applicant would have really been interested to purchase this property.

14. There is every possibility that after knowing the figure of the bid of the bidder the applicant woke up and filed this application and gave his offer of rupees one crore fifty-six lakhs. This way after opening tenders and confirmation of sale on the basis of this offer given if the sales are being recalled and inter se bidding is insisted on or fresh notice of inviting tenders is published, the people will not repose faith, confidence and believe in this system. The official liquidator alone is not empowered to do all these things. He is working under the supervision and control of the court. His every act is subject to approval and confirmation by the court. When there was no other offer and all the secured creditors were agreeable to accept this offer for the reason that they would have apprehension that on retender the purchaser may not be available even with this offer, the sale has been confirmed. Learned counsel for the applicant has failed to show any provision from the Companies Act or the rules framed thereunder where under the court has power to recall the order of the confirmation of sale, more so when it is not the case of the applicant that the highest bidder has played any fraud and got his offer confirmed.

15. I have my own experience that the sale of the properties of the company which is ordered to be wound up is very difficult. In many cases even after publishing notices inviting tenders not a single person come forward and gave his offer. Whatever the court in the facts of this case finds reasonable the reserved price of the assets is accordingly fixed.

16. Be that as it may this prayer made in the application cannot be accepted behind the back of the party whose bid has been accepted and sale is confirmed in his favour. In the case any order in favour of the applicant is made in this application it may adversely affect the right of the highest bidder whose bid has already been accepted. The highest bidder is a necessary party to this application but he has not impleaded. The applicant appears to have made attempt to get this order behind the back of the affected party which is not permissible keeping in view the principles of natural justice and fair play.

17. Leaving apart all this from the order da

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ted July 26, 2002, I find that some other person interest to purchase these assets of the company (in liquidation) filed D.B. Special Appeal (company) and which is pending. Where the applicant is really and fairly interested to purchase the assets of the company (in liquidation) may approach to the Division Bench in the appeal where the matter is sub judice, After confirmation of sale and more so when the appeal is pending in the Division Bench and the highest bidder is not impleaded as a party to this application, the relief as prayed for therein cannot be granted. 18. As a result of the aforesaid discussion, this application is dismissed. How ever, dismissal of this application will not come in the way of the applicant where it desires either to file an appropriate application before the Division Bench in the appeal or fresh application after impleading the highest bidder a party thereto.