JUDGMENT

K. RAMASWAMY, J.- Special leave granted.

2. In the winding-up proceedings of India Electric Works Ltd. one of its assets, namely, an open land situated in Delhi was offered for sale by sealed tenders. The appellant and Mr Shantilal Malik, 22 Defence Colony Market, New Delhi and others submitted their tenders. At an open auction held on 31-7 -1992 from an offer of Rs 2,00,000, Mr Malik became the highest bidder for Rs 37,00,000. He was directed to deposit 25 per cent of the bid amount within two weeks and the remainder within 60 days. The learned Company Judge, Calcutta High Court posted the case to 14-8-1992 for further action. On 14-8-1992 the appellant offered a sum of Rs 38,00,000. The Company Judge after consideration allowed the petition of the appellant and directed to deposit 10 per cent of the bid by 17-8-1992 and balance 15 per cent to make up 25 per cent by 24-8-1992 and adjourned the case to 1-9-1992. Shantilal Malik, the second respondent also was given an opportunity to increase his offer. Feeling aggrieved against this order Shantilal Malik filed an appeal before the Division Bench. The Division Bench by the impugned judgment dated 15-9-1992 set aside the order of the Company Judge and directed to confirm the sale to Shantilal Malik at Rs 37,00,000 as against which the present appeal has been filed. When the appellant offered Rs 45,00,000, by order dated 29-10-1992 this Court directed the appellant to deposit the said sum of Rs 45,00,000 after taking into account the sum already deposited in the Company Court within a period of three weeks from that date. Pursuant thereto the appellant deposited the amount.

3. The Division Bench set aside the order on the ground that "after acceptance of the offer by the Company Judge, the sale should have been treated as closed and it would not have been proper for the Court to consider any other offer under subsequent date even if such subsequent offer was higher. The earlier offer already accepted by the Court could not be rejected upon some higher offer made later on; if this course is accepted then there will be no finality in any matter and in such event every now and then the offer already accepted may be upset by being rejected in view of some higher offer .

... If an offer is accepted then such offer cannot be later on rejected unless there are some strong grounds, namely, that the price offered is inadequate or that some action of fraud is involved. In the present case before us none of such elements was there before the trial court calling for rejection".

Admittedly the sale is subject to acceptance by the Court and as per Condition 11 even a confirmed sale is liable to be set aside.

4. In Navalkha & Sons v. Ramanya Das1 this Court held that the court is the custodian of the interests of the company and its creditors and the sanction of the court required under the Companies Act has to be exercised with judicial discretion regard being had to the interests of the company and its creditors as well. Where the acceptance of the offer by the Commissioner is subject to confirmation of the court, the offer or does not, by mere acceptance, get any vested right in the property so that he may take automatic confirmation of this offer. The condition of confirmation by the court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case it is the duty of the court to satisfy itself that having regard to the market value of the property the price offered is reasonable. Unless the court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discrelion. In that case the Court upheld the order of the Company Court reopening the concluded sale and reauction was upheld. In Kay jay Industries (P) Ltd. v. Asnew Drums (P) Ltd. in a court sale under Order 21 Rule 90 when it was set aside. th