KEDAR ROUT Vs. SRICHARAN DAS

JUDGEMENT

(1.) These two Letters Patent Appeals are directed against a composite order passed by learned company Judge in Misc. Cases Nos. 74 of 1989 and 27 of 1990 refusing to exercise power under Rule 9 of the Companies (Court) Rules, 1959 and set aside order dated 17-7-89 passed by him in Company Act Case No. 2 of 1975 confirming sale of 6,100 equity shares of Rs. 100/- each of M/s. Kalinga Sevenska Limited in favour of one Sricharan Das (respondent No. 1 in both the appeals).

(2.) For proper appreciation, the relevant facts as admitted at the hearing may be stated in brief. Kalinga Industries Limited, a company incorporated under the Companies Act, 1956, came under liquidation in 1976. One of the assets of the company was 6,100 equity shares having face value of Rs. 100/- each of M/s. Kalinga Sevenska Limited. Through public advertisement, sealed tenders were invited for sale of the aforesaid shares. The sealed tenders were opened on 27-7-88. Highest offer was by Nilasaila Nayak at Rs. 114/per share followed by A. P. Singh at Rs. 111/-, Kedar Rout (appellant in A.H.O. No. 82 of 1993) at Rs.101/-, Pradipta Mohanty (appellant in A.H.O. No. 84 of 1993) at Rs.85/- and Sricharan Das at Rs. 57.19 per share. Kedar Rout had offered to purchase 5,000 equity shares. At the first instance, the offer of Nilasaila Nayak, the highest bidder was accepted by the learned Company Judge on 1-8-88, but as he failed to deposit the consideration within the stipulated period, the learned Company Judge by his order dated 16-9-88 directed acceptance of the offer of the second highest bidder A. P. Singh. After receiving the order of acceptance, A. P. Singh died and the learned Company Judge by order dated 7-2-89 permitted his son to deposit the entire value of all the shares by a specified date. The son failed to comply. Meanwhile on 6-2-89 Sricharan Das (the 6th highest bidder) had filed an application before the official Liquidator mentioning therein that he has come to understand that the second highest bidder has offered to purchase the shares at Rs. 111/- per share and he offered to purchase the shares at Rs. 114/- per share, which was the price offered by the highest bidder. Mentioning the fact that the second highest bidder did not comply and deposit the price and that Sricharan Das offered to purchase at Rs. 114/per share, the file was put up before the learned Company Judge who on 30-5-89 passed the following order :

(3.) On 28-7-89 Pradipta Mohanty, the fourth highest bidder filed Misc. Case No. 62 of 1989 praying for setting aside the order of acceptance of offer of a person below him. On 7-8-89, the learned company Judge while justifying acceptance of the offer of Sricharan Das rejected the Misc. Case on the ground that Sricharan has deposited the entire value at the above rate (Rs.114/-) and after due verification the sale was confirmed on 17-7-89. Thus there is no question of setting aside the order of acceptance of the offer of Sricharan Das at this 'stage'. Thereafter, on 10-8-89, Pradipta Mohanty filed Misc. case No. 74 of 1989 praying for setting aside the order confirming the sale on the ground that his offer being higher than that of Sricharan, it was incumbent upon the Official Liquidator to negotiate with him and others to ensure receipt of best price.