P.Anantharajan vs Official Liquidator
2021 Latest Caselaw 9650 Ker

             IN THE HIGH COURT OF KERALA AT ERNAKULAM

                              PRESENT

             THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR

                                 &

          THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN

     TUESDAY, THE 23RD DAY OF MARCH 2021 / 2ND CHAITHRA, 1943

                       Co.Appeal.No.1 OF 2021

      AGAINST THE ORDER DATED 18.02.2021 IN C.A.NO.1/2021 IN
              C.P.NO.2/1996 OF HIGH COURT OF KERALA


APPELLANT/APPLICANT:

             P.ANANTHARAJAN, AGED 58 YEARS
             S/O.PERIYASAMY, NO.7, HAPPY HOMES,
             SIVANAGAR, 1ST MAIN ROAD, RAMALINGA NAGAR,
             TRICHY, TAMIL NADU, PIN 620 003

             BY ADV. SMT.BINDU GEORGE

RESPONDENT/RESPONDENTS:

      1      OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA,
             COMPANY LAW BHAVAN, THRIKKAKARA P.O.,COCHIN 21,
             (M/S. PREMIER CABLE COMPANY LIMITED) IN LIQN)

      2      M/S.UCO BANK, ERNAKULAM BRANCH,
             CLOTH BAZAR ROAD, ERNAKULAM PIN 682 031.

              R1 BY ADV.SRI.K.MONI
              R2 BY ADV.H.RAMANAN, SC FOR UCO BANK

     THIS COMPANY APPEAL HAVING BEEN FINALLY HEARD ON 05-03-2021,
THE COURT ON 23-03-2021 DELIVERED THE FOLLOWING:
 Co.Appeal.No.1 OF 2021      ..2..




                          JUDGMENT

Dated this the 23rd day of March 2021

MURALI PURUSHOTHAMAN,J.

The challenge in this appeal is against the order

dated 18.02.2021 in C.A.No.1/2021 in C.P.No.2/1996 of

the Company Court. The appellant participated in the

auction held by the Official Liquidator for the sale of

5670 kilograms of copper ingots of M/s. Premier Cables

Company Limited (in liquidation). The appellant was the

highest bidder.

2.The Official Liquidator filed Report No.195 in C.P.

No.2/1996 on 26.08.2019 for confirmation of sale in

favour of the appellant. The learned Company Judge by

order dated 31.10.2019 confirmed the sale. Accordingly,

the Official Liquidator as per Annexure-R2 Co.Appeal.No.1 OF 2021 ..3..

communication dated 22.11.2019 (Annexures referred to

hereinafter in this judgment are the Annexures produced

along with and marked as such in, the Statement filed by

the Official Liquidator in C.A. No. 01/2021) informed the

appellant that the sale has been confirmed in favour of

the appellant and the appellant was called upon to remit

the balance sale consideration of Rs.20,81,920/- along

with 18% GST by way of Demand Draft in favour of the

Official Liquidator within 30 days from the date of order

of confirmation by the Court as per the terms and

conditions of the sale.

3. Meanwhile, by Annexure-R3 letter dated

14.11.2019 sent through his counsel, the appellant

informed the Official Liquidator that he was not

informed whether he is the successful bidder and

demanded return of EMD of Rs.50,000/-. On receipt of

Annexure-R2 communication dated 22.11.2019 of the Co.Appeal.No.1 OF 2021 ..4..

Official Liquidator regarding confirmation of sale, the

appellant sent Annexure-R4 letter stating that he

received Annexure-R2 letter of the Official Liquidator on

26.11.2019 and that he is not intending to proceed with

the sale and requested for return of EMD.

4.In reply to Annexure-R4 letter, the Official

Liquidator, by Annexure-R5 letter dated 06.12.2019

informed the appellant that, immediately on receipt of

the copy of the order confirming the sale, the appellant

was put on notice regarding the sale confirmation in

favour of the appellant vide Annexure-R2 and inviting

the attention of the appellant to the terms and

conditions of the tender, requested the appellant to

remit the entire balance sale consideration without

further delay.

Co.Appeal.No.1 OF 2021 ..5..

5.Since the appellant did not remit the balance sale

consideration, the Official Liquidator by Annexure-R6

letter dated 07.02.2020 informed the appellant that the

EMD of Rs. 50,000/- is forfeited in accordance with

clauses 7(g) and (h) of Annexure-R1 terms and

conditions of the tender accepted by the appellant.

6. The appellant filed Company Application

No.75/2020 to set aside Annexure-R6 letter of the

Official Liquidator whereby the EMD was forfeited.

7. The appellant also filed Company Application

No.76/2020 for direction to allow the appellant to remit

the balance sale consideration in two installments within

3 months from the date of order after deducting the

amount of Rs.50,000/- deposited as EMD.

8. The learned Company Judge by common order

dated 23.09.2020 dismissed both the above applications Co.Appeal.No.1 OF 2021 ..6..

observing that the said applications were filed only on

22.09.2020 with inordinate and unexplained delay and

by the time the Court had already allowed the Official

Liquidator to re-tender the sale of copper ingots.

9. After the dismissal of C.A.Nos.75 and 76 of

2020, the appellant filed Company Application

No.78/2020 for direction for refund of EMD. During the

pendency of the said Company Application, the appellant

filed petition to review the common order dated

23.09.2020 in C.A. Nos. 75 and 76 of 2020 and the same

was numbered as R.P. No.860/2020. The contention in

the Review Petition was that the Counsel could not

advance certain contentions while hearing the said

applications.

10. During the pendency of the C.A.No.78/2020 and

R.P.No.860/2020 the appellant filed Company Application

No. 01/2021 for direction to confirm the sale in favour of Co.Appeal.No.1 OF 2021 ..7..

the appellant as 'directed' by the Court on 09.12.2020.

In the affidavit filed in support of the said Company

Application, it is stated by the appellant that when C.A.

No. 78/2020 was pending, the Court, after considering

all the relevant materials and monitory aspects directed

the appellant to deposit an amount of Rs. 21,81,920/-

which include the forfeited EMD of Rs. 50,000/-. In

paragraph 9 of the said affidavit, it is stated that there

was an oral direction by the Court on 09.12.2020 to

deposit the said amount with the Official Liquidator

within one week. The appellant has further stated that in

accordance with the said direction the appellant

remitted an amount of Rs. 21,31,920/- on 16.12.2020

and prayed for confirming the sale in favour of the

appellant as 'orally directed' by the Court on 09.12.2020.

11. From the records of the case in R.P. No

860/2020, we find that the Learned Company Judge, who Co.Appeal.No.1 OF 2021 ..8..

heard the Company application on 29.01.2021, having

regard to the averments in the affidavit and submission

made on behalf of the appellant, passed an order

directing the Registry to place the matter before the

Hon'ble the Chief Justice for appropriate orders for

posting C.A. No. 1/2021 and R.P. No.860/2020 before the

learned Judge before whom it was listed on 09.12.2020.

Accordingly, C.A. No. 1 of 2021 and R.P. No.860/2020

were posted and thereupon, on 18.02.2021, the learned

Company Judge dismissed C.A. No.1/2021 in C.P.

No.2/1996 and the present Company Appeal has been

filed against the same. R.P.No.860/2020 was also

dismissed by separate order. The Learned Company

Judge while dismissing the Company Application No. 1/

2021 observed; "I find from the order sheet that no

orders have been passed by this Court permitting

petitioner to remit the amount. In the facts and Co.Appeal.No.1 OF 2021 ..9..

circumstances, there was no reason to issue any oral

direction as well. Furthermore, the Official Liquidator

had filed an application before this Court seeking to re-

tender the sale of ingots and the same has already been

allowed. The order passed by the Official Liquidator

forfeiting the EMD also stands unchallenged. The

mischief is apparent as the petitioner has gone to the

extent of contending that the amount ordered to be paid

is inclusive of the EMD, which has already been

forfeited. This is a fit case wherein exemplary cost is to

be imposed. However, considering the submission of

Smt.Bindu George, I refrain from doing so. Annexure-A1

demand draft shall be returned to the petitioner

forthwith".

12. Heard the learned Counsel for the appellant and

the respondents.

Co.Appeal.No.1 OF 2021 ..10..

13. It can be seen that the appellant is not having a

consistent stand before the Court. By Annexure-R3 he

requested for return of EMD on the ground that he has

not been intimated as to whether he is the successful

bidder. After receiving Annexure-R2 communication

from the Official Liquidator regarding confirmation of

sale also the appellant by Annexure-R4 informed the

Official Liquidator that he is not intending to proceed

with the sale and requested for return of EMD. The

appellant filed Company Application No.75/2020 to set

aside Annexure- R6 letter of the Official Liquidator

whereby the EMD was forfeited. The appellant then

turned around and filed C.A. No.76/2020 for direction to

allow the appellant to remit the balance sale

consideration in two installments within 3 months from

the date of order after deducting the amount deposited

as EMD. Later, the appellant filed C.A. No.78/2020 for Co.Appeal.No.1 OF 2021 ..11..

direction for refund of EMD.Still later, C.A. No. 01/2021

was filed for direction to confirm the sale in favour of the

appellant as 'directed' by the Court on 09.12.2020. The

appellant cannot take inconsistent positions before the

Court .

14. The appellant did not avail of the opportunity to

remit the balance sale consideration within the time

granted and did not seek extension of time to deposit the

balance sale consideration. On the contrary, the only

request of the appellant was for return of the EMD.

Since the balance sale consideration was not remitted,

the EMD was forfeited on 07.02.2020. The Court also

allowed the Official Liquidator to re-tender the sale of

copper ingots. Long after the forfeiture of the EMD, on

22.09.2020, the appellant comes up with applications to

set aside Annexure-R6 letter dated 07.02.2020 whereby

the EMD was forfeited and to allow the applicant to Co.Appeal.No.1 OF 2021 ..12..

remit the balance sale consideration in installments. This

exercise, appears to us as without any bonafides. As

rightly pointed out by the learned Company Judge, no

explanation is offered by the appellant for the long delay

in approaching the Court.

15. Things did not stop there. The appellant at this

juncture comes up with C.A. No.1/2021 stating that, in

accordance with the oral direction of the learned

Company Judge on 09.12.2020, the appellant remitted

an amount of Rs. 21,31,920/- on 16.12.2020 and prayed

for confirming the sale in favour of the appellant. The

learned Company Judge referring to the order sheet,

which is sacrosanct, observed that no orders have been

passed by the Court permitting the appellant to remit

the amount. The learned Company Judge also observed

that in the facts and circumstances, there was no reason

to issue any oral direction as well. The EMD was already Co.Appeal.No.1 OF 2021 ..13..

forfeited and was not interfered with. The learned

Company Judge is right in observing that the mischief is

apparent as the appellant had gone to the extent of

contending that the amount ordered to be paid is

inclusive of the EMD, which had already been forfeited.

The learned Company Judge took a very lenient view and

refrained from imposing cost.

16. Things did not stop there too. In the

memorandum of company appeal, it is reiterated by the

appellant that, when the review petition as well C.A

No.78/2020 came up for consideration on 08.12.2020,

the learned Company Judge orally directed the appellant

to remit the sale consideration and it is with the

authority of law, the appellant remitted the sale

consideration on 16.12.2020.

17. On perusing the order sheet of this Court in

C.A.No.78/2020 and R.P. No.860/2020, we find that there Co.Appeal.No.1 OF 2021 ..14..

was no posting of the above cases on 08.12.2020,

whereas, the above cases were posted on 09.12.2020

before the learned Company Judge. In the affidavit filed

in support of C.A. No.1/2021, it is stated that the

direction to remit the amount was issued on 09.12.2020.

It was further averred that the same was an oral

direction. The learned Company Judge has categorically

stated that no oral direction was issued by the Court.

We agree with the finding of the learned Company Judge

that the contention of the appellant that the Court had

orally directed the appellant to remit the amount is

clearly an attempt to resuscitate the C.A.Nos. 75 and 76

of 2020, which were already dismissed. Copper does not

rust; but the appellant has come to Court with rusted

hands.

18. Before parting with this appeal, we have to

advert to one ground taken by the appellant that the Co.Appeal.No.1 OF 2021 ..15..

copper ingots if sold in re-auction would not fetch more

price than what was quoted by the appellant and

remitted with the Official Liquidator, as according to the

appellant the market of copper ingots is down day to

day. After resiling from the offer after acceptance and

after confirmation of sale and forfeiture of EMD, the

appellant cannot be heard to raise such a contention. It

is true that the auction has to fetch maximum price as it

has to take care of the interests of various stakeholders

who are entitled for the distribution of the proceeds of

the sale of the assets of the company in liquidation.

Apart from the statement of the appellant in the appeal

memorandum, there are no other materials before this

Court to infer that a re-auction would not fetch more

price than what was quoted by the appellant. Further,

the appellant cannot be permitted to take advantage of

his own wrong. The Company Court would not confirm Co.Appeal.No.1 OF 2021 ..16..

the sale on re-auction, if best prices are not secured.

Therefore, the said contention of the appellant is only to

be rejected. Though we are also of the view that this is a

fit case where exemplary cost is to be imposed, taking a

lenient view, we refrain from doing so.

The appeal is accordingly dismissed.

Sd/-

C.T.RAVIKUMAR JUDGE

Sd/-

MURALI PURUSHOTHAMAN, JUDGE SB

//TRUE COPY //

P.A TO JUDGE