SARAN ENGINEERING COMPANY LTD Vs. STATE OF ALLAHABAD

JUDGEMENT

(1.) By order dated 9-2-2000, the offer of Sri Prem Mohan Singh to purchase movable and immovable assets of the company (in liquidation) for a total amount of Rs. 1,50,00,000 was accepted, and the payment was directed to be made as suggested in paragraph 9 of the affidavit of Sri Prem Mohan Singh supporting the application. It was directed that the possession be given by the liquidator to the intending purchaser as soon as five per cent of the sale consideration is deposited and the first quarterly instalment is paid to the liquidator, and the bank guarantee for the remaining amount is furnished to the Official Liquidator and the Official Liquidator was directed to inform the court whether the remaining instalments have been paid on due date or not. On 20-10-2000, a notice was directed to be issued to Sri Prem Mohan Singh by registered post to show cause by 10-11-2000 as to why the earnest money of Rs. 7,50,000, deposited by him be not forfeited, as he had not complied with the terms of deposit. An application dated 10-11-2000 was filed with affidavit giving reasons as to why the applicant was not able to make balance payment. These reasons included the serious local law and order problems and the willingness of the bank to process the loan application of the applicant. The applicant had already paid earnest money of Rs. 7,50,000 and was required to pay balance amount of Rs. 1,42,50,000. He had been permitted to deposit entire amount in two equal quarterly instalments, the last of which was in December, 2000.

(2.) The Court considered his application and having regard to the facts and circumstances and after hearing Official Liquidator permitted the applicant to deposit the entire balance or sale consideration by 31-3-2001. It was clearly recorded in the order that if the amount is not deposited by the date fixed, Sri Prem Mohan Singh has agreed that interest may be charged on the balance remaining on simple interest at the rate of 12 per cent for the period for which the amount remained unpaid. This condition was to be subject to the deposit of at least one-third of the balance amount by 31-3-2001. It was directed that if the said one-third amount is not deposited by 31-3-2001, the earnest money will stand forfeited and the property will be re-advertised for sale. If one-third [amount] is deposited by 31-3-2001, the remaining amount was provided to be deposited in two equal instalments,--first of this was on or before 30-6-2001, and the second instalment was to be deposited on or before 30-9-2001. Interest due was directed to be deposited with last instalment and it was clarified that the interest will be calculated with effect from 1-1-2001.

(3.) Sri Prem Mohan Singh did not avail, the options either by depositing entire amount falling due on 31-3-2001, or instalments falling due on 30-6-2001, and 30-9-2001, along with interest of 12 per cent with effect from 1-1-2001. He moved an application on 2-5-2001 giving reasons due to which he could not deposit the amount. On this, the Court gave a last opportunity to him to deposit within 15 days one-third of the balance sale consideration along with 12 per cent p.a. simple interest on the unpaid amount calculated from 1-10-2001, that is, the last date for deposit of the first of the two original instalments. Time was thus granted upto 18-5-2001 to the purchaser for depositing one-third of balance sale consideration plus 12 per cent of interest on unpaid amount calculated from 1-10-2000 till the date of deposit to the Official Liquidator. It was made clear that if the amount is not paid, the earnest money shall stand forfeited and the property will be re-advertised for sale. It was directed that if the one-third amount is deposited by 18-5-2001, the remaining amount will be deposited with interest @ 12 per cent on the remaining unpaid amount from the date of deposit of the first instalment till the date of deposit in two equal five monthly instalments to be paid on or before 18-7-2001 and 18-9-2001. Other prayers were directed to be considered after the applicant showed his bona fides by depositing the one-third amount with an interest within 15 days.