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14. It has been emphasized that application is mala fide as the member of the Core Group Mr. B.S. Baidwan has been keeping a watch over the proceedings and was well aware of auction. It has been maintained that the course adopted by the intervener is a deliberate attempt to interfere in the vested rights of the auction purchaser and to cause further delay in finalisation of the sale to the prejudice of secured creditors and the workmen. It is conceded, however, that this court is not functus officio but it must see whether in the given facts and circumstances a confirmed sale, as in this case the sale confirmed on 10.12.2004, should be set aside especially when possession has already been delivered and various steps to the detriment of the auction purchaser have been taken. Learned counsel has made a reference to the loan advanced against the land and the building by the Canara Bank as well as by State Bank of Patiala. He has also referred to the undertaking creating mortgage in their favour. Placing reliance on a judgment of the Supreme Court in Divya Manufacturing Company Pvt. Ltd. v. Union Bank of India and Ors., (2000-3)126 P.L.R. 369 (S.C.):(2000)6 S.C.C. 69 learned counsel has argued that no new bidder like the intervener should have been permitted to participate in the auction and the application is liable to be dismissed. Dr. Singhvi has further submitted that the usual clause in the terms and conditions like the one found incorporated in the terms and conditions concerning the case Divya Manufacturing Company (supra) which empowered the Court to set aside the sale, even after it is confirmed is conspicuously absent from the sale notice which further shows that the sale by the Official Liquidator or by this Court was not even subject to confirmation.

15. Mr. Vivek Bhandari, learned counsel appearing for the intervener has argued that basic principle underlying the proceedings for winding up of the company in liquidation is to achieve optimum welfare of the creditors and to ensure that the maximum price is received by the PUNWIRE. Learned counsel has made a reference to the judgment of the Supreme Court in the case of Union Bank of India v. Official Liquidator H.C. of Calcutta and Ors., A.I.R. 2000 S.C. 3642:(2000)5 S.C.C. 274 and has argued that judgment of the Supreme Court in Kayjay Industries (P) Ltd.'s case (supra) and Navalkha & Sons's case (supra), on which reliance has been placed by Dr. Abhisek M. Singhvi, have been considered and the argument that mere inadequacy of price cannot constitute the basis for setting aside the confirmed sale has been specifically rejected. Mr. Bhandari has drawn my attention to paragraphs 17 and 18 of the judgment. According to Mr. Bhandari it is the duty of the Official Liquidator to make all efforts to realise best possible price from the sale of assets and properties of PUNWIRE because this is an obligation to the creditors of the company. Learned counsel has placed reliance on paragraph 21 of the judgment of the Supreme Court in the case of Allahabad Bank and Ors. v. Bengal Paper Mills Co. Ltd. and Ors., A.I.R. 1999 S.C. 1715:(1999)4 S.C.C. 383 and argued that whatever equitable rights might have arisen in favour of the auction purchaser have been off set by the interest of PUNWIRE, its secured, unsecured creditors and the workmen. The expenditure incurred by the auction purchaser in the form of interest etc. is insignificant in the face of the interest of the secured, unsecured creditors as well as its workmen. Learned counsel has drawn my pointed attention to the observations made by the Supreme Court in paragraphs 21, 23, 24 and 25 of the judgment in Allahabad Bank's case (supra). Mr. Bhandari has stated at the bar after obtaining instructions from Major General Amar Singh Sehgal, Director that the intervener is prepared to compensate to the extent of interest and litigation charges which might have been incurred by the auction purchaser. Mr. Bhandari has then made submission based on the judgment of the Supreme Court in Divya Manufacturing Company (P) Ltd.'s case (supra) and argued that it is the primary duty of the Court to see that the price fetched at the auction is adequate price even though there is no suggestion of irregularity or fraud. Referring to the argument raised in paragraph 9 of the judgment which is to the effect that after the sale is confirmed, subsequent higher offer cannot constitute a valid ground for setting it aside learned counsel has submitted that the aforementioned argument was specifically rejected. Learned counsel has placed reliance on paragraphs 13 and 16 of the judgment. Mr. Bhandari has also placed reliance on another judgment of the Supreme Court in the case of LICA (P) Ltd. v. Official Liquidator, (1996)85 Company Cases 792 [788] to buttress his stand that the purpose of open auction is to fetch most remunerated price and its duty to keep openess of the auction so that the intending bidders are free to participate and offer higher value. It has been emphasized that if the path is out down, the possibility of fraud or to secure the best price would be a mirage. Mr. Bhandari has refuted the argument advanced on behalf of the auction purchaser that the omission to incorporate the terms and conditions that the sale would be subject to confirmation of the Court is not intentional but an inadvertent act. According to him, it would not mean that this Court has no power to confirm the sale. Learned counsel has made a reference Rule 9 of the Rules and Section 457 of the Act to argue that omission to incorporate such a clause would not result into replacing Section 457 of the Act which postulates power of the liquidator who acts subject to the control of the court. The Official Liquidator through the Court is the custodian of the property of the Company. Mr. Bhandari has made an offer after obtaining instructions that for all the three lots the intervener is prepared to purchase the same in lump sum of Rs. 3.75 crores as against the confirmed rate of Rs. 3.36 crores in favour of the auction purchaser. The difference in both the bids is about Rs. 39 lacs.

25......The second respondent knew that the appeals were pending. It should have appreciated that the order of sale was very vulnerable, given what the Division Bench of the High Court had to say about it. It consciously took the risk of incurring the expenditure and obligations and it cannot take shelter behind him."

25. The judgment in the case of Divya Manufacturing Company (P) Ltd., (supra) has clarified any doubt about setting side a sale even after confirmation holding that a subsequent higher offer can constitute a valid ground for doing so. In that case, the sale was confirmed for price of Rs. 1.30 crores but subsequently before possession of the property could be handed over or sale deed could be executed in favour of the auction purchaser, some interveners came and pointed out that the assets of the Company could fetch Rs. 2 crores. Both the interveners deposited Rs. 40 lacs each and also undertook to pay damages to the auction purchaser. The Division Bench of the High Court after taking into consideration all the relevant facts, ordered resale of the assets of the Company. The order of the Division Bench was upheld by the Supreme Court after referring to the judgments in Navalkha and Sons case (supra) and LICA (P) Ltd. (1) and LICA (P) Ltd. (2) (supra). Relying and explaining various earlier judgments of the Supreme Court, it was held as under:-

31. The argument of Dr. Singhvi, learned counsel for the auction purchase that inadequacy of price can not be considered as a basis for setting aside the confirmed bid or that there should be some element of perversity or unfairness in conducting the auction, in view of the law laid down in various paragraphs quoted from the judgment of the Hon'ble Supreme court in the case of Union Bank of India's case (supra), Divya Manufacturing Company (P) Ltd.'s case (supra) and Allahabad Bank's case (supra), can no: be accepted. It is true that the reserve price and the price according to the valuation re-port are less than the price offered by the auction purchaser but it appears to be equaly true that the land and the building price of Lot No. 17 is worth much more as the difference is huge.