ORDER
D.V. Shylendra Kumar, J.
1. C.A. 1043/02 filed in Company Petition No. 68/97 is by a person who had offered to buy the assets of the company under litigation and which had been advertised for sale as per a paper publication carried in Times of India, News Daily of Bangalore Edition on 28-3-2002. The applicant who had responded to this and who had offered the highest bid amount of Rs. 365 lakhs had, subsequent to certain negotiations etc., increased this offer to Rs. 375 lakhs. The sale itself was being conducted pursuant to the permission granted by this Court on 11-3-2002 permitting the Official Liquidator to sell the properties of the Company namely M/s. Swede (India) Teltronics Limited, which had been ordered to be wound up by this Court by an order passed on 27-1-2000.
2. The paper publication reads as under :–
“Office of the Official Liquidator.–Attached to High Court of Karnataka, Bangalore.
Notice of Public Auction.–The movable and immovable assets belongs to M/s. Swede (India) Teltronics Ltd. (In liquidation) which include Lot. I, Land & Factory building: Land: 4.5 acres of land situated in Plot No. 131/1, 132/2, 132/3, 132/4 located at Hoody Village, Whitefield Road, Mahadevpura (PO) K.R. Puram Hobli, Bangalore – 560 048. Building: Factory building R and D Block and Testing House Generator Room.
Lot II – Plant & Machinery.–Schlatter make welding machine with feeding unit, Air condition unit, injunction moulding machines. 125 KVA DG set and Furnitures and Fixtures etc.
Lot III – Current Assets: Stock/Inventories, etc. – Will be sold through Public Auction at 2.30 p.m. on 13-4-2002 if necessary on 15-4-2002 at Plot No. 131/1, 132/2, 132/3, 132/4 located at Hoody village, Mahadevpura (PO) Whitefield Road, Bangalore as per the orders of the Honourable High Court of Karnataka. Sale is subject to the confirmation of the Honourable High Court. Each of the participating bidder/buyer will have to deposit towards EMD: Rs. 6,86,600 for entire assets or Rs. 5,75,500 for land and building, Rs. 80,000 for plant and machinery and Rs. 31,600 for current assets by way of Demand Draft in favour of the Official Liquidator, High Court of Karnataka, before they participate in the auction for the purpose of bidding the assets of the company in liquidation. Official Liquidator, High Court of Karnataka reserves the right to cancel or reject the highest offer or cancel the auction without assigning any reasons. For inspection of the assets and terms and conditions of auction contact the Official Liquidator’s representative at the factory premises of the Company in liquidation between 11.30 a.m. to 4.00 p.m. on 6-4-20002.
Sd/- B.N. Harish,
Official Liquidator,
[IV Floor, D & F Wing, Kendriya Sadan, Koramangala, Bangalore –
560 034.”
3. The applicant, who has only made Earnest Money Deposit (‘EMD’ for short) of a sum of Rs. 6,86,600 has not made any payment at all though has offered a price of Rs. 375 lakhs in respect of the property and as per the terms and conditions of sale, the highest bidder was required to deposit 25 per cent of the amount within seven days and the balance within the next sixty days. Though the terms and condition of the sale which are as under :–
“Terms and conditions for sale of assets of M/s. Swede (India) Teltronics Ltd. (In liqn.) situated at Plot Bearing No. 131/1, 132/2, 132/3, 132/4 Located at Hoody Village Whitefield Road, Mahadevpura (PO), Bangalore:
1. Sale is through public auction.
2. Public auction is for the sale of factory of above cited company all assets on “As is where is and whatever there is basis” as per the direction of the Honourable High Court of Karnataka. The public auction will be conducted lotwise as under :
Lot I – Land & Factory Building :
Land : 4.5 acres of land situated at Plot No. 131/1, 132/2, 132/3, 132/4 located at Hoody Village, Whitefield Road, Mahadevpura (PO), Bangalore.
Lot II – Plant & Machinery:
Schlatter make welding machine with feeingment, Air condition unit, Injunction Moulding machines, 125 KVA DG Set, etc.
Lot III – Current Assets: Stock/Inventories, Furnitures and Fixtures etc.
3. Sale is ‘As is where is and whatever there is basis’ and the Official Liquidator does not give guarantee on the working ability of Plant and Machinery etc. The Factory is at present lying closed pursuant to the winding up order passed by the Honourable High Court of Karnataka and is in the possession of the Official Liquidator, attached to the High Court of Karnataka.
4. Persons who are interested to participate in auction shall deposit Earnest Money Deposit (EMD) as mentioned in the notice of Public Auction.
5. Bank draft towards EMD shall be drawn in favour of the Official Liquidator, High Court of Karnataka, Bangalore.
The, EMD will be adjusted towards bid amount in case of successful bidder. Particulars of reserve price/floor price as under :
Reserve/Floor Price (Rs. in lakhs)
Lot I: Land and Factory Building 230.00
Lot II: Plant & Machinery 32.00
Lot III: Current Assets 12.64
6. Inspection of land of Land assets would be given … on between 11.00 a.m. to 4.00 p.m. at the factory premises at No. 131/1, 132/2, 132/3, 132/4 located at Hoody Village, Whitefield Road, Mahadevpura (PO), Bangalore.
7. The Official Liquidator/Court reserves the right to accept or reject any offer without assigning any reason thereof.
8. The Official Liquidator/Court reserves the right to alter/modify such terms and conditions of tender/orders without assigning any reason thereof.
9. That the sale is subject to the confirmation of the Honourable High Court of Karnataka.
10. The successful tenderer/Offerers shall have to prepare sale deed and shall have to bear all the expenses thereof including stamp duty, sale tax, property tax due and any other statutory dues payable to local authorities as the case may be.
11. That in case of default by the successful bidder/offerer the entire amount so deposited shall be forfeited and the successful tenderer/ offerer shall also be further liable to pay the loss so suffered by the company on account of his backing out.
12. That the successful bidder shall have to deposit 25 per cent of the bid money within 7 days from the date of intimation of acceptance of the highest bid and confirmation of sale by the Honourable High Court of Karnataka at Bangalore and balance 75 per cent within 60 days thereof.
13. That the HMD shall not carry any interest and shall also be liable for forfeiture in case of default by the successful bidders.
14. The Rule of Caveat Emptor shall be applicable.”
stipulated that 25 per cent of the amount was required to be paid, within seven days and the balance in sixty days as per an order passed by this Court on 27-9-2002, the time for such payment had obviously been extended and in fact this date was taken to be the starting point for such period and the amount of 25 per cent of the sale price was required to be deposited within seven days from this date and the balance within sixty days thereafter.
4. The present application is filed on 30-10-2002 seeking for two prays -one is (a) to Direct the Official Liquidator to approach the appropriate authorities and get it clarified or modified the status of the Land mentioned in the Schedule as Industrial Land and furnish the same to Applicant to make payment and other is (b) to consequently extend the time granted under the Order on OLR No. 113/02 dated 27-9-2002 in Co. P. 68/97 to make payment till the status of the lands are clarified as Industrial land by the Competent Authorities in the interest of justice.
5. The submission of Sri Krishnamurthy, learned Counsel for the applicant is that the applicant had, subsequent to the paper publication, occasion to peruse the documents available with the Official Liquidator indicating the nature of the land and the documents of title in respect of the property in question and that the unmistakable impression is that the land, which is part of the assets sold, is an industrial land and it is on such premise the price had been offered. The further submission is that the applicant had come to know subsequently on or around 5-10-2002 that the land in question comes within the park area as indicated in the Comprehensive Development Plan and some portions of it may also fall within a semi-public area. It is the version of the applicant as stated in para 4 of the application that the applicant had in fact issued a cheque dated 4-10-2002 for a sum of Rs. 93,75,000 towards 25 per cent of the bid amount, but on coming to know that the land in question had been indicated as for other purpose in the Comprehensive Development Plan, he had submitted a letter to the Official Liquidator on 7-10-2002 requesting him not to present the cheque and that the applicant will move the Court etc.
6. It is of interest to know that these are all developments which are narrated and said to have taken place subsequent to the order passed by this Court as on 27-9-2002 in the presence of the applicant. Learned Counsel submits that it is in this context that the directions as sought for in prayer (a) is required to be issued and that this Court should also extend the time for payment of the amount till the status of the lands are classified as an industrial land and by the competent authority.
7. I have heard Sri Deepak, learned Counsel for the Official Liquidator and also perused the reports in this context submitted by the Official Liquidator.
8. The prayer sought for by the applicant cannot be granted for more than one reason.
9. In the first instance, what was being sold was the assets of a company under liquidation. It so happens that the Official Liquidator is put in charge of the winding up proceedings under the Companies Act and it is the duty of Official Liquidator to realise the assets of the company to ensure that it is made available to the creditors and the members of the Company and in an equitable manner. When the Company cannot carry on its activities in the manner that it has professed and is unable to carry on its activities for any reason, the Company should be wound up and it is in such proceedings the Official Liquidator comes on the scene and functions under the supervision of the Court. The Official Liquidator simply comes into possession of the assets of a company under liquidation. The Official Liquidator neither knows of the character of the properties no can he guarantee for any particular user of the property. In fact the Paper Publication and the terms and conditions of sale makes it abundantly clear that the assets of the company that are being sold, are being sold in “As is and Where is condition” and without any obligation or responsibility on the part of the seller, ie., the Official Liquidator acting on behalf of the Court. The purchasers are not only expressly put on notice about these conditions but are also abundantly impressed upon that any property that they are buying, they are buying at their risk and on the basis of “as is where is condition”. The only requirement on the part of the Official Liquidator is to receive the price amount offered and hand over the assets in respect of which the amount is tendered and execute necessary documents in this regard. The functions of the Official Liquidator does not go beyond this.
10. As to whether a particular land which was being used by the company and for industrial purpose is really so or whether that it has been earmarked for any other purpose by any other authority or as to whether such land is sought to be developed or acquired for any other purpose, are all not matters either within the knowledge of the Official Liquidator or under his control. This is precisely the reason as to why a purchaser is put on notice that it is for him to offer the price on ascertaining all matters and they can get the property on ‘as is where is’ condition and nothing more. May be the buyer will be in a position to make use of the property as an industrial land or may not be. These are all not matters which concerns either the Court or can the Court direct the Official Liquidator to ensure that the character of land is retained in a particular manner and further direct the Official Liquidator to move the other authorities to impart such character to the land. What character the land has, it has and nothing more. At any rate, the prayer as sought for in prayer (a) is not one that can be granted by the Company Court for directing the Official Liquidator to perform certain acts which are not contemplated for the purpose of his function as a person incharge of the proceedings of the company under liquidation.
11. Prayer (b) is a prayer which in effect means to permit the applicant to pay the amount at a future indefinite point of time. In fact when prayer (a) is rejected, the further question does not arise.
12. The applicant in fact is a defaulter in the first instance. The applicant-defaulter, though got cautioned once earlier by the order passed by this Court on 27-2-2002, thereafter there cannot be any excuse on the ground that the land user may not be for industrial purpose etc. as per the C.D.P.
13. The applicant has not shown his bona fides at all. Applicant has not made any payment so far in respect of the price amount for the assets. The question of extending the time in such circumstances does not arise at all. Though the sale in favour of the applicant had been confirmed by this Court as per an order, the applicant having not complied with the basic requirement of paying the price, the sale in favour of the applicant is cancelled.
14. The Official Liquidator is directed to take steps to have the property advertised for fresh sale on the terms and conditions as had already been indicated by this Court.
15. Company application is rejected.