The company court has the discretion to accept or refuse the highest bid at an auction held pursuant to its order, and this discretion should be exercised to ensure that the price fetched is adequate.

N. P. SINGH, C. J.

( 1 ) THIS appeal has been filed on behalf of the United Bank of India against an order dated December 11, 1989, passed by a learned judge of this court, directing sale of the assets of the Bharat Electrical Industries Limited (in liquidation } ( hereinafter referred to as " the company " ) to the State of West Bengal, on payment of Rs. 1 crore.

( 2 ) THE appellant, who is admittedly a secured creditor, has made a grievance in this appeal that, when, in the sale notice, Rs. 2. 50 crores was fixed as the reserve price for the sale of the assets of the company, the learned judge should not have accepted the offer of the State of West Bengal of Rs. 1 crore only.

( 3 ) COUNSEL appearing for the State of West Bengal and the official liquidator pointed out that, from the different orders passed by the learned judge, it would appear that the official liquidator was directed several times to publish the sale notice in different newspapers inviting sealed tenders for sale of the assets of the company " as a going concern ", but the offer of Rs. 1 crore made by the State of West Bengal being the highest, the learned judge directed the sale of the assets of the company to the State of West Bengal. On behalf of the official liquidator, our attention was drawn to clauses (c), (d), (f), (g), (h) and (i) of paragraph 3 of the affidavit-in-opposition filed in this appeal, where details of the different orders passed by the learned judge directing the publication of the sale notice from time to time in different newspapers and offers received pursuant to such advertisements have been stated.

( 4 ) FROM the affidavit in opposition filed on behalf of the official liquidator referred to above, it appears that, as per direction of the coxirt, first, the sale notice was duly published once in the Statesman, once in Ananda Bazar Patriha and once in Viswamitra on May 24, 1987, inviting sealed tenders for sale of the assets of the company " as a going concern " by June 12, 1987. A notice of the said sale was also given to all the secured creditors of the company. Pursuant to the said notice, three offers were received by the joint receivers. The highest offer was for Rs. 61,31,111. The joint receivers did not accept the highest offer.

( 5 ) AFTER perusing the report of the official liquidator, the company court passed an order dated November 13, 1987, directing the official liquidator and the joint receivers to invite sealed tenders afresh for the sale of the assets of the company by advertisement once in Statesman, once in Ananda Bazar Patrika and once in Viswamitra fixing January 8, 1988 for sale. The sale notice was published as directed above in different issues of*the newspapers. The highest offer pursuant to the aforesaid notice received was for Rs. 42 lakhs from the Maruti (India) International, which Was not accepted by the court.

( 6 ) AGAIN, on February 19, 1988, the company court directed the official liquidator to invite sealed tenders and to publish the notice in Statesman, Aajkal and Viswamitra fixing April 22, 1988, as the date for sale. As per the direction, the sale notice was published but the highest offer received was for Rs. 40 lakhs only from the Bhagat Refineries Chemicals Ltd. which was not accepted. Thereafter, the company court on May 6, 1988, passed another order directing the official liquidator to invite fresh offers by publishing the sale notice in the Statesman, Ananda Bazar Patrika and Viswamitra fixing July 1, 1988, as the date for sale. The notice was published in the papers aforesaid on the dates mentioned in the affidavit-in-opposition: Only one offer for Rs. 62 lakhs was received and as such the sale was again adjourned to August 12, 1988. On that date, another offer for Rs. 66 lakhs was received from one R. R. Saraf. The learned judge again adjourned the matter to October 7, 1988, saying that the intending purchasers should file their respective affidavits. Two affidavits offering Rs. 41.

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