B.Bhattacharya J. - (1.) By filing two separate applications, one M/s. Jay Prestressed Production Ltd. ("Jay") and another M/s. Sharma Chemical Works ("Sharma") have prayed for recalling our order dated July 2, 1998 by which we disposed of the appeal by confirming the sale of the assets of Tirupati Woollen Mills Ltd. under liquidation ("Company") in favour of Divya Manufacturing Co. Pvt. Ltd., the respondent No. 6 herein ("Divya") on certain terms and conditions.
(2.) The factual backgrounds leading to the filing of the aforesaid two applications can be summarised thus: (a) A learned Single Judge of this court in B.I.F.R. Case No. 11 of 1998 (In re: Tirupati Woollen Mills Limited in liquidation) by order dated February 6, 1998 confirmed the sale of all the assets and properties of the Company in favour of Divya at the price of 85 lakhs. By the said order, the said learned Single Judge refused the prayer of the appellant herein, one of secured creditors of the Company, for setting aside the sale on the ground of inadequacy of sale price. However, by the said order, the secured creditors were given one last chance to find a buyer who could make a higher offer than that of Divya and further re-employ the workmen who were out of employment on the terms and conditions as those mentioned in the agreement between Divya and the Employees' Union within the period of 30 days. In default, however, the said sale stood confirmed in favour of Divya. (b) Being dissatisfied with the aforesaid order dated February 6, 1998, the appellant herein preferred the instant appeal and on its application for stay this court stayed the operation of the order passed by the learned Single Judge. (c) While hearing the instant appeal, on May 6, 1998, this court directed the Official Liquidator to make a wide publication for fresh sale of the assets and properties of the Company by keeping the appeal pending. (d) Pursuant to the said advertisements, tenders were received and ultimately on July 2, 1998 the sale of all the assets and properties of the Company was held before this court. After completion of the bids by the intending purchasers, the offer of Divya being highest was accepted and confirmed by this court for Rs. 1.3 crore. The offer of Jay was the second highest for Rs. 1.25 crore. (e) It will not be out of place to mention here that Sharma moved an application on July 1, 1998 thereby praying for permission to participate in the sale to be held on July 2, 1998 but as the said Sharma did not comply with the requirements of the advertisement for sale, this court on July 2, 1998 before commencement of auction rejected their prayer for participation. (f) As indicated earlier, on July 2, 1998, we accepted the offer of Divya and confirmed the sale in its favour by directing the said Divya to pay the entire balance consideration money within 30 days from that day. (g) On July 23, 1998 the instant two applications were moved, when both the applicants offered Rs. 2 crores for purchasing the assets of the company on the same terms and conditions upon which it has been sold to Divya. Both the petitioners in order to show their bona fides expressed their intention through their respective counsels to deposit earnest money to the extent of 20% of Rs. 2 crores in the shape of demand draft or bankers' cheque by July 27, 1998. They also gave undertaking before this court that they would purchase the assets of the company as a going concern and shall be bound by the direction contained in order dated July 2, 1998 in so far as the employment of the workers in the factory is concerned (Clause IX) appearing at page 41 of the application of Jay. (h) This court accordingly on July 2, 1998 directed the two applicants to deposit before the Official Liquidator, High Court, by demand draft or bankers' cheque a sum of Rs. 40 lakhs each without prejudice to the rights and contentions of the parties in these proceedings. We further made it clear that such deposit would not create any right in favour of these two applicants unless the issue is finally decided by us on the next date. On that day, the learned counsels further gave undertaking before us that if no other purchaser comes forward to purchase the assets at the aforesaid amount of Rs. 2 crores or at any higher amount than Rs. 2 crores, the earnest money deposited by them shall stand forfeited if they refuse to purchase at the price of Rs.2 crores. We accordingly accepted their undertaking and directed the parties to exchange their affidavits and fixed the matter for hearing on July 31, 1998. The parties have accordingly filed their respective affidavits.
(3.) In the application filed by Sharma, the said applicant has alleged that on July 2, 1998 while their prayer for permission to participate in the auction was rejected, the applicant was not aware of the judgment of the apex court in the cases of Lica Pvt. Ltd. v. Official Liquidator and another reported in 1996 Company Cases paged 788 and 792 respectively and as such the applicant's learned counsel could not show those judgments while moving the said application. By relying upon the said judgments, Sharma contended that they were inclined to purchase the assets at the price of Rs. 1.45 crore which was Rs. 15 lakhs above the price at which the sale has been confirmed in favour of Divya. As indicated earlier, although Sharma prayed for recalling our order dated July 2, 1998 by offering Rs. 1.45 crore in the application, at the time of pressing the application, its learned counsel enhanced the said amount to Rs. 2 crores.;