Kumardhubi Metal Casting & ... vs Kumardhubi Karamachari Congress ...
2022 Latest Caselaw 2135 Jhar

                  IN THE HIGH COURT OF JHARKHAND AT RANCHI
                                   C.P. No. 2 of 1996 (R)
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Kumardhubi Metal Casting & Engineering Ltd. --- --- ---- Petitioner Versus Kumardhubi Karamachari Congress & others --- --- --- Respondents

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CORAM: Hon'ble Mr. Justice Aparesh Kumar Singh

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For the Official Liquidator: M/s Himanshu Kr. Mehta,Manjusri Patra, Advocate For the Bank of India: Mr. A. Allam, Sr. Advocate For the Workmen: M/s M.M. Pal, Sr. Advocate, Mahua Palit, Mohini Gupta, Advocates For the BSIDC: Mrs. Richa Sanchita, Advocate For the EPFO: Mr. Anil Kr. Singh, Advocate For the Intervenor: Mr. Abhay Prakash, Advocate For the Intervenor: Mrs. Chaitali C. Sinha, Advocate For the Intervenor: Mr. Sharad Kaushal, Advocate

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214/ 10.06.2022 I.A. No. 3022/2022 preferred by the Bihar State Industrial Development Corporation, a shareholder, is not being pressed by the learned counsel for BSIDC Mrs. Richa Sanchita since auction process is underway. Two more persons have shown interest to participate in the bidding process.

2. Learned Senior counsel for the secured creditor Bank of India, learned Senior counsel for the workmen Mrs. M.M. Pal both rely upon the judgment of the Apex Court in the case of Jaipur Metals and Electricals Employees Organization through General Secretary Tej Ram Meena versus Jaipur Metals and Electricals Limited through its Managing Director and others [(2019) 4 SCC 227] and submit that since the instant proceeding for winding up has been initiated on the opinion of the BIFR, they are not liable to be transferred under the Companies (Transfer of Pending Proceedings) Rules, 2016.

3. In view of categorical submission made on behalf of learned counsel for BSIDC, instant petition is dismissed as not pressed.

4. To recapitulate, vide order dated 18.12.2020, auction sale notice was published in two daily newspapers inviting offers by the interested bidders to be submitted on or before 22.01.2021, as per the condition prescribed in the sale notice. Reserve price was indicated as Rs. 110.50 crores. By order dated 05.02.2021, cut-off date for submission of bid was extended up to 22.02.2021 in order to have fair competition. Learned Official Liquidator was directed to issue corrigendum in the newspaper and also on the website to that effect. Bid was to be opened on 26.02.2021. For the reasons stated in the order dated 26.02.2021, upon taking note of the submission of learned Official Liquidator and in

particular, secured creditor Bank of India, the cut-off date for submission of the bid was further extended till 09.03.2021. However, no fresh bid was submitted after extended date up to 09.03.2021. One of the prospective bidders Unistar Metals Pvt. Ltd. who had conveyed his intention to participate in the bid, had also backed out. By that date, there was only one prospective bidder. Therefore, learned Official Liquidator was asked to seek instruction from the Ministry of Corporate Affairs and also place the relevant guidelines when this is a single bid. On 26.03.2021, it was informed that Ministry has clarified that no specific guidelines in this regard has been laid down for guidance of the Official Liquidator in respect of the process to be adopted in case of sole bid. It is up to the judicial discretion of the Company Court.

5. This Court thereafter took note of the sequence of the dates and events in relation to the instant auction process. As per the report of the Official Liquidator, some of the parties had expressed their intention to participate in the bidding process and filed intervention application before this Court for permission to purchase bid papers. They were ready to comply with the conditions of the bid and submit the earnest money. Learned Official Liquidator had also requested that the interveners may be allowed to participate in the bid to make it more competitive and transparent. As such, it was prayed that a suitable date for auction may be fixed accordingly. This Court taking note of the aforesaid circumstances and for the reasons indicated in the order dated 26.03.2021 and in order to have a fair competition and level playing field amongst all interested bidders, extended the cut-off date for submission of bid up to 07.04.2021. Learned Official Liquidator was directed to issue corrigendum on the website of the Ministry of Corporate Affairs by 27.03.2021 to that effect to invite wider publicity and offer of more interested bidders.

6. When the matter was taken up on 09.04.2021, two reports were submitted by the Official Liquidator, one dated 07.04.2021 and the other dated 08.04.2021. As per the reports, there were four bidders in the fray, but except Al Sifah Minerals Private Limited, Jamshedpur who was present through its Director Faiyaz Khan along with his counsel online, rest of the three bidders were not present. Since all the bidders were not present on that day, bid documents were not opened in their absence. Date of opening of the Bid was fixed on 16.04.2021 with a direction to the bidders to be present with proper authorization of their Company on the next date. It was also made clear that if

any of the bidders have not submitted the audited balance sheet and income tax returns for the last three financial years, they shall submit it before the Official Liquidator latest by 14.04.2021. Meanwhile, permission was granted to Al Sifah Mineals Private Limited to carry out inspection of the assets of the Company. One of the interveners M/s SSG Renew-Tech Pvt. Ltd. sought to withdraw from the list of parties interested in purchasing the assets of the Company through I.A. No. 2128/2021. As such, said prayer was allowed.

7. Thereafter, the second wave of covid-19 unfortunately intervened. Some of the parties sought further extension of time to inspect the assets of the Company. Proceedings were held online. One of the parties sought further time to participate in the bidding process while representative of M/s Al Sifah Minerals Private Limited sought further time to carry out inspection. He had also not been able to file audited balance sheet and income tax returns for the last three financial years. Not only the parties, but the court was also facing practical difficulty due to huge spike in Covid cases in the court staff as well. In those circumstances, it was deemed proper to defer the bidding process for at least two weeks. Matter was ordered to be listed on 06.05.2021. Thereafter, the matter was taken up only on 18.02.2022 after a long gap due to prevailing Covid situation. Learned counsel for the Official Liquidator informed that respective bidders carried out inspection of the assets of the Company, but some of the bidders did not comply with the direction contained in the order dated 17.04.2021. Matter was adjourned for two weeks to enable the parties to comply with the direction contained in the order dated 17.04.2021. When the matter was taken up on 04.03.2022, none of the bidders turned up or complied with the directions contained in the order dated 17.04.2021. Learned Official Liquidator was asked to inform the bidders on their official e-mail address and phone about progress of this case so that interested bidders make necessary compliance and appear on the next date before the Court. They were also asked to renew the cheques, demand draft or any other instruments through which they have deposited the earnest money at the time of making the bid. On the next date also, situation remained the same and as such, Official Liquidator was asked to send reminder. Only one bidder Al Sifah Minerals Private Limited was represented. On the subsequent date on 08.04.2022, learned Official Liquidator informed that despite indulgence granted by this Court, no other bidder has turned up, though intimation and reminder have been sent by the Official

Liquidator.

8. Thereafter, matter was taken up on 02.05.2022. I.A. No. 3022/2022 was preferred by the BSIDC with a prayer to transfer the case records of this case to N.C.L.T, Kolkata in exercise of discretionary power of this Court under section 434(1)(c) of Companies Act, 2013.

9. The chronology of events in the last one and half year shows that despite sincere efforts made on the part of the Official Liquidator and indulgences granted by this Court, actual bidding process could not take place primarily due to intervention of Covid and other bidders backing out at the different points of time. The situation as it stands today is that Al Sifah Minerals Private Limited is still in the fray. Two more parties have filed intervention application. I.A. No. 4770/2022 has been filed by M/s R.A. Enterprises, Lucknow, Uttar Pradesh and I.A No. 3137/2022 has been filed by M/s Ennar Infotech Pvt. Ltd., Goregaon (W), Mumbai showing interest to participate in the bidding process. Learned counsel for both the parties Mr. Sharad Kaushal and Mrs. Chaitali C. Sinha pray that if request of these two parties are accepted, they would purchase the bid papers and submit their bids before the next date along with the demand draft and all other required documents.

10. Learned counsel for the Official Liquidator, learned senior counsel for the secured creditor Bank of India, learned senior counsel for the workmen and learned counsel for the BSIDC Mrs. Richa Sanchita all have agreed to the proposal of extension of cut-off date for submission of bids by one more occasion to hold the auction on any convenient date as the Court may deem fit and proper in order to ensure winding up of the company by sale of its assets. This approach is also in consonance with the principles of fair play and allowing opportunity to any other interested bidders to participate in the bidding process and make it more competitive.

11. Though sufficient extension of time has been granted earlier by this Court to ensure a fair and competitive bidding process, but due to the circumstances discussed in detail in the foregoing paragraphs, the actual auction could not take place till date. Meanwhile, the assets of the Company are still lying awaiting liquidation. Taking into account all these facts and circumstances, this court is inclined to extend the cut-off date for submission of bid by one more week till 17.06.2022. Learned Official Liquidator shall issue corrigendum to that effect in the official website of the Ministry of Corporate Affairs by Monday. Interested bidders including interveners may purchase the

bid documents and submit their bid with demand draft by the cut-off date. Other required documents shall also be submitted on or before the date of the bidding process. Bids will be opened on 24.06.2022 in open court.

12. List the case on 24.06.2022.

(Aparesh Kumar Singh, J) Ranjeet/