PUNJAB WIRELESS SYSTEMS LIMITED (IN LIQUIDATION) THROUGH THE OFFICIAL LIQUIDATOR Vs. THE INDIAN OVERSEAS BANK AND ORS.

JUDGEMENT

(1.) This order shall dispose of numerous applications filed in C.P. No. 226 of 1999 which include CA 650 of 2004, 18, 28, 72, 94, 185 and 228 and 2.005. All these applications have been filed in respect of confirmation, higher bid and other related issues connected with the sale of assets of the company in liquidation, namely, the Punjab Wireless Systems Limited (for brevity. 'PUNWIRE').

(2.) The background facts are necessary to provide proper perspective and focus to the controversy raised in these applications. The company in liquidation, namely, PUN -WIRE had been running into rough weather which resulted in filing a winding up petition in this Court being C.P. No. 226 of 1999 under Ss. 433 and 434 of the Companies Act, 1956 (for brevity, 'the Act'). The aforementioned petition was allowed on 1.2.2001 and the Official Liquidator was appointed the liquidator. It is pertinent to mention that before passing order dated 1.2.2001 for winding up the PUNWIRE finally, this Court had appointed a provisional liquidator vide its order dated 27.7.2000 passed in CA No. 705 of 1999. After the order of winding up, the Official Liquidator filed CA. No. 775 of 2003 for permission to sell the assets and properties of the PUNWIRE. The aforementioned CA No. 775 of 2003 was allowed by accepting the prayer of the Official Liquidator to sell the assets and properties of the PUNWIRE vide order dated 4.1.2003. Thereafter, a sale committee was constituted to work out the modalities for auctioning of the properties of the PUNWIRE which comprised of the Official Liquidator and representatives of the secured creditors. It was decided that the auction of the assets and properties of PUNWIRE was to be conducted by inviting sealed tenders in the office of Official Liquidator by creating separate lots as prepared by the sale committee. Accordingly, a tender notice was floated on 15.6.2004 which was published on 25.6.2004 in various leading newspapers, namely. The Economic Times (All India Edition), Times of India (All India edition) The Tribune (All edition), Punjab Kesri (Hindi), Ambala, Delhi and Jalandhar Editions and Jagbani (Punjabi), Jalandhar edition. According to the tender notice, the properties and assets of PUNWIRE were bifurcated in 25 lots. The reserve price of each lot along with earnest money in respect thereof have been specified. The tender further pointed out the date of inspection, last date of receipt of tenders upto 11.00 A.M. and date of opening of tenders on the same day at 1.00 P.M.. The tenderer was required to submit separate tender for each lot along with earnest money through Bank Draft in favour of the Official Liquidator's account Punjab Wireless Systems Limited payable at Chandigarh. The Official Liquidator and the committee was given the power to reject any offer without assigning any reason if it thought fit, it could allow inter se bidding amongst participating bidders. The sale was of course subject to the confirmation by this Court. According to Clause 13 of the terms and conditions of the tender notice, the bid for complete factory premises or all assets at B -53, B -55, B -76 and B -77 was to be preferred for which earnest money required to be deposited was Rs. 2 Crore and reserve price kept was Rs. 25 crores. One of the tenderers was M/s Winsome Yarns Ltd. (for brevity, 'the auction purchaser' for lot No. 17 (consisting of land and building) Lot No. 19 (consisting of furniture) and lot No. 20 (consisting of air conditioners). The other bidders were M/s Star Point Financial Services Ltd. and M/s S.K. Khaitan and Company for Lot No. 17. The Official Liquidator along with the sale committee opened the tenders on 26.7.2004 and 28.7.2004 in the presence of all the members of the sale committee and various representatives of the tenderers. In respect of Lot No. 17 which was for B -77, Industrial Area, Phase VII, S.A.S. Nagar (Mohali), the auction purchaser had offered Rs. 3.15 crore for the land and building. The sale committee comprised of the Official Liquidator and representatives of the secured creditors decided that since no tender had been received for machinery, it would be difficult to sell the land of this building because the machines would be required to be shifted to another premises which may result into damage to those machines. This tender was opened on 27.7.2004. However, the decision was deferred by retaining the offer of the auction purchaser for some time so as to take a decision after looking into other tenders in respect of furniture and fixtures and other miscellaneous items. On 28.7.2004, the tender in respect of Lot Nos. 19 and 20 comprised of furniture and air conditioners respectively was opened. The auction purchaser had offered Rs. 4.50 lacs for lot No. 19 against the reserve price of Rs. 4 lacs and the sale committee expressed the opinion for moving appropriate application for consideration of this Court. The other tenders in respect of this lot, namely Rajdhani Cables (India) were not found qualified as no negotiable instrument of any cash showing the payment of earnest money was attached. For lot No. 20 comprised of air conditioners again the auction purchaser had offered Rs. 15.50 lacs on the condition that lot No. 17 is also sold to it at a price offered by it. The sale committee expressed the opinion to send an invitation for offer to the auction purchaser for lot Nos. 17, 18, 19 and 20 asking it to offer at least Rs. 5 crore. It was also agreed to mention in the letter that it could come forward for further negotiations if so desired.

(3.) The Official Liquidator on 30.9.2004 filed CA No. 650 of 2004 under Sec. 455 of the Act read with Rule 6 and 9 of the Companies (Court) Rules, 1959 (for brevity, 'the Rules') in which prayer was made that the following prospective bidders may be called upon for inter se bidding in the Court in respect of land and building comprised in the premises marked as B -77, Phase VII, Mohali, Lot No. 17: -