Case Law Details

Case Name : P.S.G. Krishnan Vs Official Liquidator of Rekha Cements and Chemical Ltd. (In Liqn.) (Karnataka High Court)
Appeal Number : Co. Application No. 1258 1259, 1284 & 1285 Of 2012
Date of Judgement/Order : 17/10/2012
Related Assessment Year :
Courts : All High Courts (3629) Karnataka High Court (192)

HIGH COURT OF KARNATAKA

P.S.G. Krishnan

Versus

Official Liquidator of Rekha Cements and Chemical Ltd. (In Liqn.)

CO. APPLICATION NOS. 1258 1259, 1284 & 1285 OF 2012

CO. PETITION NOS. 67 & 105 OF 1995

OCTOBER 17, 2012

ORDER

1. By order dated 01.10.2012, the company properties were auctioned in the open Court from among the persons who are present in pursuance to the Court notice. There was a valuation report dated 05.08.2010, since, the said report was a year old, a fresh report was sought, accordingly a fresh valuation report dated 15.09.2012 in a sealed cover was submitted and the same was opened, which was indicating the value of the property, Thereafter, from among the persons who are present they were asked to quote their price and they were stated their price for the liquidating company. From among the persons a bid was made for a sum Rs. 86,00,000/-by M/s. Udapudi Cements Pvt. Ltd., Lokapur Taluk, Bagalkot. Hence, the Official Liquidator was directed to handover the property on accepting the entire amount as per law.

2. Today there were four applications filed of which, three applications have been filed by the bidders with a prayer to recall the order dated 01.10.2012 and to permit the applicants in these applications to quote more price than the price for which it was finalized. Company Application Nos. 1258/2012 and 1259/2012 have been filed by Sri. S.N. Bhat, Advocate. In application No. 1258/2012 prayer is to recall the order dated 1-10-2012 and Company Application No. 1259/2012, is also for recalling the order and to permit him to offer Rs. 10,00,000/- more than the price for which it was sold in the last occasion. The Company Application No. 1258/2012 is fifed by the K.S.F.C, a prayer has been made to recall the order and the reasons stated is that, the learned counsel for the K.S.F.C is not shown in the cause list on the last occasion and there were more bidders and they were not permitted to participate.

3. Property was worth more than Rs. 1,10,00,000/-. However, the amount which, was quoted is lesser than the value of the property. In view of the said reason, prayer is made to recall the order. Another application made by Sri. S.S.I Quadri, Advocate, in Company Application No. 1285/2012 with a prayer to recall the order dated 01.10.2012 and to permit him to consider his case for purchasing the property for one crore. Totally there were three applications by different persons for the purpose of considering their case for quoting higher price i.e. highest price for which it was justified and the application made by K.S.F.C is for recalling the order, since they were not given an opportunity in not showing their name in the cause list.

4. The Company Petition Nos. 67/1995 C/W CO.P No. 105/1995 came to be allowed on 02.04.2002 and winding up order was passed. Pursuant to the said order the Official Liquidator by filing necessary application seeking permission to dispose of the property by auction, the OLR. No. 297/2002 is filed to that effect and the same was allowed and the Official Liquidator was permitted to proceed with Notification for the purpose of public auction.

5. It is submitted by the learned counsel for the Official Liquidator that, the public Notifications were issued for inviting public for the purpose of public auctions and further Valuator was directed to submit Valuation Report in the sealed cover and first valuation report was made. Since, the said report was a year old, further direction was issued to make a fresh report. Accordingly, the valuation report was submitted On the date when the case was called, four persons who responded to the public notice were present before the Court.

6. It is pertinent to state that, on accepting the bid amount bid sheet was prepared in the office of the Official Liquidator. Parties are invited and quoted their price and bid sheet was produced along with OLR.No.341/2012 of which, among the four bidders, M/s Udapudi Cements Pvt. Ltd., Lokapur Taluk, Mudhol District, Bagalkot, for whom sale was confirmed and was quoted Rs. 61,00,000/-. Thereafter, it was increased to Rs. 75,00,000/- even in the open Court, the same person quoted Rs. 86,00,000/r and the other three persons did not quote any amount. Accordingly, sale was confirmed in his favour.

7. In the light of the above the same was concluded in his favour. Under these circumstances, these three applications filed for recalling the order in application No. 1258/2012 made by one of the Director of the liquidation Company has stated that he was ready to pay Rs. 97,00,000/-and made a prayer to recall the order. In C.A. No. 1259/2012, similar prayer has been made to recall the order by permitting the applicant to buy the property for Rs. 97,00,000/-. In CA. No. 1285/2012, also same prayer has been made and all these three applications are for recalling the order dated 01.10.2012 and to permit them to participate by re-auctioning the property.

8. The State Finance Corporation filed its application No. 1285/2012 and made a prayer to recall the order by permitting all the persons to participate in the public auction. The learned counsel relies on the judgment reported in the matter of Shradhha Aromatics (P.) Ltd. v. O.L. of Global Arya Industries Ltd. [2011] 108 SCL 1 (SC) wherein Hon’ble Supreme Court permitted e-auctioning the property for highest bid. Hence, he submitted that this Court to exercise its power in recalling the order and to permit all these applicants to participate in the public auction.

9. I heard the learned counsel appearing for both the parties.

10. The question involved in these applications is:

“Whether these applicants are entitled to be allowed for fresh auction or to give sanctity to the proceedings initiated by this Court?”

11. As stated earlier, after the company petition is allowed, Official Liquidator was directed to take process and initiate auctions as per law. On filing necessary OLR, the Official Liquidator was permitted to take public Notification inviting the public to participate in the public auction. On two occasions, notifications were issued and on considering the same there were four persons participated and again they were directed to quote highest bid and bid sheet was made and available before this Court to consider. When an order passed by this Court it is to be considered by the public at large and the same concluded at the instance of this Court. Then it is the duty of this Court to give respect to its order by giving sanctity more than, over and above the highest bid. The cases cannot be concluded if for One or the other reasons as stated in these applications, the orders are recalled there in no end and this Court cannot put an end to the legal proceedings. This Court feels, by considering all these applications it may reduce to real estate business. Money is not the criteria sanctity of the order is the criteria.

12. In the application filed by the State Finance Corporation, the reasons assigned are examined. Since, from the day one i.e., in pursuance to first valuation report the learned counsel appearing on behalf of the KFSC was present before this Court. It is one year the proceedings have taken place. On hearing all the learned counsels, I have directed for the second report and thereafter the auction was considered in the open Court itself.

Under these circumstances, I am of the view the sanctity of the order of this court matters rather than higher value or the bid offered at a later stage after the bid was accepted. Accordingly, all the company.

Applications are dismissed.

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