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2018 Supreme(P&H) 3236
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Rakesh Kumar Jain, J.
Jct Electronics Ltd - Appellant
Versus
Jct Electronics Ltd (in Liqn ) And Another - Respondent
Civil Appeal No. 1 and 38 of 2018 and Company Petition No. 217 of 2015
Decided On : 08-03-2018
Chetan Mittal, Adv., V.K. Sachdeva, Adv., Deepak Aggarwal, Adv., Ashwani Chopra, Adv., Mayur Kanwar, Adv., Ankit Middha, Adv., Vishal Aggarwal, Adv., Manish Jain, Adv.
The court emphasized the importance of fair auction procedures, confirmed sales, and the interests of the company in liquidation and its creditors.
Headnote:
ARCIL - Sale of Land in Liquidation - CA No. 597 of 2016, CA No. 296 of 2017, CP No. 2017 of 2015 - The court discussed the provisions of the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016, particularly regarding the sale of assets in liquidation, auction procedures, and confirmation of sale. The court emphasized the importance of fair auction procedures, confirmed sales, and the interests of the company in liquidation and its creditors.
Fact of the Case:
The M/s. Asset Reconstruction Company (India) Ltd. filed an application seeking permission to sell a piece of land owned by a company in liquidation. The land was part of a larger chunk of land already sold in a consolidated auction. The court had previously allowed the consolidated auction and confirmed the sale of the larger chunk of land.
Finding of the Court:
The court found that the Bidder failed to show bonafide by not depositing the required amount within the given time frame, despite claiming willingness to pay a higher price. The court dismissed the Bidder's application for an extension of time and allowed the ARCIL's application to sell the remaining land.
Issues: The main issue was whether the Bidder's offer should be considered after the sale of the larger chunk of land was confirmed. The court also considered the adequacy of the Bidder's offer and the fairness of the auction procedures.
Ratio Decidendi: The court held that the Bidder's failure to show bonafide by not depositing the required amount within the given time frame justified the dismissal of the Bidder's application for an extension of time. The court emphasized the importance of fair auction procedures, confirmed sales, and the interests of the company in liquidation and its creditors.
Final Decision: The court dismissed the Bidder's application for an extension of time and allowed the ARCIL's application to sell the remaining land.
JUDGMENT
Rakesh Kumar Jain, J —This application is filed by the M/s. Asset Reconstruction Company (India) Ltd. (for short ARCIL) for seeking permission to conduct and confirm the sale of 24 Ares 28 Sq. Mtrs = 0.60 Acres approximately of land situated in Block No. 1746 situated at Village Kandri, Taluka Karjan, District Vadodra, Gujarat owned by M/s. JCT Electronics Limited (Company in Liquidation) which is in possession of the Official Liquidator, at the already confirmed reserved price of Rs. 56.91 Lacs per acre, to the same Auction Purchasers M/s Mahansaria Industrial Ventures Private Limited and M/s Astra Industries and Trading Private Limited to whom 183.32 acres of land has already been sold in consolidated manner (35.88 acres of uncharged land on behalf of official liquidator alongwith 147.44 acres of land already in the possession of the applicant-ARCIL situated at Block No. 1669 at Kandari, Taluka Karjan, District Vadodra, Gujarat in the same terms of the order dated 27.02.2017 passed by this Court in CA No. 597 of 2016 and in terms of order dated 02.12.2017 passed in CA No. 296 of 2017 in CP No. 2017 of 2015.
2. The brief background of this case is that the company in liquidation was ordered to be wound up vide order dated 26.08.2016 of this Court passed in a Company Petition bearing No. CP-217-2015. The official liquidator took the possession of 35.88 Acres of uncharged land. The applicant filed an application bearing No. CA-597-2016 for seeking permission of this Court to conduct consolidated auction of the total land measuring 147.44 acres already in its possession and 35.88 acres of land which is in possession of the official liquidator. In the said application, the following order was passed on 27.02.2017 by this Court:-
"After going through the facts and circumstances of the case and on account of no objection on the part of Official Liquidator, the company application is allowed.
The permission is granted for consolidated auction by ARCIL and Official Liquidator of the total land of 147.44 acres in possession of ARCIL and 35.88 acres of land in possession of Official Liquidator. It is further directed that ARCIL shall fix the Reserved price of total land of 183.32 acres at Rs. 56.91 lacs per acre in two lots, i.e. for 147.44 acres and for 35.88 acres land separately.
Applicant ARCIL shall deposit proportionate sale proceeds of 35.88 acres of land arising out of total sale of 183.32 acres (147.44+35.88) with Official Liquidator immediately upon realization.
So far as the adjacent land of 44.15 acres in possession of Official Liquidator is concerned, the applicant shall be permitted to sell the same on Reserved price of Rs. 12.75 crores, ARCIL shall remit the entire sale proceeds to Official Liquidator. In case the auction proceedings are not finalized, the ARCIL would be permitted to re-auction the properties on the same terms but the Reserved price will be re-fixed after seeking permission from the Court not to sell the land below the distress sale value as already assessed by valuer.
On asking of the Court, affidavit of authorized representatives of the company has placed on record giving detailed particulars of the property in the form of Schedule 1,2 and 3. Copy of the order be supplied to the learned counsel for the parties under the signatures of the Bench Secretary."
3. Apropos, the applicant issued an e-Auction notice on 01.03.2017 in respect of 147.44+35.88 acres of land total measuring 183.32 acres for conducting auction on 31.03.2017 at a total reserved price of Rs. 104.34 Crores. In the said auction notice, reserved price for building was fixed at Rs.11.82 Crores and Rs. 12.75 Crores was fixed for a separate chunk of land measuring 44.15 acres The said auction failed because there was no bidder. Consequently, the applicant issued the second auction notice on the same terms and conditions on 07.08.2017 for 24.08.2018 which was extended for 15 days i.e upto 08.09.2017.
4. It is alleged that on 07.09.201
