2008 Supreme(SC) 1204

2008(6) Supreme 9
Supreme Court of india
C.K. Thakker and D.K. Jain, JJ.
IFCI Ltd. & Anr. — Appellants
versus
Vishnu Kant Gupta — Respondent
Civil Appeal No. 4944 of 2008
Arising out of Special Leave Petition (Civil) No. 13843 of 2007
Decided on : 08-08-07

Important Point
Once the Court finds that the price offered is adequate, no subsequent higher offer can constitute a valid ground for refusing confirmation of sale.

Headnote:Sick Industrial Companies (Special Provisions) Act, 1985 – Initiation of winding up proceedings of a sick company – Direction given to Official Liquidator to take appropriate proceedings for sale of property of Company in liquidation – Offer of Rs. 5 crores payable in two quarterly instalments, i.e. in six months made by Respondent. 1 was found to be acceptable by Company Judge – On filing of two Writ Appeals against order passed by Company Judge interim stay was granted by Division Bench and operation of order by Company Judge was stayed – Appeals remained pending and stay operated for about six years – Both appeals were dismissed for default and stay granted by Division Bench came to be vacated – On coming to know about dismissal of appeals and vacation of stay order Respondent1deposited an amount of Rs. 3 crores and also gave an undertaking to pay Rs. 2 crores within three days- However, since other persons also gave offers Company Judge felt that it would be in interest of Company to re-advertise and re-invite tenders – Appeal against order of Company Judge – High Court held that grievance of appellant was well-founded and Company Judge was not justified in setting aside highest offer made by respondent 1 and accepted by Company Judge – Appeal – Ordinarily, when highest bid of intending purchaser is accepted, he is required to pay 25% of purchase-price immediately – However it had not been done-Neither 25% amount (1.25 crores) nor 75% amount (3.75 crores) was paid by respondent1 – After stay was vacated payment was made by respondent1. after more than six years – Even though higher offer of Rs. 6.5 crores in 2007 could not have invalidated highest offer of respondent 1 of Rs. 5 crores made in January, 2001, but one could not also be oblivious of fact that out of Rs. 5 crores respondent1 had parted with a negligible amount of of Rs. 10 lakhs only at that time – Hence held that ends of justice would be served if sale in favour of first respondent be confirmed with condition that respondent. 1 would pay an additional amount of Rs.three crores over and above payment which had been made by him – Appeal disposed of. (Paras 18 to 20)

       Facts of the Case :

       1.Winding up proceedings were initiated of a sick company herein in the instant case . Direction was given to Official Liquidator to take appropriate proceedings for sale of property of Company in liquidation. Offer of Rs. 5 crores payable in two quarterly instalments, i.e. in six months made by Respondent1 was found to be acceptable by Company Judge.On filing of two Writ Appeals against order passed by Company Judge interim stay was granted by Division Bench and operation of order by Company Judge was stayed. Appeals remained pending and stay operated for about six years. Both appeals were dismissed for default and stay granted by Division Bench came to be vacated. On coming to know about dismissal of appeals and vacation of stay order Respondent1 deposited an amount of Rs. 3 crores and also gave an undertaking to pay Rs. 2 crores within three days. However, since other persons also gave offers Company Judge felt that it would be in interest of Company to re-advertise and re-invite tenders. On Appeal against order of Company Judge, High Court held that grievance of appellant was well-founded and Company Judge was not justified in setting aside highest offer made by respondent 1 and accepted by Company Judge.

       2.Present appeal has been filed against said order of High Court.

       Findings of the Court :

       Even though higher offer of Rs. 6.5 crores in 2007 could not have invalidated highest offer of respondent 1 of Rs. 5 crores made in January, 2001, but one could not also be oblivious of fact that out of Rs. 5 crores respondent1 had parted with a negligible amount of of Rs. 10 lakhs only at that time. Hence held that ends of justice would be served if sale in favour of first respondent be confirmed with condition that respondent1 would pay an additional amount of Rs.three crores over and above payment which had been made by him.

       Result : Appeal disposed of.