STATE BANK OF INDORE Vs. PRASHANT JHUNJHUNWALA

JUDGEMENT

(1.) Matter has come upon misc. application (Inward-24680/dt.22/11/2010) filed by Respondent-1 (Prakash Jhunjhunwala) in Company Appeal-1/2009 U/r 9 of Company (Court) Rules, 1959, assailing proceedings initiated by Appellant Bank (secured creditor) regarding auction of immovable property (E-16, IPI Area, Electronics Complex, Kota) held on 22/09/2010; and seeking direction to the Appellant-Bank to hold auction proceedings afresh in accordance with procedure under Security Interest (Enforcement) Rules, 2002 ("Rules, 2002").

(2.) It is a matter of record that Appellant-Bank preferred company appeal Under Section 10-F of Indian Companies Act, 1956 ("Co. Act") against order dt.10/03/2009 of the Company Law Board and while admitting appeal, interim order was passed by Company Court on 24/07/2009 which was sought to be modified by Appellant Bank by way of application, which was partly accepted vide order dt.15/04/2010 whereby liberty was granted to Appellant Bank to dispose of immovable assets in its possession by adopting the procedure provided under law.

(3.) However, it was further observed that amount of sale proceeds be kept in a separate fixed deposit account subject to final outcome of company appeal; and at the same time, liberty was also granted to Respondent-1 (applicant) to participate in auction proceedings to be initiated by Appellant Bank in terms of provisions contained under Rules, 2002 and after order of modification being passed, auction for immovable property in question was held by Appellant Bank on 04/06/2010 keeping reserve price of the immovable property as Rs. 7.75 Crores. It has come on record that only Two bids were received with the offer of Rs. 7.81 Crores and Rs. 7.75 Crores respectively and highest bidder (M/s Kavita Soap Industries) submitted cheque which was dishonoured while being deposited for its encashment for want of sufficient funds; whereas second bidder submitted in writing showing no interest in purchase of the auctioned property and accordingly, the auction failed.