Bombay High Court
Official Liquidator Of Auram ... vs M/S Liang Lih Machine Co Ltd on 6 April, 2021
Bench: K.R. Sriram
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
OFFICIAL LIQUIDATOR'S REPORT NO.31 OF 2021
IN
COMPANY PETITION NO.434 OF 2016
In the matter of Companies Act, 1 of
1956
And
In the matter of Auram Machines (India)
Private Limited (In Liquidation)
Liang Lih Machine Company Limited
247, Yasiou Road, Daya, Dist. Talchung ....Petitioner
----
Mr. Mahendhar Aithe, Company Prosecutor present.
Bidders :-
A] FOR MOVABLE:-
Successful bidder: Puja Enterprises- Represented by
Mr. Dushyant Solanki, Mobile No. 9689009000
e-mail ID- [email protected]
B] FOR IMMOVABLE:-
Successful bidder: Mr. Shubham Gore
----
CORAM : K.R.SHRIRAM, J.
DATED : 6th APRIL 2021
P.C. :
1 Pursuant to order dated 16th February 2021, Official Liquidator
had invited offers for sale of movable assets as well as immovable assets as
mentioned in the sale notice annexed at Exhibit "A" to the Official
Liquidator's Report. No reserve price was indicated as per the directions of
the Court.
Gauri Gaekwad
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FOR MOVABLE
2 For the movables, Official Liquidator has received nine offers
and the offers received are as under :
Sr. No. Name of the purchaser EMD Amount Offer Amount
1 Sainath Enterprises Rs.10,00,000/- Rs.23,00,000/-
2 M.K. Raj Enterprises Rs.10,00,000/- Rs.12,00,000/-
3 Rapti Steel Rs.10,00,000/- Rs.25,00,000/-
4 K.D. Enterprises Rs.10,00,000/- Rs.15,25,000/-
5 K.D. Ispat Pvt. Ltd. Rs.10,00,000/- Rs.15,00,000/-
6 National Steels Rs.10,00,000/- Rs.40,00,000/-
7 R.B.B. Steel Rs.10,00,000/- Rs.11,00,000/-
8 Puja Enterprises Rs.10,00,000/- Rs.25,00,000/-
9 Rajendra D. Gaikwad Rs.10,00,000/- Rs.21,05,000/-
3 Only Puja Enterprises was represented and others for whatever
unknown reason were unrepresented. Puja Enterprises increased its offer
from Rs.25,00,000/- to Rs.42,00,000/- and later gave a final offer of
Rs.52,00,000/-. I am inclined to accept and hereby accept the offer of Puja
Enterprises of Rs.52,00,000/- because as per the valuation report dated
18th January 2020 of Shetgiri and Associates, the value of movables is
estimated to be Rs.57,66,352/-. Almost 15 months have passed since then
and looking at the items listed in the Schedule to the valuation report, the
movables would have only depreciated further in value. Even if I accept the
estimated value as on 18th January 2020 to be the value as on date, still the
bid is more than 90% of the value indicated in the valuation report.
Gauri Gaekwad
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4 Moreover, the Apex Court in Kayjay Industries (P) Ltd. Vs.
Asnew Drums (P) Ltd. & Ors.1 observed that if court sales are too frequently
adjourned with a view to obtain a higher price, it may prove a self defeating
exercise. It will be useful to reproduce paragraph-7 as under:-
"Certain salient facts may be highlighted in this context. A court sale
is a forced sale and, notwithstanding the competitive element of a
public auction, the best price is not often forthcoming. The judge
must make a certain margin for this factor. A valuer's report, good as a
basis, is not as good as an actual offer and variations within limits
between such an estimate, however careful, and real bids by seasoned
businessmen before the auctioneer are quite on the cards. More so
when the subject matter is a specialised industrial plant, which has
been out of commission for a few years, as in this case, and buyers for
cash are bound to be limited. The brooding fear of something out of
the imported machinery going out of gear, the vague apprehensions of
possible claims by the Dena Bank which had a huge claim and was
not a party, and the litigious sequel at the judgment debtor's instance,
have `scare' value in inhibiting intending buyers from coming forward
with the best offers. Businessmen make uncanny calculations before
striking a bargain and that circumstance must enter the judicial
verdict before deciding whether a better price could be had by a
postponement of the sale. Indeed, in the present case, the executing
Court had admittedly declined to affirm the highest bids made on
May 16, 1969, June 5, 1969 and August 28, 1969, its anxiety to
secure a better price being the main reason. If court sales are too
frequently adjourned with a view to obtaining a still higher price it
may prove a sell defeating exercise, for industrialists will lose faith in
the actual sale taking place and may not care to travel up to the place
of auction being uncertain that the sale would at all go through. The
judgment debtor's plea for postponement in the expectation of a
higher price in the future may strain the credibility of the Court sale
itself and may yield diminishing returns as was proved in this very
case."
5 Puja Enterprises to pay the balance amount of Rs.42,00,000/-
on or before 6th May 2021. It is made clear that no extension will be granted
and if the balance amount of Rs.42,00,000/- is not paid by due date, i.e.,
6th May 2021, the sale to Puja Enterprises will stand cancelled and EMD of
Rs.10,00,000/- shall be forfeited and Puja Enterprises will also be liable for
1. 1974 SCC (2) 213
Gauri Gaekwad
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any reduction in value when resale take place and its Proprietor Mr. Kishor
Jain and Mr. Dushyant Solanki, who had represented Puja Enterprises will
be held liable for contempt of Court and contempt proceedings will also be
initiated against them for interfering with administration of justice.
EMD of the unsuccessful bidders to be returned.
FOR IMMOVABLE
6 The sale is of an open industrial plot admeasuring 4355.24 sq.
mtrs. situated at Plot B, Zone No.9.2, Gat No.183/1, Mauje Kasurdi Kheba,
Taluka - Bhor, District - Pune. Pursuant to the notice issued by the Official
Liquidator, two offers were received for this immovable property, one from
Suresh Y. Kashid, who had offered Rs.70,00,000/- and the other from
Shubham Gore, who had offered Rs.75,00,000/-.
7 The Court after considering the valuation report of Shetgiri and
Associates issued on 18th January 2020, asked the two bidders to improve
on their offers. Initial improvement suggested by the Court was Rs.2 lakhs
and after it reached Rs.1 Crore, they were directed to increase by Rs.5 lakhs.
Mr. Kashid set the ball rolling with Rs.77,00,000/- and offered finally
Rs.1,55,00,000/-. Against this, Mr. Gore improved his offer from
Rs.75,00,000/- to Rs.79,00,000/- and finally offered Rs.1,60,00,000/-. I am
inclined to accept the offer of Mr. Shubham Gore of Rs.1,60,00,000/-
because even though the valuation report is dated 18 th January 2020, the
Valuer has given the fair and reasonable market value to be
Gauri Gaekwad
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Rs.1,15,95,264/-, an increase of Rs.44,04,736/- (almost 38% more).
8 Mr. Shubham Gore to pay the balance amount of
Rs.1,35,00,000/- on or before 6th May 2021. It is made clear that no
extension will be granted and if the balance amount of Rs.1,35,00,000/- is
not paid by 6th May 2021, the sale to Mr. Shubham Gore will stand cancelled
and EMD of Rs.25,00,000/- shall be forfeited and Mr. Shubham Gore will be
held liable for contempt of Court and contempt proceedings will also be
initiated against them for interfering with administration of justice.
EMD of the unsuccessful bidders to be returned.
9 In both the cases, i.e., for movables and immovable, the sale
will only be in favour of the successful bidders and not any nominee or third
parties.
10 Official Liquidator's Report is allowed and accordingly disposed
in terms of prayer clauses - (a) and (b).
(K.R. SHRIRAM, J.)
Gauri Gaekwad
