Decided on March 09,1988



P.R.GOKULAKRISHNAN - (1.)This O. J. Appeal is against the order passed by the learned single Judge of this Court in Company Application No. 29 of 1988 inasmuch as by the said orders the learned single Judge has given certain directions which are as follows:
(1) it is directed that fresh advertisement in the Times of India & Gujarat Samachar Ahmedabad Edition should be given inviting members of the public to offer their bids on the same terms and conditions on which the offers were invited earlier.

(2) In the fresh advertisement it shall be stated that offer should not be for an amount less than Rs. 13 25 0

(3) After the offers are received the Provisional Liquidator will open the sealed covers in the Court and seek further directions with respect to confirmation of sale. It is made clear that it will be open to this Court to accept that offer which this Court finds to be most advantageous and it will not be open to anyone to claim that because his offer is the highest it must be accepted by this Court

(4) The Official Liquidator shall return to the two offerers their demand draft of Rs. 50 0 each.

(5) Dena Bank has agreed to bear the expenses of fresh advertisement and therefore the Provisional Liquidator is directed to give the advertisement through the Dena Bank so that he has net to incur expenses for the same.

(2.)The appellant herein who is one of the highest bidder has come forward with the present O. J. Appeal stating that the highest bid ought to have been accepted by the Company Court and the direction given by the Court is not correct. The Company Court in Company Application No. 89 of 1986 passed an order dated 11-12-1987 directing the Provisional Liquidator to sell all those items on has and where is basis after inviting offers from the intending purchasers and accepting the highest offer. For this purposes the Court also directed be to bow the advertisement has to be made and the procedure that has to he followed by the Provisional Liquidator. In pursuance of this direction the advertisement was made and the appellant herein originally offered Rs. 3.25 0 but later increased their to Rs. 13 25 0 In the same want the next highest bidder who originally offered Rs. 2 0 0 increased his offer to Rs. 13 0 0 Thereafter the Provisional Liquidator made a report to the Company Court and sought Further direction. When the Court took up this matter for consideration other two companies came forward to offer higher price. Those companies contended before the Court that they had never an opportUnity of inspection and after inspection they are convinced that the price for the articles involved in this case will be much higher than the one offered by the appellant before the Provisional Liquidator. The learned Judge after elaborating all the facts and also the cases cited by Mr. Shah learned Counsel appearing for the appellant gave the aforesaid directions which we have extracted above. Incidentally it has tn be noted that the Officer of the Dena Bank has also valued the 31 items of the properties at Rs. 31.27 lakhs. Against the order passed by the Company Judge in Company Application No. 29 of 1988 this O. J. Appeal has been filed.
(3.)Mr. Shah learned Counsel appearing for the appellant mainly contended that the direction dated 11-12-1987 has specifically given power to Provisional Liquidator to sell all the articles on has and where is basis after inviting firms from the intended purchasers and accepting the highest offer. Thus from the order itself it is clear that the Court has impliedly given confirmation if the provisional Liquidator accepts the highest offer for the articles in question. Mr. Shah further submits that there is automatic confirmation of the offer of the highest hider. In support of his contention Mr. Shah invited our attention to the decision in the case of Taj Clay Works Ltd. v. Official Liquidator AIR 1960 AP 429. This decision has allowed the running reported in AIR 1952 All. 113 (Brindra Ban Agarwala v. Official Liquidator Saraswati Soap and Oil Mills) and AIR 1940 Madras 42 (Soundararajan v. Mahomed Ismail). In this Andhra Pradesh Judgment it has been specifically held in paragraph 8 as under:
" The observations of the learned Judges in that case are pertinent in the present context:

It is only right and proper that the sale should be subject to the confirmation of the Court. The condition is a safeguard against irregularity or fraud in connection with the sale and against property being sold at an inadequate price".
This principle has been strictly followed in the present case also. The observation and the principles enunciated in this decision and other decisions referred to above clearly supports the order passed by the learned Judge. It is clear from the facts of the present case that one of the highest bidders who is the appellant herein has raised his bid from Rs. 3 25 0 to Rs. 13 25 0 and yet another bidder has raised his bid from Rs. 2 0 0 to Rs. 13 0 0 When the matter was subsequently referred to the Company Court by the Provisional Liquidator two other offerers came forward for the purpose of giving higher offers. Considering these glaring facts which ware before the Court the learned Judge thought it fit to give directions which we have quoted above. It is a clear case where inadequate price has been offered by the appellant at the initial stage when he in response to the advertisement offered his price for the 31 items in question at Rs. 3 25 0

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