Back
2023 Supreme(Del) 4865
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
M/s Native Estates Pvt Ltd. – Appellant
Versus
M/s Aravali Infrapower Ltd. (In Liqn.)Through The Official Liquidator & Ors. – Respondents
CO.APP. 12 of 2023, CM Nos.31468 of 2023, 31469 of 2023 & 31470 of 2023
Decided On : 06-07-2023
Mr. Rajshekhar Rao, Senior Advocate with Mr. Aman Nandrajog, Mr. Sumeer Sodhi & Mr. Arjun Nanda, Advocates, for the Appellant.
Mr. Vineet Dhanda, Mr. Vinay Yadav & Ms. Gurleen Kaur, Advocates, for UOI.
Mr. Lokesh Sinhal, Mr. Nikunj Gupta, Mr. Vaibhav Gupta & Mr. Umesh Bhaker, Advocates, for R-2 to 5.
Ms. Ruchi Sindhwani& Ms. Megha Bharara, Advocates for Official Liquidator.
The main legal point established in the judgment is that a challenge to a concluded transaction must be bona fide, and failure to participate in the auction or deposit the required amount can lead to the dismissal of the appeal.
Headnote:
Land Sale - Company Application No.236/2023 - [Order dated 02.11.2022, Company Application 143/2022, Order dated 10.10.2022, Sale notice dated 31.08.2022] - The court discussed the sale of immovable property, the auction process, the appellant's offer, and the subsequent rejection of the appellant's application for cancellation of the concluded transaction.
Fact of the Case:
The appellant challenged the sale of land ad-measuring 19 Bigha 11 Biswa situated at Khata No.110/75, Khasra No.1037/385, 392, 393, Khata No.51/78, Khasra No.8, 383, 384, 1036/386 at village Bhagwanpur, Derabassi, District Mohali, Punjab. The sale was confirmed by the Learned Company Court, and the appellant's application for recalling the order and setting aside the sale was rejected.
Finding of the Court:
The court found no infirmity with the impugned order rejecting the appellant's application for cancellation of a concluded transaction. The court also concluded that the present appeal was not bona fide and dismissed it with costs.
Issues: The issues revolved around the sale of the subject land, the appellant's offer, participation in the auction, and the subsequent challenge to the sale after a lapse of more than five months.
Ratio Decidendi: The court emphasized that the appellant's offer of Rs.10,65,38,430/- was for both the land and building and not land alone. The court also highlighted the appellant's failure to participate in the auction or deposit the required amount, leading to the dismissal of the appeal.
Final Decision: The present appeal was dismissed with costs quantified at Rs.50,000/-, to be deposited with the Official Liquidator within a period of two weeks from the judgment date. All pending applications were also disposed of.
JUDGMENT
Vibhu Bakhru, J.
1. The appellant has filed the present appeal impugning an order dated 24.04.2023 (hereafter `the impugned order'), whereby the appellant's application1[Company Application No.236/2023] for recalling the order dated 02.11.2022 and setting aside the sale of immovable property of the respondent company, was rejected.
2. The appellant seeks to challenge the sale of land ad-measuring 19 Bigha 11 Biswa situated at Khata No.110/75, Khasra No.1037/385, 392, 393, Khata No.51/78, Khasra No.8, 383, 384, 1036/386 at village Bhagwanpur, Derabassi, District Mohali, Punjab (hereafter "the subject land"). The sale of the subject land in favour of respondents no.2 to 5 was confirmed by the Learned Company Court, by an order dated 02.11.2022.
3. The appellant states that the subject land was sold on the basis of an application moved by the said respondents, without an open auction. It was also contended on behalf of the appellant that the appellant was willing to pay a higher price - a sum of Rs.10,65,38,430/- (Rupees ten crores sixty-five lacs thirty-eight thousand four hundred thirty only) - for the subject land but its offer was disregarded.
4. The appellant had, by its communication dated 07.08.2022 addressed to the Official Liquidator, expressed its inclination to, inter alia, purchase the subject land along with sheds and buildings constructed thereon at a price of Rs.10,65,38,430/-. Thus, the contention that the appellant had made a firm offer of Rs.10,65,38,430/- for purchase of the subject land is erroneous; the appellant's offer also included other assets.
5. It is relevant to note that the appellant's interest in acquiring the assets of the respondent company has a chequered history. The appellant, prior to making an offer for purchase of subject land and buildings, had purchased the movable assets located at the factory premises of the respondent company. However, under the guise of removing the movable assets, the appellant had also demolished the factory shed and building and removed the said material. At the material time, the appellant's related concern, Manasvi Security Agency, was entrusted with the security of the assets of the respondent company on the subject land.
6. On discovering that the appellant had removed the shed and building, the Official Liquidator filed an application2[Company Application 143/2022] before the learned Company Court pointing out that the eight sheds located at D-7 Eldeco Sidcul, Industrial Park, Sitarganj, Uttarakhand and on the subject land, had been unauthorisedly removed by the appellant. The learned Company Court passed an order dated 09.03.2022 issuing a notice in the said application and further directing that Rs.8,45,83,844.60/- be withheld from the amount due to Manasvi Security Agency.
7. It is material to note that the constituent partners of Manasvi Security Agency are spouses of the directors of the appellant company. The appellant as well as Manasvi Security Agency accepted the responsibility for unauthorisedly removing the shed and building located on the immovable property of the respondent company and tendered an unqualified apology. This was recorded by the learned Company Court in its order dated 20.04.20223[Order dated 10.10.2022 (Annexure as A-14 to the present appeal)].
8. The appellant was required to restore the assets that it had removed unauthorisedly. On 18.08.2022, the learned Company Court directed the Official Liquidator to issue auction notice for sale of the subject land as well as the shed and building constructed thereon (five sheds and one office building). The Court also recorded the appellant's statement that it would purchase the shed and building at the reserve price as earlier determined, in case the building and shed did not fetch the reserved price.
9. In compliance with the said order, the Official Liquidator issued an e-auction sale notice dated 31.08.2022 for sale of the subject land and building. The reserved price o
