Jharkhand High Court
Mantri Impex Pvt. Ltd vs Vrs on 31 August, 2018
Author: Aparesh Kumar Singh
Bench: Aparesh Kumar Singh
IN THE HIGH COURT OF JHARKHAND AT RANCHI
C.P. No. 04 of 2003
Mantri Impex Pvt. Ltd. ............Petitioner
Vrs.
Kaizen Auto Ltd. & others ............. Opposite Parties
.......
CORAM: HON'BLE MR. JUSTICE APARESH KUMAR SINGH For the Petitioner : M/s Biren Poddar, Sr. Adv., Darshana Poddar Mishra & Deepak Sinha, Advs.
For the O.L. : M/s H.K. Mehta, Manjushri Patra
For the Interveners : Mr. Manish Mishra(I.A. No. 6757/2018)
: Mr. Vikash Pandey(I.A. No. 7816 of 2018)
: Mr. Krishna Kumar (I.A. No. 5490/2018)
: Mr. Rahul Kumar (I.A. No. 5672 of 2018)
I.A. No.5655 of 2018
71/31.08.2018 Heard learned Senior Counsel Mr. Biren Poddar representing the
applicant in the instant interlocutory application and Mr. H.K. Mehta, learned counsel representing the Official Liquidator (O.L.).
Learned Senior Counsel for the applicant submits that Petitioning Creditor M/s Mantri Impex Pvt. Ltd. has been taken over by the present applicant M/s Govind Promoters Pvt. Ltd., which merger has been approved by the Hon'ble Calcutta High Court in Company Petition No. 41 of 2008 with Company Application No. 55 of 2008 under Section 391(2), 392 and 394 of the Companies Act, 1956 vide order dated 24.06.2008. It is further stated that the present applicant, M/s Mantri Corporate Holdings Pvt. Ltd. and M/s Mantri Impex Pvt. Ltd. (Petitioning Creditor) had filed petition before the Hon'ble Calcutta High Court in the matter of scheme of amalgamation of these companies. The Calcutta High Court has approved the scheme of amalgamation by order at Annexure-1 dated 24.06.2008. Therefore, applicant may be allowed to be substituted in place of the original petitioner. It is further pointed out by learned Senior Counsel for the applicant that the original petitioner had informed the O.L. of merger through letter dated 19.09.2015. O.L. by letter dated 29.03.2016 informed the petitioner that matter is under process and further development shall be intimated. In the O.L.'s report dated 19.07.2017 this fact has been brought on record. O.L's report dated 16.08.2017 also makes reference to this letter.
Learned counsel representing the O.L. has not opposed the prayer. On consideration of the submission of learned counsel for the parties, prayer of the applicant finds support from the enclosed order of the Calcutta High Court. However, it would not be out of place to mention here that the present applicant has approached this Court for substitution after considerable 2 delay when the process of auction sale of the assets of the Company under liquidation has progressed by virtue of the order of this Court dated 18.05.2018. However, since the legal status of the applicant is not in dispute and that the original Petitioning Creditor has merged with the present applicant, prayer for substitution should not be disallowed only on the ground of delay in approaching this Court. As such, present applicant is permitted to be substituted in place of the original petitioner. Registry to carry out the correction in the main matter at the relevant places. Instant I.A. is disposed of.
I.A. No. 5656 of 2018This application has been filed by the applicant M/s Govind Promoters Pvt. Ltd., who has been substituted in place of the original Petitioning Creditor by the order passed today as above. The original Petitioning Creditor had approached this Court in the present matter under Section 433, 434 and 439 of the Companies Act, 1956 seeking winding up of the opposite party Company on a plea that its outstanding dues as on 10.10.2002 is Rs.10,26,356.21/- Annexure-11 to the main petition dated April 20,2002 has been relied by the petitioner in support of the Statement that the Opposite Party had acknowledged an amount of Rs. 10,73,182.64 as on 31.03.2002 due to the petitioner.
In the present interlocutory application the present petitioner has claimed that its outstanding dues have swelled up to Rs.2,02,13,306.28 as on 31.05.2018. The original amount has increased due to inclusion of the interest component in terms of the "The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertaking Act, 1993". It is the case of the petitioner that auction of the assets of the Opposite Party Company being undertaken pursuant to the public notice issued under the order of this Court would not be able to meet the claim of the petitioner. Therefore, he has prayed for scrapping the entire bidding process. Petitioner states that he is ready to acquire the properties in question of the Opposite Party in lieu of its entire claim and that it undertakes not to claim any further amount in this regard and shall also pay the expenses incurred by O.L. The inherent power of the Court under Rule 9 of the Company (Court) Rules, 1959 have been relied upon to support the said prayer.
Learned counsel representing O.L. has opposed the prayer. He submits that the amount projected by the petitioner is totally imaginary. O.L. has not adjudicated any such amount as due to the Petitioning Creditor. The amount claimed by the petitioning creditor was Rs.10,73,182.64 . Valuation of the 3 assets of the Company under liquidation had been made and comment had also been invited from the learned counsel for the petitioner before proceeding for auction of the assets of the Company under liquidation. On such imaginary claims, bidding process should not be subverted. The present petitioner would have a lawful claim only to the amount adjudicated by the O.L.. As such, the prayer of the petitioner deserves to be rejected.
I have considered the submission of learned Senior Counsel for the present petitioner and learned counsel representing O.L. It is evident from the orders dated 06.04.2018 and 18.05.2018 that the process for auction sale of the assets of the Company under liquidation were initiated after obtaining the valuation report from the fresh valuer and on independent inquiry also made by the O.L. through AIADA and also after inviting comment of the petitioning creditor on the valuation report. The intending bidders have submitted their bids by 15.06.2018 in sealed cover. The present petitioner has projected a wholly imaginary amount of Rs.2,02,13,306.28 based on the assumption that the original amount of Rs.10,73,182.64 added with interest as per the Act of 1993 would have come to the present value.
Undisputedly, this claim is not determined by any statutory forum or Court of law or the O.L. Petitioner could be entitled to receive an amount adjudicated by the O.L. as per its original claim. The auction process should not be scrapped on the prayer of the petitioner based on such imaginary claims. As such prayer of the petitioner is rejected. Accordingly, instant I.A. is also rejected.
I.A. No. 5490 of 2018, I.A. No. 7816 of 2018, I.A. No. 6757 of 2018 and I.A. No. 5672 of 2018 Pursuant to the order dated 18.05.2018, 3 bidders have submitted their bids by the cutoff date 15.06.2018 along with earnest money as per the terms of the sale notice, which bids are kept in sealed cover and yet to be opened. Applicants / Interveners in the aforesaid interlocutory applications have come thereafter to participate in the bidding process.
Applicant in I.A. No. 5490 of 2018 has come forward with an initial offer price of Rs.50 Lakhs of the total scheduled property along with other assets of the company and has come ready with a draft of Rs.8 Lakhs as security money to participate in the auction. The draft is dated 28.06.2018. The applicant has submitted that the advertisement issued in the two newspaper Prabhat Khabar and Hindustan in Jamshedpur could not be noticed by it. If wider publication could have been made applicant / intervener would 4 not have missed the cutoff date. He has approached this Court on 29.06.2018 i.e., the date of opening of the bids. The applicant has therefore sought permission to participate in the bidding process. It is his submission that larger participation would fetch higher amount towards sale of the assets of the company.
Applicant in I.A. No. 7816 of 2018 has also approached with a prayer to permit it to participate in the bidding process which is scheduled for today. He has proposed to offer an initial price of Rs.75 Lakhs for the entire scheduled properties in question. According to him also the sale notice would not come to his knowledge and as such, he could not submit his bid before the cutoff date. He is ready with a draft of Rs.8 lakhs towards security money for being permitted to participate in the bidding process. Learned counsel for the applicant has relied upon the inherent power of the Court under Rule 9 of the Rules 1959 to permit participation in the bidding process so that maximum amount can be fetched out of the sale proceeds of the assets of the Company under liquidation.
Applicant in I.A. No. 6757 of 2018 has also sought to participate in the bidding process stating that the auction sale public notice would not come to his knowledge and he could not participate by the cutoff date. This applicant has offered a sum of Rs. 40 Lakhs towards sale consideration of the assets of the Company and has come ready with a bank draft of Rs.8 Lakhs towards earnest money for participating in the bidding process.
Applicant in I.A. No. 5672 of 2018 also seek to participate in the bidding process. Learned counsel for the applicant states that he has come ready with a demand draft of Rs.8 Lakhs dated 03.07.2018 in favour of the O.L. towards earnest money. This applicant has not quantified its offer amount. Learned counsel for the applicant however submits that if he is allowed to participate in the bidding process, he is ready to offer an amount which matches with the other intending bidders. He submits that if the applicant is allowed to participate in the bidding process, it could have a wider participation to serve the larger public interest of fetching highest amount towards the sale of the Company under liquidation. Learned counsel for the applicant has relied upon the observation of the Hon'ble Supreme Court made at para 15 of the report in the case of Shradhha Aromatics Private Limited Vrs. Official Liquidator for Global Arya Industries Limited & others reported in (2011) 6 SCC 207 in support of his aforesaid prayer.
These applications has been opposed by learned counsel Mr. Manoj 5 Tandon, who represents one of the bidder M/s Aditya Infrastructure Pvt. Ltd., who has submitted his bidding before the cutoff date. He submits that this could jeopardize the interest of the bidders who have duly submitted their bid before the cutoff date. If such bids are entertained, there would be no end to the process.
Learned counsel for the O.L. submits that applicants have approached this Court after cutoff date and projected their offer with the earnest money through demand drafts. Wider participation of the bidders may fetch more competitive price for the assets of the Company under liquidation. However, applicants have approached after the cutoff date. He submits that in certain other matter C.P No. 2 of 2002, such intending bidders were allowed to participate at the time of bidding process though they had not submitted their bids by the cutoff date with the object to fetch highest price of the assets of the Company under liquidation. Learned counsel representing the O.L. has relied upon a decision rendered by the Hon'ble Apex Court in the case of Divya Manufacturing Company (P) Ld. Vrs. Union of India reported in 2000(6) SCC 69 in support of his submission.
I have considered submission of learned counsel for the applicants, O.L. and learned counsel representing one of the bidder who has submitted his bid before the cutoff date. Ordinarily the cutoff date fixed in such auction bid is to be respected. The bidders who have submitted their bids on or before the cutoff date have a justified arguments in their favour that the bids submitted within time only ought to be considered during the auction process. However, the larger objective in such auction process is to ensure that highest price is fetched for sale of the assets of the Company under liquidation. In the facts of the present case, by the cutoff date 15.06.2018 only 3 bidders have submitted their bid along with their earnest money. 4 applicants have turned up seeking to offer attractive price towards the sale of the assets of the Company. As is evident from the order dated 18.05.2018 valuation of the properties was kept at Rs.27,43,034/-. This was on the basis of the comparative assessment of the valuation report of the present valuer and also on independent queries made by the O.L. and depreciation of the assets of the Company under liquidation. The sale notice consciously avoided mention of any reserve price with EMD of Rs.8 Lakhs. These bids have not been opened till date. Wider participation of intending bidders in the auction of the properties may fetch maximum price for the assets of the Company under liquidation which is the utmost concern in such bidding process. However 6 acceptance of the prayer of these applicants only to participate in the bidding process after the cutoff date would not be strictly in consonance with the principle enshrined under Article 14 of the Constitution of India denying equal opportunity to any other genuine bidder. No harm would be caused to the bidders who have already submitted their bids, if a fresh notice with the same terms and conditions be published with fresh cutoff date with an object of wider participation in the auction process to fetch highest offer price on the sale of the assets of the Company under liquidation. Present applicants have shown their genuine willingness to participate in the bidding process by coming ready with the demand draft towards the earnest money of Rs. 8 Lakhs. Applicants' earnest money can be deposited with the O.L. with the condition that they would not be allowed to withdraw from the bidding process as per the extended cutoff date.
As such, this Court is inclined to direct the O.L. to issue a corrigendum of the sale notice dated 30.05.2018 extending the cutoff date for submission of bid till 14.09.2018 in the same manner as earlier directed in the order dated 18.05.2018. Let the corrigendum be issued by 07.09.2018. Intending bidders would be allowed to inspect the assets of the Company on 11.09.2019 between 10 a.m. to 3.30 p.m. on the said date in the presence of the O.L. or his representative. The bids submitted by the original bidders, present applicants and any fresh bidder would be opened on 28.09.2018. Let it be made clear that there would be no further extension of the cutoff date. Applicants shall submit their earnest money deposit before the O.L. today itself and a forwarding letter indicating the offer already made by them. Instant I.A.s are disposed of in the aforesaid terms.
O.L. shall in the meantime adjudicate the claim of the petitioner. Let a copy of the order be handed over to learned counsel representing the O.L. (Aparesh Kumar Singh, J.) A.Mohanty