Allahabad High Court
Triveni Metal Tubes Ltd. (In ... vs Official Liquidator And Anr. on 9 February, 1999
Equivalent citations: [1999]97COMPCAS943(ALL)
JUDGMENT A.K. Banerji, J.
1. The leasehold industrial land including standing trees and pucca factory building (excluding the temple area) and the old factory's steel structures of the company namely, M/s. Triveni Metal and Tubes Limited (in liquidation) were ordered to be sold by calling for tenders jointly by the Industrial Investment Bank of India (IIBI) as well as the official liquidator. After advertising the same in four newspapers, only five tenders were received within time on October 30, 1998, the date fixed by the court. One tender was submitted on the same day but beyond time. On the application of the said party, the court permitted the tender to be taken on record and be considered along with the other tenders. The aforesaid six tenders were opened in the presence of learned counsel appearing for the IIBI, IFCI and the PICUP as well as the official liquidator and the representatives of the parties who had submitted their tenders. Out of the six tenders received, the highest offer was of Rs. 1.12 crores of M/s. Umrao Steels, Kanpur. However, the parties were given an opportunity to increase their offers by bidding amongst themselves. M/s. Umrao Steels increased their offer to Rs. 1.20 crores, which was accepted as the highest bid. The minutes were recorded separately by the court. An order was also passed accepting the offer that the party which had given the highest offer shall deposit 25 per cent. of the consideration within one month and the balance amount in three monthly instalments. It is noteworthy that the said party deposited Rs. 1,11,50,000 (including the earnest money of Rs. 1,00,000 deposited on December 4, 1998) within one month on January 4, 1999, and has also deposited the balance amount of Rs. 8,50,000 on January 18, 1999.
2. On January 4, 1999, however, an application was filed before this court by one Manoj Kumar Mishra (Mishra in short) praying that as the auction purchaser has flouted the orders passed by this court on December 4, 1998, the order dated December 4, 1998, passed in favour of the said party be recalled and the offer now being given by the applicant Mishra of Rs. 1.40 crores be accepted. Alternatively, it was prayed that another date be fixed for calling fresh tenders regarding the property in question. A similar application (A-21) has been filed on behalf of Asif Ansari for recalling the order dated December 4, 1998, and to forfeit the earnest money of M/s. Umrao Steels and to accept the bid of Rs. 3,75,000 for lot No. 2 given by the said applicant. Counter affidavit has been filed by the official liquidator to the applications (A-20) and a rejoinder has been filed to the same.
3. I have heard Shri S.P. Pandey, learned counsel for the applicant Mishra, Shri Bhola Nath Singh, advocate for Asif Ansari, Shri R.P. Agrawal, who appeared on behalf of M/s. Umrao Steels as well as the official liquidator. I have also perused the record of this case.
4. Learned counsel appearing for the applicants--Manoj Kumar Mishra and Asif Ansari have strongly contended that the owners of M/s. Umrao Steels have flouted the orders passed by this court inasmuch as on December 15, 1998, they have forcibly taken away 800 tins from the factory worth about Rs. 3 lakhs. In support of the said allegations, a typed copy of an alleged complaint made to the official liquidator by the security guard Bhanu Pratap Singh on December 24, 1998, has been annexed. It has been further contended that the said purchaser had flouted the orders passed by this court on December 4, 1998, as they had taken possession prior to the confirmation of the sale and have removed material forcibly and without any orders. In the counter affidavit filed by the official liquidator the allegations made in the affidavit filed in support of the applications (A-20) and (A-21) have been vehemently denied as totally false and motivated. The official liquidator in his affidavit has stated that his office had not received any complaint from the chaukidar posted there. A registered envelope was received in his office on January 5, 1999, which was opened and in the presence of his staff it was found that the same contained a blank piece of paper. Therefore, he made an endorsement "only plain paper was found inside the letter. The staff members were present. In their presence it was discovered".
5. The official liquidator has also annexed as annexure 4 to his counter, a letter delivered by hand dated December 15, 1998, in which the owner of M/s. Umrao Steels namely, Umkar Nath has made a complaint that on December 15, 1998, when he had gone for inspection of the site the security staff had told him that one person who disclosed his name as Manoj Kumar Mishra was removing the tins from the tin shed. When objected he had stated that he has purchased the lot. It was, therefore, brought to the notice of the official liquidator that the tin-sheets were being stolen from the site and the same be stopped immediately. It is apparent therefore that there is dispute as to who was removing the tin-sheets. From the blank sheet of paper which has been filed as annexure 3 along with the envelope, it would appear from the creases that the same could be contained in the envelope. The blank paper bears the stamp of the office of the official liquidator and the date January 5, 1999. I, therefore, see no reason to disbelieve the statement made in the affidavit of the official liquidator that no complaint was received from the security guard and a blank sheet was sent in the envelope with ulterior motive. It is also surprising how the copy of the letter came in the hands of the applicants-- Mishra and Ansari who have given the date and the postal registration number in their affidavit. Annexure 1, therefore, filed along with the applications (A-20) and (A-21) appears to be very suspicious and cannot be relied upon.
6. There is another aspect of the matter. The highest offer of the purchaser was accepted and he had purchased both the land as well as the factory. He was given one month's time to make payment of 25 per cent. of the sale consideration. However, he has deposited almost the entire amount of the sale consideration except a sum of Rs. 8,50,000 within one month and the balance on January 18, 1999. What was the necessity for removing the tin-sheets worth Rs. 3 lakhs only. The allegation does not appear to be believable.
7. Shri R.P. Agrawal, learned counsel appearing for the purchaser M/s. Umrao Steels has strongly contended that the allegations were false and baseless and have been made mala fide due to rivalry. He has also contended that the applicant Mishra had neither inspected the property nor submitted any tender on the date when the same was opened in the chambers. An oral request was made on his behalf that he may be permitted to submit his tender but the request was orally rejected by the court on the objections raised by the representatives of the secured creditors as well as the other parties who had submitted their offers earlier. Consequently, it was contended that the said applicant Mishra had no locus standi to raise any objections. Similarly, it was contended that the applicant Asif Ansari whose offer was only for lot No. 2 and rejected by the court has no locus standi to seek cancellation of the sale.
8. Having heard learned counsel for the parties, the court finds force in the submission made on behalf of the purchaser and the official liquidator. The applicant Mishra had neither inspected the property nor submitted any tender within the time fixed. The tender of Asif Ansari for lot No. 2 alone was not accepted and his earnest money was returned to him, which he took without any protest. There appears to be substance in the submissions that the present objections were motivated as the applicants having failed to get their bid accepted were interested in raising obstacles in the way of the purchaser who had deposited the entire sale consideration within six weeks of the date of the order.
9. Learned counsel for the applicant Mishra has, however, filed a supplementary affidavit in court today and submitted that he has already filed a F.I.R. against the owners of M/s. Umrao Steels and the matter is being investigated by the police. He has also contended that he was prepared to deposit Rs. 1.40 crores and the property may be sold to him after cancelling the order passed in favour of the purchaser. The said submission is misconceived. Firstly, because the applicant had no locus standi as he had not filed any tender within time and his request to file the same when other tenders were being opened was rejected by the court and he had withdrawn himself from the tender. That apart just because the applicant wants to give a higher offer at this stage when the highest offer had already been accepted, the said offer cannot be considered at this stage. A similar argument, which is being sought to be raised by the applicant regarding subsequent higher offer was raised before this court in the case of Burakia Brothers v. Saraya Steel Limited [1998] 92 Comp Cas 192, This court having considered a large number of authorities of different High Courts and the Supreme Court had rejected the said argument. In this case, the court had already found that the consideration of Rs. 1.20 crores was adequate. There was no irregularity or fraud in the conduct of the sale. Consequently, the highest bid, which has been accepted, cannot be disturbed merely because a party seeks to offer something more.
10. Therefore, I find force in the submissions that the present applications have been filed with ulterior and mala fide motive. Consequently, the applications (A-20) and (A-21) are rejected accordingly.