MAN MOHAN MITRA Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) This appeal has been filed against the order dated August 17, 2004, by which the learned company judge rejected the application of the appellants to recall the order dated April 15, 2004, by which the bid of respondent No. 2 was accepted with certain conditions.

(2.) The facts and circumstances giving rise to this appeal are that winding up proceedings are pending before the company judge. The advertisement was issued in four newspapers, i.e., Times of India, Economic Times, Dainik Jagaran and Amar Ujala fixing the date for sale of the assets of the company, of which the present appellants are the ex-directors. In response to the said advertisement, four tenders had been received by the court. Learned counsel for the parties were heard before the proceedings of auction etc. started and it was agreed that the property should not be sold for a sum less than Rs. 2 crores. Respondent No. 2 had been the highest bidder for a sum of Rs. 2.25 crores. The said offer was accepted tentatively vide order dated April 15, 2004, taking into consideration the report of the valuation, etc. The sale was made conditional that it would be confirmed if there is no offer by any other buyer for one and-a-half times of the amount offered by respondent No. 2, i.e., a sum of Rs. 3,47,50,000. The court further gave opportunity to the secured creditors to bring any buyer for the said amount. As nobody turned up and a period of one month was over the court passed the order to execute the sale deed in favour of the said respondent and hand over the possession of the premises in dispute. After expiry of about four months, the application was filed to recall the said order dated April 15, 2004, on the ground that it had been sold on a much lesser price, which was rejected vide impugned order dated August 18, 2004. Hence this appeal.

(3.) Shri Yashwant Verma, learned counsel appearing for the appellants has submitted that the bid of respondent No. 2 for a sum of Rs. 2.5 crores is a distress sale and not the price of the property. The property can definitely fetch a much higher price. Therefore, the learned company judge has erred in not allowing the application recalling the order dated April 15, 2004. Therefore, the appeal deserves to be allowed.