VIJAY KUMAR MUNDHRA Vs. GLOBE MOTORS LIMITED

JUDGEMENT

(1.) This appeal is directed against the order of the Company Judge dated May 2, 1979, directing the official liquidator to accept the bid of Star Wires (India) Ltd. for the sale of the Steel Division of Globe Motors Ltd.

(2.) The appeal is by Shri V.K. Mundhra, who claims to be the largest share-holder and creditor of the Company. He is also the propounder of the scheme which failed to work satisfactorily resulting into the winding up order with regard to the Company being made on 15th of April 1979. Mr. G.L. Sanghi, Sr. Advocate, appearing for Mr. Mundhra has objected to the auction-sale. See Navlakha and sons v. Sri Ramanva Das and others, A.I.R. 1970 S.C. 2037.

(3.) The official Liquidator and the auction-purchaser strongly countered these submissions. It is submitted on their behalf that the Company Court had initially invited sealed tenders by advertising the same very widely. The highest tender was for Rs. 88,88,888.00 . Running a steel plant requires a special expertise and an experience in the field. Eight people filed in the tenders and deposited a sum of Rs. One Lac each. Mr. Mundhra did not fill in the tender. The learned Company Judge wanted to further explore whether the steel plant would fetch higher price and, therefore, held prolonged consultations with the original tenderers and with the major creditors of the company. The learned Company Judge rightly resorted to further bidding amongst the said tenderers who along had shown interest in buying the plant. The final bid was made by the Star Wires India Ltd. for Rs. 1,55,55,555.55. This price was almost double of the highest price quoted by the tenderers. It is further submitted that the Company Judge followed this procedure in the interest of the Company and he was fully competent to do so under Rule 273 of the Companies (Court) Rules 1959. It is then submitted that during the relevant period, Mr. Mundhra was directed to be present before the Liquidator for proceedings under Section 477 but he absconded and the Company Court had to issue a non-bailable warrant against Mr. Mundhra. Mr. Mundhra was keeping in touch with. the auction proceedings through his friend and associate Mr. K.N. Aggarwal. Mr. Aggarwal had informed the Company Court that he had no customer for a higher price. It is submitted that, in these circumstances, Mr. Mundhra's complaint that he was not consulted or that the price was inadequate, has no substance.