Bombay High Court
In The Matter Of M/S Akola Oil Ind. ... vs None on 20 December, 2014
Bench: Ravi K. Deshpande
1 olr13.12 17.12.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
OFFICIAL LIQUIDATOR'S REPORT NOS. 13 TO 51 OF 2012
In Company Petition No.5 of 2001 (In the matter of M/s. Akola Oil
Industries Limited - In Liquidation)
Dr. Anjan De, Advocate for Official Liquidator.
S/Shri R.L. Khapre, A.B. Patil, S.A. Mohta, M.G. Sarda, A.M. Quazi, B.N.
Mohta and A.R. Deshpande, Advocates for Bidders/Auction Purchasers.
Shri A.M. Ghare, Advocate for Workers.
S/Shri C.A. Joshi and H.R. Gadhia, Advocates for Interveners.
Shri M.M. Ekre, AGP for State (in OLR No.37 of 2012)
CORAM: R. K. DESHPANDE, J.
DATE : 20
DECEMBER, 2014 .
th
ORAL ORDER
1] These reports are filed by the Official Liquidator
appointed over M/s. Akola Oil Industries Ltd. for confirmation
of auction sale held on 9-11-2012, as per the notice issued
pursuant to an order dated 13-4-2012 passed by this Court.
The advertisement contained invitation of bids for 39
properties on "as is where is basis" and "as is whatever
basis". In the auction conducted on 9-11-2012, the highest
2 olr13.12 17.12.odt
bids in respect of all the properties are accepted, subject to
confirmation of sale by this Court in terms of the order dated
13-4-2012.
2] On 15-2-2013, this Court passed an order as under :
"For the reasons stated in the report the highest bidders
are required to deposit the balance amount of the bid
price. The O.L.R., therefore, to issue the communication
to each of the bidder on the address given by him
specifying the exact amount which is required to be
deposited.
Upon receipt of such notice/intimation in writing, the
bidders shall deposit the amount to specified in the
notice, within a period of 15 days with the official
liquidator.
After receipt of the amount, the official liquidator to
submit his report before this Court for further orders."
The Official Liquidator was required to issue communication
to each of the bidders on the address given by them
specifying the exact amount, which was required to be
deposited, and upon receipt of such communication, the
bidders were required to deposit the amount so specified in
the notice, within a period of fifteen days with the Official
3 olr13.12 17.12.odt
Liquidator.
3] On 8-3-2013, when this matter was listed before this
Court, the attention of this Court was invited to Condition
Nos.9 and 21 of the terms and conditions of sale, which
required the deposit of the entire balance amount of
consideration within a period of six months from the date of
passing of the order of confirmation of sale by this Court. This
Court, therefore, modified the earlier order dated 15-2-2013
and directed that in the meantime, all the bidders should file
the pursis stating as to how much amount they are prepared
to deposit with the Official Liquidator, pursuant to the demand
raised by the Official Liquidator.
4] On 5-4-2013, the attention of this Court was invited to
the pursis filed by the bidders stating therein the exact
amount, which they were prepared to deposit with the Official
Liquidator. This Court, therefore, permitted the bidders to
4 olr13.12 17.12.odt
deposit the said amount with the Official Liquidator within a
period of one week, without prejudice to their contentions.
Subsequently, CAO Nos.637 and 585 of 2013 were moved by
some of the bidders for extension of time to deposit the
amount up to 30-4-2013. These applications were allowed by
this Court, without prejudice to the rights of the parties, by an
order dated 26-4-2013. Lastly, on 5-12-2014, this Court
passed an order as under :
"Heard the learned counsels appearing for the parties.
None of the parties have any objection for permitting the
auction purchasers desirous of getting the sale
confirmed to deposit the balance amount of
consideration with the Official Liquidator. In view of this,
the auction purchasers whose bids are accepted by the
Official Liquidator shall deposit the balance amount of
consideration with the Official Liquidator within a period
of 15 days from today. If within this period any of the
auction purchasers fails to deposit the amount of
balance consideration then the question with regard to
cancellation of their bids shall be considered.
Put up this matter on 20.12.2014 for arguments on
confirmation of sale."
Pursuant to the aforesaid order, about fourteen bidders have
deposited the balance amount of consideration with the
Official Liquidator within a period of fifteen days.
5 olr13.12 17.12.odt
5] Except one Shri Lalitkumar Himmatlal Shah, who
had submitted his bid in respect of plot No.11, admeasuring
216 square meters, beside Radheya Apartment, Akola, all
other bidders had deposited the amount as per orders dated
15.02.2013, 08.03.2013 and 05.04.2013. Similarly, the order
dated 5-12-2014 has been complied with by the fourteen
bidders, viz. S/Shri Jaswantsingh Oberoi (OLR No.14 of
2012), Ranjeetsingh Oberoi (OLR No.18 of 2012), Bajranglal
Balmukund Agrawal (OLR 19 of 2012), Bajranglal Balmukund
Agrawal (OLR No.20 of 2012), Bajranglal Balmukund Agrawal
(OLR No.22 of 2012), Bajranglal Balmukund Agrawal (OLR
No.28 of 2012), Subhash Bhattad (OLR No.29 of 2012),
Radheshyam Gokulchand Bagadia (OLR No.33 of 2012),
Ramesh Kashiram Wankhade (OLR No.35 of 2012), Kishor
Ramdhan Paldiwal (OLR No.38 of 2012), Ramesh
Bhagwandas Kalantri (OLR No.39 of 2012), Vivek
Prabhakarrao Bijwe (OLR No.45 of 2012), Prashant Dinesh
6 olr13.12 17.12.odt
Bhartiya (OLR No.50 of 2012) and Pravin Gangadhar Dhone
(OLR No.51 of 2012). The other bidders have urged that in
terms of clause Nos.9, 10 and 21, they are required to deposit
the balance amount of consideration only after the order of
confirmation of auction sale is passed by this Court.
6]
The Union of workers has raised an objection for
confirmation of auction. The State Bank of India, who is
undisputedly an unsecured creditor, has also raised an
objection. Separate applications are filed by the Akola Zilla
Kamgar Sangh (INTUC), a registered Trade Union, through
its President, Shri Pradipkumar Vakharia, in all these Official
Liquidator's Reports. The objections are common. The
interveners have also filed applications for cancellation of the
tenders opened on 9-11-2012. The objections by the Union
are that there is a cartel formed by the bidders to submit their
bids in auction. The dispute regarding valuation of the
property is also raised along with the dispute regarding its
7 olr13.12 17.12.odt
ownership. According to the objectors, the property belongs
to the State Government and not to M/s. Akola Oil Industries
Ltd. S/Shri A.M. Ghare and C.A. Joshi, the learned counsels
appearing for the Union and the workers, have invited my
attention to the provision of Rule 6 of the Companies (Court)
Rules, 1959 to urge that the procedure, as prescribed under
Rules 84 and 85 of Order XXI of the Civil Procedure Code, is
applicable, and that procedure has not been complied with
either by stipulating the condition in the notice inviting tender
or asking the parties to deposit the amount in the manner
specified under Rules 84 and 85 of Order XXI of the Code. It
is their submission that the provision is mandatory and failure
to comply, vitiates the entire process of auction. It is also
their submission that the period of two years has lapsed after
the date of the auction. The process has gone up and,
therefore, in the public interest, the property should be put to
re-auction by following the procedure prescribed under Rules
84 and 85 of Order XXI of the Code.
8 olr13.12 17.12.odt
7] The response of the learned counsels appearing for
the auction purchasers is that the procedure for auction is
governed by Rules 272 and 273 of the Companies (Court)
Rules, 1959, which has been complied with. According to
them, this Court accorded the sanction for issuance of notice
inviting the tenders, pursuant to which the auction was held
and the bidders have complied with the requirement of clause
9 of the terms and conditions of sale, and, therefore, the sale
need to be confirmed. This position is not disputed by the
Official Liquidator, who has supported the claim of the auction
purchasers, who have deposited the amount within the time
stipulated by this Court in the orders dated 5-4-2013 and 5-
12-2014. According to the learned counsels, the requirement
of Rules 84 and 85 of Order XXI of the Civil Procedure Code
is not at all applicable in view of the specific provision of Rule
6 of the Companies (Court) Rules, which states that the
provision of the Code so far as applicable, shall apply to all
9 olr13.12 17.12.odt
proceedings under the Act and the Rules. According to them,
the procedure is prescribed under the Rules, and, therefore,
the applicability of Rules 84 and 85 of Order XXI of the Code,
is excluded.
8] The dispute regarding valuation of properties, supply
of copy of the valuation report to the Union of workers,
fixation of reserve price and the earnest money to be
deposited along with the bid is governed by the provisions of
Section 457(2-A) and (2-F) of the Companies Act, 1956, and
th
it was resolved by an order passed by this Court on 9
March, 2012 in OLR No. 10 of 2011. This was the subject
matter of challenge in Company Appeal No. 2 of 2012 filed by
th
the Union, which was dismissed by the Division Bench on 18
September, 2012. The order has attained the finality and
therefore, I need not delve on the aspect any further.
9] Rule 6 of the Company Court Rules, 1956, relied
10 olr13.12 17.12.odt
upon by Shri Ghare, the learned counsel for the Union reads
as under;
"6. Practice and procedure of the Court and
provisions of the Code to apply. -- Save as provided
by the Act or by these Rules, the practice and
procedure of the Court and the provisions of the Code
so far as applicable, shall apply to all proceedings
under the Act and these Rules, The Registrar may
decline to accept any document which is presented
otherwise than in accordance with these Rules or the
practice and procedure of the Court"
In terms of the aforesaid provision, if the practice and
procedure of the Court is prescribed under the Act and the
Rules, the same is saved and to the extent there is no
provision under the Act and the Rules, the provisions of the
Civil Procedure Code shall apply to all the proceedings under
the Act and the Rules.
10] Rules 272 and 273 of the Company Court Rules
dealing with the Sales by the Official Liquidator, run as under;
272. Sale to be subject to sanction and to
confirmation by Court.-- Unless the Court otherwise
orders, no property belonging to a company which is
being wound-up by the Court shall be sold by the
11 olr13.12 17.12.odt
Official Liquidator without the previous sanction of the
Court, and every sale shall be subject to confirmation
by the Court.
273. Procedure at sale.-- Every sale shall be
held by the Official Liquidator, or, if the Judge shall so
direct, by an agent or an auctioneer approved by the
Court, and subject to such terms and conditions, if
any, as may be approved by the Court. All sales shall
be made by public auction or by inviting sealed
tenders or in such manner as the Judge may direct."
Rule 272 requires the Official Liquidator to obtain previous
sanction of the Court before putting the property to auction
and every such sale is to be made subject to confirmation by
the Court. As per Rule 273, every sale has to be made
subject to such terms and conditions as may be approved by
the Court and all sales shall be made by public auction or by
inviting sealed tenders or in such manner as the Judge may
direct.
11] The matter of Sales by the Official Liquidator is,
therefore, completely governed by Rules 272 and 273 of the
Company (Court) Rules and the applicability of the provisions
12 olr13.12 17.12.odt
of Civil Procedure Code is excluded by virtue of Rule 6 of the
Companies (Court) Rules. The objection raised in respect of
applicability of the provisions of the Civil Procedure Code is,
therefore, rejected and it is held that the sales by the Official
Liquidator are governed by Rules 272 and 273 of the
Companies (Court) Rules.
12] This Court has by an order dated 13.04.2012
approved or sanctioned the draft public notice incorporating
the terms and conditions of sales in respect of 39 properties
and fixed the reserve price or the earnest money to be
deposited separately in respect of each such properties.
Clause (9) of the terms and conditions of sales incorporated
in the public notice is reproduced below;
"9. The highest bidder whose bid is accepted by the
Official Liquidator shall deposit the amount within
such time/date as may be fixed by the Hon'ble High
Court of the date of sanction by way of cheque/pay
order/Demand Draft with the Official Liquidator and he
will have to pay balance purchase price within such
time/date as may be fixed by the Hon'ble High Court
from the date of confirmation of the sale by the
Hon'ble High Court Nagpur."
13 olr13.12 17.12.odt
The fixation of reserve price and the earnest money to be
deposited by the bidders are not the requirements of Order
XXI, Rule 84 and 85 of Civil Procedure Code. In terms of the
public notice issued inviting bids, every bidder has to deposit
the earnest amount specified to be 10% of the valuation of
each of the 39 properties so as to become eligible to
participate in the auction. The highest bidder whose bid is
accepted by the Official Liquidator is required to deposit the
amount within such time/date as may be fixed by this Court.
Upon acceptance of bid by the Official Liquidator, the bidder
is required to pay the balance purchase price within such
time/date as may be fixed by the Court from the date of
confirmation of the sale.
13] The Official Liquidator has accepted the highest bids
received from the eligible bidders and has filed the report for
th
confirmation of the sale. As per order dated 5 April, 2013, all
the bidders whose bids are accepted by the Official
14 olr13.12 17.12.odt
Liquidator were permitted to deposit the amount which they
had agreed to deposit in terms of pursis filed by them before
this Court. Accordingly, the bidders who have complied with
th
the order dated 5 April, 2013 are entitled to have their sales
confirmed. The same are now confirmed by this order.
14]
It is informed that some of the bidders have
deposited the balance amount of consideration with the
th
Official Liquidator in terms of the order dated 5 December,
2014. The other bidders have agreed to deposit the balance
amount of consideration with the Official Liquidator within
such period as may be directed by this Court after
confirmation of the auction in terms of clause (9) of the public
notice. In view of this, all other bidders who have not
deposited the balance amount of consideration are permitted
to deposit the same within a period of three months from
today with the Official Liquidator, failing which the sales to
them shall stand cancelled and the Official Liquidator shall
15 olr13.12 17.12.odt
accordingly submit the report to this Court proposing therein
the action to be taken.
15] The other objection regarding the title of the
Government in respect of the suit properties is concerned, it
is not understood as to how the Union of workers is benefited
by taking such a stand. If it is to be held that the property
belongs to the Government and M/s. Akola Oil Industries
Limited, Akola, is not owner of the property in question, then
it would be the Union of workers which shall be at loss. As a
matter of fact, the objector Union had filed Writ Petition No.
1161/2013 before this Hon'ble Court, challenging the decision
of the Government that the property belongs to M/s. Akola Oil
Industries, Akola. This petition was dismissed by this Court
st
on 21 December, 2013, holding that the Union has no locus
standi in the matter to raise such an objection. This order
has attained the finality. The objection is, therefore, rejected.
16 olr13.12 17.12.odt
16] It is not in dispute that the interest of the workers is
also protected by the order dated 11-7-2013 passed by the
Division Bench of this Court in Writ Petition No.822 of 2013
filed at the instance of the Akola Zilla Kamgar Sangh (INTUC)
and another. Undisputedly, the total dues of the workers are
to the extent of Rs.12,09,26,150/-, which are protected. I am,
therefore, unable to understand any such objection on the
part of the Union for disbursal of such amount. The State
Bank of India is an unsecured creditor and has, therefore, no
locus to raise any such objection to the auction sale
conducted by the Official Liquidator.
17] No doubt that the period of two years has expired
after the date of conducting the auction. It is the Union which
is responsible for the delay caused in confirmation of auction.
The matter remained pending and could not be decided
because the Union sought time in the matter to reply to the
various applications filed by the bidders and the reports filed
17 olr13.12 17.12.odt
by the Official Liquidator. The auction purchasers who have
deposited not only the earnest money but the substantial
portion of the amount which is between 20 and 30 percent of
the bid amount within the period stipulated by this Court,
cannot be non-suited solely on the ground of delay in
conformation of sale. The objections are, therefore, rejected.
18] In the result, the following order is passed.
[i] C.A.O. No. 428 of 2013 in OLR No. 17 of 2012 and
C.A.O. St. No. 5306 of 2014 in OLR No. 13 of 2012,
along with all connected civil applications for
intervention, objections and cancellation of sale are
dismissed.
[ii] All civil applications filed in different OLRs seeking
confirmation of sale and permission to deposit the
amount are allowed to the extent permitted by this
Court in the body of this order.
[iii] OLR NO. 13 of 2012 along with all other OLRs
seeking conformation of sale in respect of 29
properties are allowed to the extent stated in the
body of this order.
18 olr13.12 17.12.odt
OLR Nos. 13/12., 14/12, 15/12, 16/12, 17/12, 18/12,
19/12, 20/12, 21/12, 22/12, 23/12, 24/12, 25/12, 26/12, 27/12,
28/12, 29/12, 30/12, 31/12, 32/12, 33/12, 34/12, 35/12, 36/12,
37/12, 38/12, 39/12, 40/12, 41/12, 42/12, 43/12, 44/12/, 45/12,
46/12, 47/12, 48/12, 49/12, 50/12 and 51/12 are accordingly
disposed of.
All civil applications i.e. CAO Nos. 312/2013,
424/2013, 391/2014, 1629/2014, 1657/2014, 425/2013,
1374/2014, 356/2013, 430/2013, 1630/2014, 357/2013,
431/2013, 1634/2014, 351/2013, 432/2013, 1659/2014,
358/2013, 433/2013, 1633/2014, 1636/2014, 386/2013,
435/2013, 1616/2014, 350/2013, 436/2013, 1656/2014,
364/2013, 437/2013, 1637/2014, 388/2013, 438/2013,
1617/2014, 359/2013, 439/2013, 1635/2014, 342/2013,
441/2013, 389/2013, 442/2013, 1618/2014, 443/2013,
360/2013, 444/2013, 1631/2014, 345/2013, 448/2013,
478/2013, 1655/2014, 382/2013, 449/2013, 390/2013,
451/2013, 1615/2014, 452/2013, 1375/2014, 391/2013,
453/2013, 1620/2014, 392/2013, 454/2013, 1619/2014,
393/2013, 458/2013, 1661/2014, 459/2013, 1632/2014,
261/2013 and 461/2013 also stand disposed of.
If due to inadvertence, certain applications which
are not required to be disposed of are disposed of by this
19 olr13.12 17.12.odt
Order or certain applications which are disposed of were not
required to be disposed of, the Official Liquidator or the
concerned applicant shall be at liberty to approach this Court.
JUDGE
Rvjalit
