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OJA/75/2010 11/ 11 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
O.J.APPEAL
No. 75 of 2010
In
OFFICIAL
LIQUDATOR REPORT No. 66 of 2010
In
OFFICIAL LIQUDATOR REPORT No.
227 of 2008
For
Approval and Signature:
HONOURABLE
MR.JUSTICE JAYANT PATEL
HONOURABLE
MR.JUSTICE J.C.UPADHYAYA
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
M/S.
CRYSTAL EQUITIES LIMITED - Appellant(s)
Versus
OFFICIAL
LIQUIDATOR OF M/S. GUJARAT SMALL INDUSTRIES CORP.LT & 11 -
Opponent(s)
=========================================================
Appearance
:
MR.BHASH
H MANKAD for
Appellant(s) : 1,
OFFICIAL LIQUIDATOR for Opponent(s) : 1,
MS
AMEE YAJNIK for Opponent(s) : 1,
None for Opponent(s) : 2 -
12.
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
and
HONOURABLE
MR.JUSTICE J.C.UPADHYAYA
Date
: 03/02/2011
ORAL
JUDGMENT
(Per : HONOURABLE
MR.JUSTICE JAYANT PATEL)
The
present appeal arises against the order dated 1.10.2010 passed by
the learned Company Judge in OLR No.66/2006, whereby the direction
has been issued for forfeiture of the EMD of the appellant herein,
who was one of the offerers before the Sale Committee as well as
before the learned Company Judge.
The
relevant facts appear to be that for the properties of M/s.Gujarat
Small Industries Corporation Limited (hereinafter referred to as
‘the Company in liquidation’ for short), steps were taken by the
Official Liquidator (OL) for realization of the money by sale of the
properties. Out of various lots, for Lot No.III, the appellant
together with the other offerers, in response to the advertisement
issued by the OL, had submitted offer. At the relevant point of
time, the EMD was of Rs.7 lac and when the report was submitted
before the Company Court for confirmation, the highest offer
submitted by the Appellant was of Rs.1.43 crore for Lot No.III of
the properties of the Company in liquidation. Since we are not much
concerned with the other properties comprising of different lots,
except Lot No.III, the said aspect would not be much relevant, save
and except while dealing with the contentions of the learned Counsel
for the appellant, as and when required.
It
appears that thereafter, the OL submitted the report for
confirmation of the offers of various Lots being OLR No.66 of 2010.
Such aspects came to be considered by the learned Company Judge on
20.8.2010 and the learned Company Judge found that so far as Lot
No.III is concerned, the offer was quite low and, therefore, the
Court had shown disinclination to confirm the same, but further
directed the OL to issue a fresh advertisement essentially with a
view to make one more attempt to invite higher offer than the offer
received of Rs.1.43 crore of Lot No.III. It appears that thereafter
the OL, pursuant to the said order dated 20.8.2010 for Lot No.III
issued advertisement and intimated to the existing offerers also.
Thereafter, when the matter once again came up for hearing before
the learned Company Judge on 1.10.2010, it was found that there was
no offerer coming forward. Therefore, the only highest offer
remained was as that of the appellant and the second highest offer
was as that of Mr.M.S.Lohar of Rs.1.42 crore for Lot No.III. Since
the appellant herein declared before the learned Company Judge that
the appellant was not interested in purchasing the property, the
appellant withdrew the offer by backing out from the offer. Under
these circumstances, the learned Company Judge directed for
forfeiture of the EMD of the appellant and confirmed the next offer
of Rs.1.42 crore of Mr.M.S. Lohar. The appellant has no object so
far as the confirmation of the offer of Mr.Lohar at Rs.1.42 crore is
concerned, however, since the learned Company Judge directed for
forfeiture of the EMD of the appellant, the present appeal before
us.
We
have heard Mr.Unwala, learned Counsel appearing with Mr.Bhash Mankad
for the appellant.
The
first contention raised by the learned Counsel for the appellant is
that the learned Company Judge, when passed the order on 20.8.2010
in OLR No.66 of 2010 for Lot No.III, his offer was not confirmed
and, therefore, it can be said as the offer not accepted and in the
submission of the learned Counsel for the appellant, as the learned
Company Judge directed for issuance of fresh advertisement, it can
be said that a fresh advertisement de novo
was ordered and the earlier process undertaken for inviting offers
and the offers so submitted stood cancelled. In furtherance to the
submission, the learned Counsel attempted to rely upon the
observations made by the learned Company Judge at paragraph 5 in the
order dated 20.8.2010.
Prima
facie the contention appears to be attractive, but upon close
scrutiny, it appears that
the same is misconceived and even not on a correct factual premise.
In the order dated 20.8.2010
passed by the learned Company Judge, in OLR No.66/2010 at paragraph
5, it was, inter alia, observed as under:-
“5. So
far as Lot No. III is concerned I.e. Leasehold land of Plot No.1011
approximately 5000 Sq. Mtr. (remaining leasehold period as on
31.03.2010 – 83 years Approx.) situated at GIDC Industrial
Estate, Ankleshwar, Dist. Bharuch, there are two bidders before the
Court. Except them, no other bidder has come forward. The second
highest bidder has expressed its inability to make any further
offer. The offer of the first highest bidder before the Sale
Committee appears to be quite low and hence, the Court is not
inclined to confirm the same in favour of M/s. Crystal Equities
Limited. The Official Liquidator is, therefore, directed to issue a
short advertisement fixing the upset price of Rs.1.43 Crores and EMD
at Rs.15 Lacs. The inter-se
bidding for Lot No. III will take place before the Court on
03.09.2010. If any one is interested to participate in the inter-se
bidding, they should remain present only after payment of EMD and
late entry charges, if any.”
The
aforesaid order has to be read conjointly and it cannot be read in
isolation as sought to be
canvassed. The aforesaid order makes it clear that the Court did
show disinclination to confirmation the offer at that stage, but
simultaneously directed the OL to issue a fresh advertisement as
mentioned in the order. The Court did not finally decide not to
confirm the offer, but since the offer of the first highest offerer
i.e. the appellant herein before the Sale Committee was found by the
Court, at that stage, low, by way of an attempt to invite additional
offers, subsequent directions were issued. The aforesaid aspect is
apparent from the paragraph 11 of the very order, wherein the
learned Company judge has observed as under:-
“11. For
Lot No.III, the matter is adjourned to 03.09.2010.”
Meaning
thereby, the Court did not conclude the question of confirmation or
non-confirmation of the offer for lot No.III, but kept
the matter pending to be considered after the advertisement as
ordered was issued and the response thereof was placed before the
Court. Therefore, the contention of the learned Counsel cannot be
accepted and is on factually incorrect premise. Hence, deserves to
be rejected.
The
learned Counsel next contended that since in the very order at
paragraph 9 the learned Company Judge had directed for return of the
EMD to the unsuccessful bidders, the intention of not to confirm the
offer of the appellant was apparent. In our view, such contention
is also not only misconceived, but can
also be said as misdirected. The direction issued at paragraph 9 in
the said order is because of the fact that qua Lot No.V, offer of
one party was accepted and the offers of the other parties were not
accepted and, therefore, the Court had to direct for return of EMD.
Had the Court intended for return of EMDs of all the bidders of all
lots, the direction at para 11 would not have been there that for
Lot No.III, the matter was
adjourned to 3.9.2010. Under these circumstances, the contention
cannot be accepted.
The
learned Counsel next contended that the Condition No.27 would
not invest the power for forfeiture of the deposit under the present
circumstances and, therefore, the learned Company Judge could not
have directed for forfeiture of the
deposit.
In order to consider
the submission, Condition No.27 would be relevant and the same reads
as under:-
“27. The
offer shall not be entitled to withdraw or cancel his offer once
submitted. If the offerer withdraw or cancel his offer the Earnest
Money Deposit shall be liable to be forfeited and he will also be
liable to pay to the Official Liquidator the loss, damage suffered
consequent upon his backing out of their offer. The property/assets
in question will then be re-sold at the risk and consequences
of the offerer.”
The
aforesaid condition makes it abundantly clear that if the offerer
withdraws his offer, the earnest money deposit will be liable to be
forfeited and he will also be liable to pay OL, the loss or
damages suffered consequent upon his backing out from his offer. It
appears that so far as backing out from the offer is concerned, the
learned Company Judge has observed at paragraph 4 as under:-
“4. Since
there are only two bidders namely; M/s.Crystal Equities Limited and
Shri M.S. Lohar, the Court has asked the parties to make their
offer, Mr.Shalil Thakore, learned Advocate appearing for Ms.Megha
Jani for M/s.Crystal Equities Limited has submitted that his client
is not interested in purchasing the property in question as the
responsible person of the said party is suffering from paralysis.
Hence, he submitted
that his client is not interested in purchasing the property in
question of the Company in liquidation. He has, therefore,
requested that the EMD amount paid by the said party may kindly be
given back.”
On the aforesaid
aspect, there is no dispute by the appellant that he did withdraw
the offer.
If
the circumstances as stated in aforesaid paragraph 4 of the order of
the learned Company Judge is concerned with Condition No.27,
it cannot be said that it would not attract the forfeiture of the
deposit as sought to be canvassed and contended.
In
view of the above, we find that the appeal is meritless and hence,
deserves to be dismissed. Therefore, dismissed.
(Jayant Patel, J.)
(J.
C. Upadhyaya, J.)
vinod
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