Company Application No. 42 of 2020 has been taken out by the Official Liquidator on behalf of M/s Shree Gouraavi Plastic Ltd. (company in
liquidation) seeking the following relief:
1) take the report / e-auction proceedings submitted on 11.09.2019 by the e-auctioneer viz. M/s Shriram Automall India Limited on record in the
company (in liquidation);
2) take on record the action taken by the Official Liquidator in returning the EMD amount to the unsuccessful bidders as per the directions of the then
Hon’ble Company Judge and to give post facto approval for the same;
3) confirm the sale in favour of Sri Y. Sreedhar, Jubilee Hills, Hyderabad, who has offered the highest amount of Rs.5,12,00,000/- (five crore twelve
lakhs only) towards the purchase of the land to an extent of Ac.2.04 guntas, buildings / sheds and plant and machinery at Plot No. 140, Miyapur, IDA
Bollaram Village, Narsapur Taluk, Sangareddy District (formerly known as Medak District) against the Minimum Upset Price of Rs.5,00,00,000/- and
to collect the balance sale consideration amount of Rs.4,77,00,000/- ie. (excluding the EMD amount of Rs.35,00,000/-) from Sri Y. Sreedhar,
purchaser within 30 days from the date of receipt of order of this Hon’ble Court as per the terms & conditions of the sale;
4) permit the Official Liquidator to hand over the possession and to execute the necessary sale deed in favour of Sri Y. Sreedhar after receipt of the
balance sale consideration;
5) order that the cost of this application and other incidental expenses do come out of the assets of the company.
This Court, in Company Application No. 632 of 2018, taking into consideration the developments from time to time and also the prevailing market
value, by its order dated 20.12.2018, directed the Official Liquidator to call for fresh expression of interest for buying the property of the company in
liquidation, stated supra. Thereafter, M/s Shriram Automall India Limited was engaged as an Agency to carry out the advertisement and call for
expression of interest and for conducting e-auction. Necessary advertisements were issued and the intending sale proposals were also widely
circulated in the locality more particularly, with various industrial concerns situated in and around the property in issue. E-auction was held on
11.09.2019. Three qualified bidders participated in the e-auction; they are 1) Sri Yarlagadda Sreedhar, who offered an amount of Rs.5,12,00,000/-, 2)
Nine Home Projects, which offered Rs.5.7 crores, and 3) Sri Bharat Simha Reddy, who offered Rs.5.2 crores. EMD of unsuccessful bidders Sri
Bharat Simha Reddy and Nine Home Projects was returned. Though this Court directed the Official Liquidator to seek better offers from the potential
bidders, since no bidder/purchaser has come forward, it is stated, as per the directions of this Court, the Official Liquidator had negotiated with the
successful bidder but he denied to increase the price further. Subsequently, the Official Liquidator had returned the EMD to Sri Y. Sreedhar, however,
the same was returned with postal endorsement “unclaimedâ€. Thereafter, the successful bidder requested his offer to be accepted, in view of the
earlier failed attempts of the Official Liquidator to return the EMD. While the things stood thus, an e-mail was received on 27.11.2020 on behalf of
M/s Bajaj Heavy Engineering Limited stating that they were willing to offer a sum of Rs.5,45,00,000/-. As it was not the participant pursuant to the
auction conducted on 11.09.2019 and its offer being outside the auction, the Official Liquidator advised the said party to approach the Court for
necessary directions.
It may also be noted that vide order dated 29.09.2020, this Court, taking note of the offer of Sri Yarlagadda Sreedhar, had directed the Official
Liquidator to negotiate with him so as to fetch higher amount with respect to the property which was put to auction. The Official Liquidator vide report
dated 17.06.2020, in OLR No. 15 of 2021 had stated that the applicants in I.A.Nos. 1 to 4, 5 & 6 of 2020 were not participants in the e-auction and
they had also not paid the necessary EMD. He had also stated that the offers / objections after confirmation of the sale should not ordinarily be
allowed. Reliance was sought to be placed on the judgment of the Supreme Court in Valji Khimji & Company v. Official Liquidator of Hindustan Nitro
Product (Gujarat) Ltd (2008) 9 SCC 299.
The Official Liquidator, however, stated that there is a discretion with the Company Court either to accept or reject the highest bid before an order of
confirmation of sale is made. In support of this contention, a reference was made to the judgment of the Supreme Court in Vedica Procon Private
Limited v. Balleshwar Greens P. Ltd 2015(8) SCALE 713. which approving the view taken in Navalkha and sons v. Sri Ramanya Das 1969(3) SCC
537, held that “there is a discretion in the Company Court either to accept or reject the highest bid before an order of confirmation of sale is made.
However, once the Company Court is satisfied that the price is adequate, the subsequent higher offer cannot be a ground for refusing the
confirmation. The price of immovable property keeps on varying depending upon the market conditions and availability of a buyer. Such fluctuations
may attract fresh higher offers but normally such offers cannot be made the basis for reopening the confirmed sale which was otherwise valid.â€
The matter was listed on 19.04.2021, 18.06.2021, 24.06.2021, 08.07.2021 during which time, the learned counsel for implead party petitioners, learned
counsel for IDBI as well as learned counsel appearing for the Official Liquidator were heard at length.
Keeping in view the discretion vested with the Company Court and keeping in view the objective of getting best possible consideration for the property
which was proposed to be sold by the company in liquidation, the respective counsel were asked to make the best possible price. While the counsel for
the implead petitioners, after taking instructions from their clients, had made an offer of maximum of Rs.5.75 crores, the initial revised offer of the
successful bidder through Senior Counsel Sri S. Ravi was Rs.6.25 crores and on further persuasion, a final offer of Rs.6.50 crores was made,
however, he requested this Court to consider granting the facility of paying the money in five installments. To that effect, the successful bidder also
filed an affidavit on 09.07.2021, which came to be made as part of the record under USR No. 38112 of 2021, through their advocate on record Sri
Pavan Kumar. In the affidavit filed, the successful bidder had offered to pay the amount in five installments.
The learned Counsel Sri Markandeyulu, on behalf of the IDBI, beneficiary of the amount and representing the secured creditor, on instructions, while
agreeing that the price offered is fair and much more than the initial offer of Rs.3.50 crores, prayed, instead of granting four installments, the offer
may be accepted restricting the final payment to be completed before September 2021 as that month end would be the half-yearly financial closure of
the IDBI.
Having regard to the facts narrated above and taking into consideration the fact that the affairs of the company in liquidation are pending since long,
the company having been declared as sick company under Sick Industrial Companies ( Special Provisions) Act, 1985, the matter having been referred
to as ‘referred case’ before this Court, it is appropriate to approve the sale of the subject property on ‘as is where is and whatever there is
basis’.
IN THE RESULT, the price offered by the successful bidder, Sri Yarlagadda Sreedhar at Rs.6.50 crores is accepted. The amount of Rs.35,00,000/-
paid towards the Earnest Money Deposit shall be given credit to. He shall therefore, now pay Rs.6.15 crores, in four installments as under;
1) Rs.1,65,00,000/- on or before 29.07.2021,
2) Rs.1,50,00,000/- on or before 31.08.2021,
3) Rs.1,50,00,000/- on or before 30.09.2021, and
4) Rs.1,50,00,000/-on or before 31.10.2021.
In default of payment of respective installments by the due date, the same shall carry interest at 15% per anum. On receipt of the total consideration,
the Official Liquidator shall execute the sale document in favour of Sri Yarlagadda Sreedhar, who shall bear the necessary expenditure like stamp
duty, registration fee and any other expenses.
It is made clear that no claims whatsoever in relation to the subject property of the company in liquidation shall be entertained.
The Company Application is accordingly, disposed of. No costs.
Consequently, I.A.No. 8 of 2020 which was filed to confirm the sale conducted in e-auction dated 11.09.2019 thorough service provider M/s Shriram
Automall India Limited in favour of the petitioner therein as he is the highest bidder in the e-auction for the subject land, is allowed.
I.A.Nos. 2, 3, 4 and 6 of 2020 filed by the respective petitioners therein to 1) permit purchase of the subject property; 2) direct the Official Liquidator
to hand over the physical possession of the property pursuant to execution of the deed of conveyance; 3) direct the Official Liquidator to receive the
amount of Rs.5.45 crores duly adjusting EMD amount of Rs.35,00,000/-, execute conveyance deed, etc.; and 4) permit the petitioner to purchase the
property and to direct the Official Liquidator to receive the amount and execute conveyance deed, are dismissed.
Miscellaneous petitions, if any pending, shall stand closed.
