BURAKIA BROTHERS Vs. SARAYA STEEL LIMITED

JUDGEMENT

(1.) Company Application No. A-31 has been filed by Jalan Iron and Steel Co. (hereinafter referred to as the "applicant-objector"), praying for setting aside the offer of Chauri Chaura Steels Ltd. and to accept the offer of the applicant. Application No. A-33 has been filed by Chauri Chaura Steels Ltd, (hereinafter referred to as the "proposed purchaser") praying that necessary directions be given to the official liquidator to hand over possession of the properties of Saraya Steel Ltd. (in liquidation) after accepting the payment of the balance, amount of the sale consideration due for payment on June 21, 1997.

(2.) The relevant facts in brief are that Saraya Steel Ltd. (company in liquidation) was ordered to be wound up on a petition filed by four petitioning creditors vide order dated November 11, 1994. On a report by the official liquidator, this court vide order dated January 10, 1997, directed the movable and immovable assets of the company (in liquidation) to be sold jointly along with the State Bank of India, which was one of the secured creditors of the company, by inviting sealed tenders on the terms and conditions to be settled by the official liquidator, after giving due publicity in the following newspapers :

(3.) The notices were duly published in the aforesaid newspapers and the journal. In pursuance thereof, inspection of the assets were made by 15 prospective buyers on March 14 and 15, 1997. However, only three tenders were received of which the offer of Chauri Chaura Steels Ltd. of Rs. 94 lakhs for the entire lots Nos. 1 to 10 was the highest. As in the said offer the party had also indicated that they were prepared to negotiate and increase their offer, when asked to do so and they increased their offer to Rs. 1 crore 5 lakhs. The court accepted the said offer and permitted the said party on their request to deposit the balance amount in three equal monthly instalments after adjusting the amount paid as earnest money. It further directed that on the deposit of the entire amount further orders regarding the confirmation of sale shall be passed, Before the instalments could be deposited, the present Application No. A-31 was filed on behalf of the applicant Jalan Iron and Steel Co. for setting aside the said offer and accepting the offer of Rs. 1 crore 10 lakhs, which was now being made by the applicant. The said application has been opposed on behalf of the proposed purchaser Chauri Chaura Steels Ltd. and the official liquidator.