[Cites 5, Cited by 0]
Madhya Pradesh High Court
Bci Staff Colony Residents Welfare ... vs The Official Liquidator on 10 April, 2026
Author: Vijay Kumar Shukla
Bench: Vijay Kumar Shukla
NEUTRAL CITATION NO. 2026:MPHC-IND:9753
1 COMA-10-2026
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIJAY KUMAR SHUKLA
&
HON'BLE SHRI JUSTICE ALOK AWASTHI
ON THE 10th OF APRIL, 2026
COMPANY APPEAL No. 10 of 2026
BCI STAFF COLONY RESIDENTS WELFARE ASSOCIATION
THROUGH ITS PRESIDENT MR. DEEPAK SHRIVASTAVA
Versus
THE OFFICIAL LIQUIDATOR AND OTHERS
Appearance:
Shri Manoj Munshi - Senior Advocate assisted by Shri Lucky Jain -
Advocate for the appellant.
Shri H.Y. Mehta - Advocate for the respondent No.1.
Shri Piyush Mathur - Senior Advocate assisted by Shri Abhinav
Malhotra & Shri Mukesh Saini - Advocates for the respondent No.2.
ORDER
Per: Justice Vijay Kumar Shukla
Heard on I.A. No.3939/2026, which is an application for leave to
appeal under Section 483 of the Companies Act, 1956 read with Rule 9 of
the Companies Rules, 1959.
2. The applicant has sought leave to appeal to challenge the order
dated 09.02.2026 passed by the Company Judge in Company Petition
No.12/2004 (In Ref:-M/s Bharat Commerce and Industries Ltd., in
liquidation), whereby the intervention application preferred by the applicant
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has been dismissed.
3. Considering the submission of counsel for the applicant that he had
filed an application for intervention as a bidder by enhancing the bid amount
and in absence of any opposition to the same, I.A. No.3939/2026 is allowed.
4. The present company appeal is filed under Section 483 of the
Companies Act, 1956 challenging the orders dated 27.09.2025, 09.02.2026
and 16.03.2026 passed by the learned Company Judge in Company Petition
No.12/2004, whereby the higher offers made for purchase of the subject
property were disregarded and the sale was ultimately confirmed in favour of
M/s Kalindi Associates at Rs.35 Crores despite its failure to comply with
auction conditions.
5. The facts of the case, in brevity, are that the appellant / B.C.I. Staff
Colony Residents' Welfare Association has been actively involved in
litigation concerning the subject property since 2004, including proceedings
before the Punjab & Haryana High Court and the Hon'ble Supreme Court
and is, therefore, a stakeholder in ensuring a fair and transparent sale
process. In the auction proceedings, respondent No.2, M/s Kalindi
Associates, emerged as the highest bidder (H-1) with a bid of Rs.31 Crores;
however, the said bidder failed to deposit the balance sale consideration
within the stipulated time and remained in default for over 14 months.
6. Subsequently, a higher offer of Rs.35 Crores was submitted by M/s
Maa Sharda Oils, which reflected the prevailing market conditions and was
significantly above the bid of respondent No.2. Despite the failure of
respondent No.2 to comply with the payment terms and the availability of a
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higher offer, the learned Single Judge, vide order dated 27.09.2025, rejected
the offer of Rs.35 Crores and granted an additional opportunity to respondent
No.2 to match the said amount.
7. The appellant thereafter filed I.A. No. 11196/2025 seeking
intervention and consideration of its offer, which was initially Rs.35 Crores
and subsequently enhanced to Rs.42 Crores, in order to secure a higher
realization from the sale of the Company's assets. However, vide order dated
09.02.2026, the said application was dismissed without adequately
considering the enhanced offer or the principles governing maximization of
value in liquidation proceedings. Thereafter, by order dated 16.03.2026, the
sale in favour of respondent No.2 has been confirmed after a prolonged delay
of approximately 14 months and further an additional 60 days time was
granted to deposit the balance sale consideration.
8. The appellant submits that the subject property, as per the prevailing
Collector Guideline Rates of 2025, is valued at approximately Rs.47.22
Crores, and the proposed sale at Rs.31-35 Crores is grossly undervalued and
contrary to the object of public auction. The appellant is ready and willing to
deposit the entire consideration in accordance with the prevailing valuation,
and the impugned orders have resulted in serious financial prejudice to the
stakeholders and defeat the very purpose of liquidation proceedings.
9. Shri Manoj Munshi, learned senior counsel for the appellant argued
that the appellant has been a consistent and bona fide participant in the
proceedings since 2004, having entered the fray at the initial stage with a
higher offer and having pursued its rights through successive proceedings,
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including before the High Court and the Hon'ble Supreme Court. It is argued
that the Hon'ble Supreme Court, while disposing of the earlier round of
litigation, expressly mandated that the official liquidator must take all
reasonable steps to secure the optimum value of the property, which
direction governs the present controversy.
10. Learned senior counsel further argued that the subsequent
valuation placed the fair market value substantially higher than the auction
price, yet the e-auction resulted in a bid far below such valuation, indicating
a failure to achieve proper price discovery. It is further submitted that despite
higher offers being made, including by the appellant, such offers were
rejected and instead the highest bidder was permitted to match the same,
thereby stifling competition and undermining the objective of maximizing
value. He argued that the dismissal of the appellant's application on the
ground of non-participation is factually erroneous and overlooks the
appellant's continuous involvement and earlier successful litigation.
11. It is submitted that the impugned order is non-speaking and
ignores material valuation reports as well as the appellant's higher offer,
thereby violating principles of natural justice. He further submits that the
confirmation of sale at a price significantly below the prevailing market
value is contrary to the mandate of securing optimum value and results in
substantial loss to the estate of the company in liquidation. On the aforesaid
grounds, it is submitted that the impugned orders are unsustainable in law
and warrant interference to ensure a fair and value-maximizing process.
12. In support of his contention, learned senior counsel for the
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appellant has placed reliance on the judgment passed by the Hon'ble Apex
Court in the case of Om Sakthi Sekar vs. V. Sukumar & Ors., 2026 INSC
237, State of Uttar Pradesh and Anr. v. Virendra Bahadur Katheria and Ors.
[Special Leave to Appeal (C.) No.7130/2024] and orders dated 18.07.2023 &
04.12.2023 passed by the High Court of M.P. in the case of In Ref:-M/s
Bharat Commerce v. Industrial Ltd. [Company Petition No.12 of 2004].
13. Learned senior counsel for the appellant relied on the judgment
passed by the Hon'ble Supreme Court in the case of Om Sakthi Sekar (supra)
and submitted that even after the confirmation of the sale, the Court can still
interfere if the valuation and the bid amount is not appropriate.
14. Shri Piyush Mathur, learned senior counsel for the respondent No.2
and Shri H.Y. Mehta, learned counsel for the respondent argued that the
intervention application of the other interveners i.e. M/s Maa Sharda Oils and
M/s Jot Developers were rejected by order dated 27.09.2025. Against the
said order, Special Leave Petition (Civil) Diary No(s).58507/2025 (Maa
Sharda Oils v. M/s Bharat Commerce and Industries Ltd. J& Ors.) was filed
by Maa Sharda Oils, which was dismissed by order dated 10.11.2025.
Appellant filed an I.A.11196/2025 on 12.11.2025, immediately after
dismissal of aforesaid SLP. By order dated 09.02.2026, the said I.A. was
dismissed. He argued that the application filed by the appellant was nothing
but a sponsored application at the instance of the other interveners, who had
not succeeded upto the Hon'ble Supreme Court. It is further argued that in
view of the judgment passed by the Hon'ble Supreme Court, against the same
order and the property has already been auctioned and the sale has also been
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confirmed, the appeal is liable to be dismissed.
15. After hearing learned counsel for the parties and going through the
record, we find that the learned Company Judge has considered the
application filed by the appellant as I.A. No.11196/2025 and rejected the
same recording the following reasons:
"8 . This is an application filed by BCI Staff Colony Residents' Welfare
Association. A close scrutiny of the application would show that it is
almost identically worded with the aforesaid application
I.A.No.11195/2025.
9. Earlier, the BCI Staff Colony did not raise any objection. It was very
much present at all times when the process of auction was being carried
out. It neither participated in the auction nor raised any objection at any
stage. It is only after this Court passed order dated 27.09.2025 thereby
rejecting the proposal of a complete stranger i.e. Maa Sharda Oils and
when the order of this Court attained finality in view of the dismissal of
SLP by the Hon'ble Apex Court, as stated hereinabove, this intervention
application has been filed along with intervention application of Jot
Developers."
16. We have also taken note of the reasons assigned by the learned
Company Judge while rejecting the intervention applications of the other
interveners by order dated 27.09.2025, especially, in Para 43 to 47, where the
Company Judge had taken into consideration the following judgments passed
by the Hon'ble Apex Court : Navalkha & Sons v. Ramanya Das, (1969) 3
SCC 537, Vedica Procon (P) Ltd. v. Balleshwar Greens (P) Ltd., (2015) 10
SCC 94 and Valji Khimji and Company v. Official Liquidator of Hindustan
Nitro Product (Gujarat) Limited and Others, (2008) 9 SCC 299 and has held
that he did not find any fraud and procedural lapse in the conduct of the
auction and as per the judgment of the Hon'ble Supreme Court, if there is no
fraud in the auction sale and the bid has already been finalized, culminating
into a contract, there cannot be any interference and a valid contract has to be
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honored between the parties. In the present case, the appellant had applied
for intervention with the higher bid, only after the dismissal of SLP by the
other interveners.
17. In view of the above and also the order passed by the Hon'ble
Supreme Court, whereby the similar order has been affirmed dismissing the
Special Leave Petition (Civil) Diary No(s).58507/2025 (supra) on the ground
that the appellant had not participated in the auction, we do not find any
ground to interfere with the impugned orders.
18. With the aforesaid, The Company Appeal is dismissed. No order
as to costs.
(VIJAY KUMAR SHUKLA) (ALOK AWASTHI)
JUDGE JUDGE
Divyansh
