2015 Supreme(SC) 784

SUPREME COURT OF INDIA
J. Chelameswar, Abhay Manohar Sapre, JJ.
Vedica Procon Private Limited – Appellant
Versus
Balleshwar Greens Private Limited & Others – Respondents
CIVIL APPEAL NO. 6165 OF 2015 (Arising out of Special Leave Petition (Civil) No.2198 of 2015) WITH CIVIL APPEAL NO. 6166-6167 OF 2015 (Arising out of Special Leave Petition (Civil) Nos.10148-10149 of 2015)
Decided On : 13-08-2015

IMPORTANT POINTS
The judicial process and adjudication demand certainty and finality.
In auction sale of assets of a company under liquidation once the price is accepted, subsequent higher offer cannot be a ground for refusing confirmation of sale. Similarly subsequent developments cannot be relevant consideration.
Shifting stand of a litigant cannot be permitted.

Headnote:(a) Administration of Justice – Judicial propriety – Adjudication – Company liquidation – Appellant’s bid of 148 crores being highest accepted – Its initial deposit of 25% of price also accepted – Its request for extension of time for depositing balance amount accepted, although the said amount deposited before that – Respondent challenging sale and offering to deposit 160 crores within 72 hours – Division Bench not going into merits of the matter and not adjudicating rights of the parties but accepting respondent’s offer relying upon (2011) 6 SCC 207 – Accordingly the Single Judge setting aside its earlier order – Appellant’s appeal dismissed – Held, procedure adopted by the division Bench not very desirable being inconsistent with the principle of certainty and finality of judicial process and adjudication. (Para 21)

       (2011) 6 SCC 207 – Referred

       (b) Company law – Liquidation – Auction sale – Company Judge can accept or reject the highest bid before confirmation of sale – But once the price is accepted, subsequent higher offer cannot be a ground for refusing confirmation – Similarly subsequent developments cannot be relevant consideration – Recall of order by Company Judge not permissible. (Para 39, 48)

       (1969) 3 SCC 537 – Relied upon

       (2008) 9 SCC 299 – Referred

       (2000) 6 SCC 69; (2008) 10 SCC 440; (2011) 6 SCC 207; (2015) 3 SCC 112 – Distinguished

       (c) Company Law – Liquidation – Auction sale – Acceptance of highest bid and confirmation of sale – Nobody objecting to acceptance of highest bid of appellant and deposit of 25% of consideration amount by appellant – First respondent withdrawing its earnest money – All indicating confirmation of sale in favour of appellant – Even if the order did not specifically mention ‘confirmation of sale’ in absence of any legally valid reason the sale could not be cancelled – Subsequent offer of higher consideration cannot be a valid reason for cancelling the sale. (Para 50)

       (d) Company Law – Liquidation – Auction sale – Value of the property increasing day by day – First respondent, in order to get the sale cancelled adding new grounds at every stage of the litigation – Not permissible. (Para 51)

       Facts of the case:

       M/s Omex Investors Ltd. was ordered to be wound up by the Company Judge of the Gujarat High Court by an order dated 6.3.1990. The Official Liquidator attached to the Gujarat High Court was appointed as the Liquidator of the said company.

       By order dated 26.3.2013, the official liquidator was directed to put the freehold land of the company admeasuring 13895 sq. mtr. to auction for sale by inviting offers from the intending purchasers in sealed covers. By the said order, the High Court also fixed an upset price at Rs.55 crores and earnest money deposit (EMD) at 10% thereof.

       On 17.12.2013, an auction was held in the open court. After inter-se bidding of 12 rounds, the appellant “Vedica Procon Private Limited” became the highest bidder with an offer of Rs.148 crores whereas the first respondent (Balleshwar Greens Private Limited) made the second highest bid.

       The earnest money deposit of the first respondent was refunded on its request.

       The appellant requested and was granted extension of time for depositing the price money, although it did not avail the same.

       The first respondent, as per orders in passed in its OJ Appeal against the order granting extension of time to deposit the balance amount by the appellant and expressing its willingness to raise its offer to an amount of Rs.160 crore for the land in question and also offered to deposit the said amount within 72 hours.; filed an application before the Company Judge which was allowed. The sale made in favour of the appellant on 17.12.2013 was set aside the return of the amount already paid by the appellant was ordered. The Court also directed a fresh auction of the property in question. He also directed the first respondent to pay an amount of Rs.25 lakhs to the appellant.

       The appellant carried the matter to the High Court in O.J. Appeal which was dismissed by the Division Bench.

       Finding of the Court:

       Impugned judgment is not sustainable.

       Result: Appeal allowed with cost.