SARAF PAPERMILLS LTD Vs. STATE OF DELHI

JUDGEMENT

(1.) BY this order I propose to dispose of CA No. 1185/2006 (preferred by m/s Indocap Pvt. Ltd. for enhancement of the bid price to Rs. 4. 10 crores for the land and building), CA No. 1449/2006 (preferred by IDBI for disbursement of the amount lying with the Official Liquidator), CA No. 554/2007 (preferred by M/s Surya Finvest P. Ltd. for enhancement of the bid price to Rs. 4. 50 crores for the land and building) and C. A. No. 698/2007 (preferred by Industrial Finance Corporation of India Ltd. [ifci Ltd. ]) to set aside the auction dated 04. 11. 2004 in favour of Gagan Educational Society in respect of the land and building of the company in liquidation admeasuring 35 acres and having built up area of about 79,658. 75 sq. ft situated at M. I. A extension, Delhi-Alwar Road, Alwar (Rajasthan ). , Brief facts leading to the filing of these applications are as follows:

(2.) M/s Saraf Paper Mills Ltd. was ordered to be wound up by this Court on 20. 05. 1994 in C. P. No. 201/1990 and the official liquidator attached to this Court was appointed as its liquidator. The effort to sell the property of the company in liquidation consisting of the plant and machinery, and factory premises i. e. the land and building of the company in liquidation situated at MIA Extension, Delhi-Alwar Road, Alwar, Rajasthan started in june, 1997. As per the initial valuation report, the aforesaid properties were valued at about Rs. 2. 97 Crores by the valuer Lt. Col. R. K. Kohli vide report dated 01. 02. 1997. The effort to sell the property through a sale proclamation did not fructify. On 04. 09. 1998 the Court directed the sale of plant and machinery separately from the land and building. The plant and machinery was disposed of for Rs. 33. 50 Lacs and the sale confirmed on 04. 11. 1999. On 13. 12. 2001 the Court fixed the reserve price of the land and building at Rs. 2. 70 Crores on the basis of valuation of Rs. 1. 84 Crores for the land, and Rs. 88 Lacs for the building. Sale proclamation was issued. However, it appears no offers were received. On 26. 07. 2002 the Court directed issuance of a fresh sale proclamation fixing the value of the land and building at Rs. 2. 71 Crores and the reserve price of the land and building at Rs. 1. 60 Crores. From the sale proclamation stated to have been issued on 7. 10. 2002, filed on record by the Official Liquidator, it appears that the said proclamation stated the extent of land as 1,41,610 sq mts. "situated at Delhi, Alwar, Rajasthan". The extent of the built up factory was however, not disclosed' in this proclamation. On 07. 08. 2003 the secured creditors, namely, IDBI, IFCI and icici asked that a fresh sale proclamation be issued. The Court directed the said secured creditors to take necessary steps to get the publication effected in various newspapers. Pursuant to the sale proclamation only two tenders were received which were way below the reserve price. The tender was, accordingly, cancelled on 27. 11. 2003 and the Court directed initiation of fresh sale process by issuance of a fresh sale proclamation. On 22. 04. 2004 the Court directed that a fresh valuation to be made since the valuation was quite old. Accordingly, a fresh valuation report dated 14. 08. 2004 was received. This was prepared by the same valuer Lt. Col. R. K. Kohli. Surprisingly, despite the passage of considerable length of time and contrary to the general trend, where one sees appreciation in real estate prices, the valuer valued the land at only Rs. 87. 50 lacs and the building at Rs. 32,12,820/- at the highest. The following "note" was appended by the valuer "note: 1. If the buildings cannot be utilized by the purchaser economically and for the purpose as desired, he has to demolish these buildings and in that event the values of the structure will be only 40% of the above i. e. Rs. 32,12,812/-x40/100 = Rs. 12. 84. 960/- say Rs. 12,85,000/ -. " On 26. 08. 2004, the court directed issuance of a fresh sale proclamation in "the Statesman" (English) and "rajasthan Patrika" (Hindi) by fixing the reserve price at 60% of the aforesaid valuation and fixed the earnest money deposit at 10% of the said valuation. The sale proclamation stated to have been issued by the official Liquidator on 4. 10. 2004 in the English Daily has been placed on record upon the direction of the Court. However, it appears that no sale proclamation was published in the Hindi "rajasthan Patrika" as directed by the Court.

(3.) PURSUANT to the said sale proclamation, 6 bids were received including that of Gagan Educational Society (in short 'ges' ). GES gave ah offer of Rs. 90 Lacs. On 04. 11. 2004 inter se bidding was held between the 6 bidders and ges raised its offer to Rs. 1. 30 Crores. GES deposited the aforesaid amount of Rs. 1. 30 Crores. However, it appears that there was some difficulty faced in delivering possession of the land and building to GES by the O. L. on account of encroachment. While that aspect was being looked into by the court, M/s Synergy Steels Limited filed CA No. 1063/2005 by making an offer to purchase the said land and building for Rs. 1. 35 Crores. However, on 11. 08. 2005, the Court observed that "the offer made is not substantially higher to consider fresh auction". M/s Synergy Steels Limited, therefore, withdrew the application with liberty to make a fresh offer of higher amount.