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Manu Tiling Co.P.Ltd. vs Patel Phoschem P.Ltd.. on 18 February, 2015

Bench: T.S. Thakur, Rohinton Fali Nariman, Prafulla C. Pant

                                                    1

         ITEM NO.3                          COURT NO.2                 SECTION IX
                                   S U P R E M E C O U R T O F      I N D I A
                                           RECORD OF PROCEEDINGS

         Petition(s) for Special Leave to Appeal (C)               No(s).   28790/2012

         (Arising out of impugned final judgment and order dated 27/08/2012
         in OJA No. 1/2008,27/08/2012 in OLR No. 93/2007 passed by the High
         Court Of Gujarat At Ahmedabad)

         MANU TILING CO.P.LTD.                                           Petitioner(s)

                                                    VERSUS

         PATEL PHOSCHEM P.LTD.& ORS.                                     Respondent(s)

         (interim relief and office report) (For Final Disposal)

         Date : 18/02/2015 This petition was called on for hearing today.

         CORAM :
                             HON'BLE MR. JUSTICE T.S. THAKUR
                             HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN
                             HON'BLE MR. JUSTICE PRAFULLA C. PANT

         For Petitioner(s)             Mr. Dhruv Mehta,Sr.Adv.
                                       Mr. Rishi Malhotra,Adv.

         For Respondent(s)             Mr. Awadhesh Kumar Singh,Adv.
                                       Mr. Abhinav Kislay,Adv.
                                       Mr. R. D. Upadhyay,Adv.

                                       Mr. Ravindra Kumar,Adv.

                              UPON hearing the counsel the Court made the following
                                                 O R D E R

Heard.

This special leave petition arises out of an order dated 27th August, 2012 passed by the High Court of Gujarat at Ahmedabad whereby O.J. Appeal No.1 of 2008 along with Company Application No.4 of 2008 filed by respondent no.1 herein has been allowed, the petitioner's bid rejected and the sale confirmed in favour of the first respondent for a sum of Rs.2.7 cores.

It is unnecessary to recapitulate the entire background in which the controversy arises for the same has been set out in our order dated 13th August, 2014. Suffice it to say that we had by  2 the said order noted that the offer of Rs.4,00,00,000/- (Rupees four crores) made by the petitioner-company was substantially higher than the amount of Rs.2.70 crores offered by respondent no.1 earlier before the High Court. We had in that view directed the official liquidator to invite fresh bids for the property in-question with a reserve price of Rupees Four Crores for the same. We are now informed by learned counsel for the parties that a fresh auction notice was issued by the official liquidator, pursuant whereto 11 bids in all were received by him. The petitioner was it appears the highest bidder even in the fresh offer at Rs.4.31 crores for the property in-question.

When the matter reached the company court at Ahmedabad at the instance of the official liquidator, the court appears to have given another opportunity to the bidders to revise their offers in the course of the proceedings before the High Court. While the petitioner did not revise its bid, M/s. Manibhadra Sales Corporation raised the bid to Rs.6,00,00,000/- (Rupees six crores). That position is evident from a copy of the order dated 13th October, 2014 passed by the company court who directed the valuation of the property also, apparently with a view to verifying whether the amount of Rs.6,00,00,000/- (Rupees six crores) offered by the highest bidder was in tune with the market value of the property in-question. The proceedings are still pending before the High Court as the valuation report has yet to be considered by the said court.

When the matter came up for hearing before us today, Mr. Dhruv Mehta, learned senior counsel appearing for the petitioner-company, submitted that he had instructions from the petitioner-company to argue that if M/s. Manibhadra Sales Corporation, the highest bidder, were to make good the bid offered by it, the amount deposited by the petitioner-company ought to be refunded back to it along with the interest accrued on the same besides a reasonable amount towards compensation. A similar submission was made even on behalf of the respondent no.1 who sought refund of the amount deposited by the said respondent  3 together with interest, in case the bid offered by M/s. Manibhadra Sales Corporation was accepted by the company court and the sale confirmed in its favour. It was in the alternative argued by Mr. Dhruv Mehta that should the offer made by M/s. Manibhadra Sales Corporation was to fail for any reason, the petitioner shall stand by the offer of Rs.4.31 crores made by it in which event the sale of the property in-question could be completed in its favour.

On behalf of the official liquidator, it was submitted that nothing much is left in the present proceedings for consideration by this Court inasmuch as the process of fresh bids having been completed and submitted before the High Court, the question of refund of the amount deposited or confirmation of the bids could be left to the High Court. It was submitted that in case by M/s. Manibhadra Sales Corporation was to emerge successful in its bid and the property sold in its favour, the High Court could make a suitable order for refund of the amounts deposited by the petitioner as well as respondent no.1-company with interest, if any accrued on the same.

There is, in our opinion, merit in the submission made by Mr. Ravindra Kumar, learned counsel for respondent no.2-Official Liquidator. The question whether the High Court was correct in confirming the sale in favour of respondent no.1, is on account of the subsequent developments mentioned above, rendered totally academic. That is particularly so because about Rs.2.7 crores offered by respondent no.1 stood revised before us at the instances of the petitioner-company to Rs.4,00,00,000/-. That being so, the question of confirming the bid in favour of the petitioner at the original price or Rs.2.7 crores does not obviously arise. It is also evident that the property in-question is now fetching something like Rs.6,00,00,000/- (Rupees Six Crores) offered by M/s. Manibhadra Sales Corporation. That process is obviously to be taken up to its logical conclusion before the High Court for which purpose we need to relegate the parties to the High Court for such orders as the High Court may deem fit and proper in the facts and circumstances of the case.

We accordingly dismiss this special leave petition reserving liberty for the petitioner as also respondent no.1 to seek refund of the amount deposited by them along with solatium/compensation, depending upon whether the offer made by M/s. Manibhadra Sales Corporation is accepted and made good by them. We make it clear that we have expressed no opinion on the prayer for refund of the amount, with or without interest and/or solatium/compensation claimed by the petitioner. No costs.

(MAHABIR SINGH)                                          (RENU DIWAN)
 COURT MASTER                                            COURT MASTER