Gujarat High Court
The Official Liquidator Of M/S Aps Star ... vs The Deputy General ... on 5 July, 2019
Author: Sonia Gokani
Bench: Sonia Gokani
C/OLR/43/2019 IA ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CIVIL APPLICATION (FOR DIRECTION) NO. 1 of 2019
In R/OFFICIAL LIQUDATOR REPORT NO. 43 of 2019
In R/OFFICIAL LIQUDATOR REPORT NO. 150 of 2018
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LANDMARK SEEDS CORPORATION (THROUGH PROPRIETOR RAMESH LAXMANBHAI MAYANI) Versus THE OFFICIAL LIQUIDATOR OF M/S APS STAR INDUSTRIES LTD(IN LIQUIDATION) ========================================================== Appearance:
MR.NISARG P RAVAL for the PETITIONER(s) No. MR MOHD.HANIF SHAIKH for the RESPONDENT(s) No. MR PATHIK M ACHARYA for the RESPONDENT(s) No. MR PY DIVYESHVAR for the RESPONDENT(s) No. MR RAJESH P MANKAD for the RESPONDENT(s) No. MR SUBRAMANIAM IYER for the RESPONDENT(s) No. MR. JAIMIN R DAVE for the RESPONDENT(s) No. MR SAURAV CHATURVEDI, THAKKAR AND PAHWA ADVOCATES for the RESPONDENT(s) No. ========================================================== CORAM: HONOURABLE MS JUSTICE SONIA GOKANI Date : 05/07/2019 IA ORDER
1. This is an application, seeking extension of time by two weeks for making payment of EMD amount as well as the Late Entry Fees, which is 10% of the total amount of EMD, and thereby, to permit the applicant to participate in the bidding process.
2. The applicant is a proprietor ship concern, having its permanent address, as mentioned in the cause title. The applicant came to know from the trade circle about the sale / auction of the property of M/s. APS Star Industries Ltd. (In Liquidation), situated at 'Dombivali of Lot No.1', admeasuring about 16,222 sq. mts., having Revenue Survery Nos. 234 (Part), 237 (Part), 236/1 (Part), 42 (Part),, 43/1 (Part),, 44/2 (Part), 44/3 (Part), situated at Village : Bhopar, Manpada Road, Oppo. M/s. Kitchen Kraft Shed & MIDC, Off. Kalyan:
Sheel Phata Road, Bombivali (East), Thane, Maharashtra (in brief 'Said Property') ,by the learned Official Liquidator. The applicant, therefore, wrote several letters and also sent several e-mails to the Official Liquidator , showing his interest in the said property.Page 1 of 7 Downloaded on : Fri Jul 12 00:58:43 IST 2019
C/OLR/43/2019 IA ORDER
3. The applicant through his learned Advocate, approached this Court and sought time to enable him to participate in the auction and in the bidding process. A request was also made to permit the applicant to pay EMD with Late Entry Fees for the said purpose.
4. This Court, on 02.07.2019, passed a detailed order and granted time to the applicant to pay the EMD along with Late Entry Fees.
5. It is the say of the applicant that he could not arrange for funds, and therefore, could not make the payment of EMD and Late Entry Fees, as permitted by this Court, It is urged that there is no malice or bad intention on the part of the applicant in making a request for extension of time. It is, further, his say that the rights of none the parties has been crystallized so far, since, this Court has not confirmed the sale, as provided under Section 272 of the Companies Act, yet.
6. This Court has heard the learned Advocate for the applicant, Mr. Raval, who has urged that this Court needs to consider his request sympathetically, since, he is ready and willing to abide by all or any of the terms and conditions, as may be imposed by this Court.
7. Learned Advocate, Mr. Saurav Chaturvedy, appearing for Thakkar and Pahwa Associateas has objected to this on the ground that much time has elapsed and the single bidder, only has come after a long period of time, for the property at Dombivali and has offered the amount, which is in fact not the value of the property.
8. Learned Advocate, Mr. Aiyer, appearing for a group of workers, also has resisted this on the ground that the after order of Page 2 of 7 Downloaded on : Fri Jul 12 00:58:43 IST 2019 C/OLR/43/2019 IA ORDER winding-up was passed, huge expenses have been made, but, no one has seen the colour of money from the sale of the said property, till date.
9. Learned Advocate, Mr. Mankad, has supported the learned Advocate, Mr. Aiyer.
10. Learned Advocate, Mr. Acharya, appearing for the Official Liquidator has urged that the applicant, since, has not abided by the course order, no leniency be shown.
11. Learned Advocate, Mr. Jaimin Dave, appearing for the respondent has urged that Rules 7 and 9 will permit this Court to extend the time limit, since, these powers are akin to the powers available to this Court under the Code of Civil Procedure, which are inherent powers and it is for this Court to exercise such powers or not.
12. Learned Advocate, Mr. Bhatt, appearing for the sole bidder for the property at Dombivali has seriously resisted this on the ground that after once the Court had specifically directed the applicant to deposit the amounts towards EMD and the Late Entry Fees, he could not have asked for extension. According to him, this is nothing, but, an attempt to halt and thwart the entire proceeding. He, therefore, urged that this application may not be entertained by this Court.
13. Having heard learned Advocates on both the sides and having considered the submissions made before this Court, apt it would be to reproduce the order of this Court dated 02.07.2019, which reads thus:
"1. This report is filed by the Official Liquidator Page 3 of 7 Downloaded on : Fri Jul 12 00:58:43 IST 2019 C/OLR/43/2019 IA ORDER ('OL' in brief), seeking following reliefs:
"5) ...
a) This Hon'ble Court may be pleased to take on record aforesaid facts, as stated herein above.
b) This Hon'ble Court may be pleased to open the said sealed covers for kind consideration and further directions as may be deemed fit and proper under the circumstances of the case as per the Terms and Conditions of sale.
c) This Hon'ble Court may be pleased to permit the Official Liquidator to pay professional bill of e-auction service provider agency namely M/s. E-Procurement Technologies Ltd. of Rs.11,800/-.
d) This Hon'ble Court may be pleased to permit the Official Liquidator to pay advertisement bill of advertising agency as per para-2 of this report.
e) ..."
2. Today, the Court, on hearing both the sides, opened the sealed cover.
3. At this stage, learned Advocate, Mr. Nisarg P. Raval, has tendered an application for and on behalf of his client, namely Mr. Ramesh L. Mayani, who is the proprietor of Landmark Seed Corporation, expressing his inclination, under his instructions, to purchase the property at 'Dombivali' of Aps Industries Limited, i.e. the company in liquidation, who is willing to make an offer for the subject property along with the Demand Draft of EMD and Late Entry Fees. He ensures that the same shall be deposited on or before 05.07.2019. He also has, further, submitted that an E-mail also has been sent showing his client's interest in the subject property to the Office of the OL and has requested that inspection of the document of the property and such letter has already been brought on record of the OL.
4. Likewise, learned Advocate, Mr. Nilay A. Thaker, under the instructions of his client, namely Mr. Ramesh Nagjibhai Desai, who is partner of Siddhi Page 4 of 7 Downloaded on : Fri Jul 12 00:58:43 IST 2019 C/OLR/43/2019 IA ORDER Vinayak Corporation, which is a partnership firm, has moved an application under his signature today, urging that the partnership firm is interested in purchasing the property in question, which is situated at 'Dharawad', Plot No.1, i.e. lease hold land admeasuring about 27 acres, situated at Plot No. 115 to 121, Karnataka. He also has ensured to make an application along with DD of EMG and Late Entry Fees, which is 10% of the of the EMD, by 05.07.2019, and thereby, permit the intended purchaser to make his offer.
5. Since, these two applications have come after the E-auction, which was conducted on 22.02.2019 and today sealed cover pertaining to the said E-auction were opened, there was serious resistance for and on behalf of the learned Advocate Mr. Bhatt, appearing for the sole bidder of Dombivali property, who also chose to raise his bid by Rs.10/- (Ten) Lakh further, which was, otherwise, as per the upset price, as, according to him, this is too belated to be permitted.
6. Learned Advocate, Mr. Dave, appearing for 483 workers and Mr. Subramaniam, appearing for another group of workers also made a request to this Court to allow the bidders. In support of his submissions, he has sought to rely on the following authorities:
(1) 'DIVYA MANUFACTURING COMPANY (P) LTD.
TIRUPATI WOLLLEN MILLS SHRAMIK
SANGHARSHA SAMITY AND ANOTHER VS UNION
BANK OF INDIA AND OTHERS, OL AND OTHERS',
(2000) 6 SCC 69;
(2) 'OL OF AHMEDABAD MFG. AND
CALICORPORATING MILLS CO. LTD. VS. MANAGER, IDBI', OLR No. 61 of 2005 in Company Petition No. 157 of 1995, Dated: 18.07.2005;
(3) 'CLINCH SILICONES PVT. LTD. VS. OL OF M/S. MUKUND CHEMICALS LTD. (IN LIQUIDATION)', OJCA No. 817 of 2017 in OLR No. 33 of 2017, Dated:
15.12.2017;
(4) 'OL OF ESSEN COMPUTERS LTD. (IN LIQUIDATION) VS. DIRECTOR, ESSEN FINANCE AND INVESTMENT LTD.', OLR No. 118 of 2018, Dated:
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16.01.2019;
7. Learned Advocate, Mr. Pathik Acharya, appearing for the OL also has urged this Court to allow the applicants to bid and to hold an auction in the open Court. He also has urged that those, who have newly joined should pay their EMD and late fees, which shall be 10% of the amount of EMD. He, further, requested that their advertisement, itself, indicates that this Late Entry Fees will be forfeited, once a bidder remains unsuccessful in the auction.
8. Considering the ratio laid down in the authorities, which have been tendered before this Court, where, the Court has permitted the intended purchasers to appear and participate in the auction proceedings and who were, otherwise, not able able to do it within the time-limit stipulated, this Court deems it appropriate to allow the applicants to take part in the auction proceedings for which they shall have to move a formal application with EMD and 10% amount of EMD as Late Entry Fees, with a clear understanding that the same shall stand forfeited, in case of they remain unsuccessful. Non-deposit of the aforesaid amount on or before 5th July, 2019, shall not permit the applicants to participate, as there will be no relaxation in that condition.
9. A request is also made to permit the inspection of the documents, which have been filed by the OL in relation to the auction proceedings, the same shall also be permitted by the office of the OL.
10. Out of the total four copies, two copies are with the learned Advocate, Mr. Acharya, appearing for the OL.
11. S.O. to 5TH JULY, 2019, at 01:00 p.m.".
14. From the above, it is apparent that this Court had made it abundantly clear that there shall be no further extension sought. Despite the specific directions issued by this Court, the applicant has chosen not to deposit the amount of EMD and the Late Entry Fees and has instead chosen to prefer this application, seeking extension of two weeks.
Page 6 of 7 Downloaded on : Fri Jul 12 00:58:43 IST 2019C/OLR/43/2019 IA ORDER Realizing the powers of this Court and also keeping in mind larger good of the public, this Court has chosen not to confirm the bid so far and had granted permission to the present applicant to participate. He, since, has completely failed in showing his bona fide, this Court does not deem it appropriate to grant further time of two weeks, as has been prayed for in this application. Had it been a case that in a regular course the applicant had faced genuine difficulty and had approached this Court for extension. In the midst of hearing the application for confirmation of sale when the party, alien to the process intends to join and participates, it is though welcome, it must be ready and prompt to respond. Instead, in the instant case, the applicant being fully aware and conscious of the direction of this Court has failed to deposit and thereby to express and establish its bona fide and hence, this application also appears to have been preferred without, in fact, any seriousness. No party can be permitted to create unnecessary ripple in the smooth flow of functioning of the proceedings without any reason.
15. Resultantly, this application fails and is REJECTED with the costs of Rs.50,000/- to the applicant, which shall be deposited before the registry of this Court within a period of three weeks from the date of receipt of a copy of this order.
(SONIA GOKANI, J) UMESH/-
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