KOSTUB INVESTMENTS LIMITED Vs. REINZ TALBROS LIMITED

JUDGEMENT

(1.) The O.L. was appointed as Provisional Liquidator in this case on 25th February 2002. This is an application filed by the Ex. Managing Director of the Company for seeking, inter-alia, the relief of setting aside the sale of the property of the Company in liquidation, which has been confirmed by this court, following the invitation of bids and consequent upon auction held in court in the presence of the Ex. Directors. Vide order dated 25.1.2007 on report 93/2006, this court appointed Mr. M.L. Gupta and Associates as the valuer of, inter-alia, property No.B-8, Site B, Surajpur Industrial Area, Greater Noida, UP (Surajpur Property).

(2.) The valuation report of the valuer appointed by this Court was called for to value the company's property situated at B-8, Surajpur Industrial Area, Greater Noida, UP (Surajpur property). This was brought on record. As per this valuation report the Surajpur property was valued at Rs.5,49,64,000/-. The applicant filed CA No.666/2007 for setting aside the order dated 25.2.2002 whereby the Provisional Official Liquidator was appointed. This application was listed before the court on the judicial side on 11.7.2007. Notice was issued on the application and time was granted to the non-applicants for filing their replies.

(3.) The first submission of the applicant is that the valuation of about Rs.5.55 crore done by the valuer M/s M.L. Gupta and Associates is far below the market price. The applicant claimes that the present value of the property is about Rs.13 crores as per report made by M/s Chadha and Associates, a valuer on the panel prepared by this Court. He also states that the valuation done by M/s. M.L. Gupta and Associates is lower than even the circle rate. The next submission of the applicant is that the official liquidator was appointed as the provisional liquidator and he could not have sold the property in auction since the property did not vest in him. He could not have transferred the title to the property in favour of the auction purchaser. The third submission of the applicant is that there was a stay granted by the Allahabad High Court against the disposal of the assets of the company, i.e., the factory, including fixed assets and material in the factory without the leave of the single Judge of that Court, in Special Leave No.889/2002 titled M/s Reinz Talbros Ltd. vs. Deputy Labour Commissioner, Gautam Budh Nagar and Ors. He also relied on Allahabad Bank vs. Bengal Paper Mills Co. Limited, (1999) 4 SCC 383 to submit that the interest of the creditors is paramount and the court should ensure that the best price is fetched for the property belonging to the company that is sold by the court. He relied on Union Bank of India vs. Official Liquidator H.C. Of Calcutta, (2000) 5 SCC 274 to state that it is the obligation of the court to ensure that the valuation report brings out the market value of the property that is proposed to be sold, even if no objections are raised to such valuation.