{"id":113687,"date":"2010-03-01T00:00:00","date_gmt":"2010-02-28T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/p-s-vincent-vs-k-y-abdu-on-1-march-2010"},"modified":"2016-12-21T10:40:11","modified_gmt":"2016-12-21T05:10:11","slug":"p-s-vincent-vs-k-y-abdu-on-1-march-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/p-s-vincent-vs-k-y-abdu-on-1-march-2010","title":{"rendered":"P.S.Vincent vs K.Y.Abdu on 1 March, 2010"},"content":{"rendered":"
Kerala High Court<\/div>\n
P.S.Vincent vs K.Y.Abdu on 1 March, 2010<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nCo.Appeal.No. 2 of 2010()\n\n\n1. P.S.VINCENT, PUTHUMADASSERY HOUSE,\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. K.Y.ABDU, S\/O.YOOSUF RAWTHER,\n                       ...       Respondent\n\n2. THE OFFICIAL LIQUIDATOR,\n\n3. KERALA STATE INDUSTRIES DEVELOPMENT\n\n                For Petitioner  :SRI.RAJU JOSEPH\n\n                For Respondent  :SRI.K.MONI\n\nThe Hon'ble MR. Justice A.K.BASHEER\nThe Hon'ble MR. Justice P.Q.BARKATH ALI\n\n Dated :01\/03\/2010\n\n O R D E R\n                  A.K. BASHEER & P.Q. BARKATH ALI, JJ.\n\n            ------------------------------------------------------\n\n                    Company Appeal No.2 of 2010\n\n            ------------------------------------------------------\n\n                  Dated this the 1st day of March, 2010\n\n                                  JUDGMENT\n<\/pre>\n
Basheer, J.\n<\/p>\n
      This appeal is directed against the order passed by the learned<\/p>\n
Company Judge in two Applications filed in Company Petition No.2 of<\/p>\n
2003.\n<\/p>\n
      2.     By the impugned order the Company Court has directed<\/p>\n
that the revised offer made by respondent No.1 herein who was the<\/p>\n
applicant in Company Application No.398\/2009 for Rs.1,05,01,000\/-<\/p>\n
( Rupees one Crore five Lakh one thousand) be accepted and the<\/p>\n
assets of the company in liquidation, which were notified for sale, be<\/p>\n
sold to the said applicant.\n<\/p>\n
      3.    The grievance of the appellant who was not a party to the<\/p>\n
Company Application referred to above, is that his offer of<\/p>\n
Rs.1,09,75,000\/- ( Rupees One Crore Nine Lakh Seventy Five<\/p>\n
Thousand) ought to have been accepted by the Company Court not<\/p>\n
only for the reason that his offer was higher than what was offered by<\/p>\n
respondent No.1, but also since he was not given an opportunity to<\/p>\n
make a further offer or atleast to explain the position.<\/p>\n
Co.Appeal No.2\/2010                2<\/span><\/p>\n
      4.    Relevant facts may be briefly noticed.\n<\/p>\n
      5.    It is not in dispute that certain movable and immovable<\/p>\n
assets of the company in liquidation ( M\/s. Elcera Substrates Ltd)<\/p>\n
which is the subject matter of C.P.No.2\/2003, were put to sale by the<\/p>\n
Official Liquidator. It appears that initially, the highest offer received<\/p>\n
from two bidders separately for the immovable assets and the plant<\/p>\n
and machinery put together was only for Rs. 64,93,800\/- ( Rupees<\/p>\n
Sixty Four Lakhs Ninety three thousand eight hundred).              In the<\/p>\n
meanwhile respondent No.1 approached the Company Court and filed<\/p>\n
I.A.No.398\/2009 making an offer of Rs.1,00,01000\/- for the movable<\/p>\n
and immovable assets and the plant and machinery. Appellant filed<\/p>\n
I.A.No.380\/2009 offering a total sum of Rs. 88,00,000\/-.       On a query<\/p>\n
made by the Company Court as to whether the two bidders were<\/p>\n
prepared to make a better offer, respondent No.1 enhanced his offer<\/p>\n
and raised it to Rs.1,05,01,000\/- and appellant enhanced it to<\/p>\n
Rs. 92,52,100\/-.\n<\/p>\n
      6.    At this stage the Company Court directed the Official<\/p>\n
Liquidator to issue a fresh tender notification for sale fixing the sum of<\/p>\n
Rs.1,05,01,000\/- as the upset price and to see whether there was any<\/p>\n
better offer.\n<\/p>\n
      7.    It was at this stage that the appellant raised his offer to<\/p>\n
Co.Appeal No.2\/2010                     3<\/span><\/p>\n
Rs.1,09,75,000\/- for the movables, plant and machinery and<\/p>\n
immovable assets. But while making the said offer, the appellant put<\/p>\n
forth four conditions which in effect were as follows :<\/p>\n
                   1)     All documents in respect of the land\n\n            must be \"cleared\".\n\n                   2)     All electricity dues must be discharged\n\n<\/pre>\n
            by the Official Liquidator and it must be ensured<\/p>\n
            that new electric connection is provided in his<\/p>\n
            name.\n<\/p>\n
                   3)     He should be absolved of all statutory<\/p>\n
            liabilities like telephone, sales tax, Insurance ,<\/p>\n
            Provident Fund etc.<\/p>\n
                   4)     Document of title must be executed<\/p>\n
            either in his own name or in favour of the person<\/p>\n
            to be nominated by him.\n<\/p>\n
      8.    Respondent No.1 did not revise his earlier offer of<\/p>\n
Rs. 1,05,01,000\/-. The offers made by the appellant and respondent<\/p>\n
No.1 were placed before the Company court by the Official Liquidator<\/p>\n
along with his report. The Liquidator in his report stated that condition<\/p>\n
No.2 put forth by the appellant cannot be countenanced or accepted<\/p>\n
under any circumstances. But as regards the other three conditions,<\/p>\n
the Liquidator did not make any suggestion and left it to the discretion<\/p>\n
of the court.\n<\/p>\n
      9.    When the matter came up for consideration, the learned<\/p>\n
Co.Appeal No.2\/2010                 4<\/span><\/p>\n
Judge took the view that the offer made by the appellant cannot be<\/p>\n
accepted in view of the conditions attached to the same. The learned<\/p>\n
Judge therefore directed that the revised offer of    Rs. 1,05, 01,000\/-<\/p>\n
made by respondent No.1 be accepted and the assets of the company<\/p>\n
be sold to him.\n<\/p>\n
      10.   As mentioned earlier, the appellant takes exception to the<\/p>\n
above order passed by the learned Company Judge on two grounds<\/p>\n
which we have already referred to above.\n<\/p>\n
      11.     Sri.Raju Joseph, learned counsel for the appellant submits<\/p>\n
that the appellant ought not to have been penalised even assuming he<\/p>\n
had committed any indiscretion.        The appellant had only given<\/p>\n
expression to his anxiety. His only intention was to ensure that he did<\/p>\n
not incur any other liabilities.   The appellant being an uneducated<\/p>\n
person, his conduct ought to have been considered in its right<\/p>\n
perspective. At any rate, the appellant ought to have been given an<\/p>\n
opportunity to offer an explanation, in which event, he might have<\/p>\n
even reconsidered the matter and probably would have withdrawn<\/p>\n
those conditions.\n<\/p>\n
      12.    In this context, learned counsel invites our attention to the<\/p>\n
provisions contained under Section 55 of The Transfer of Property Act<\/p>\n
1882 and particularly to Clause (g) of the above section. Section 55<\/p>\n
Co.Appeal No.2\/2010                  5<\/span><\/p>\n
lays down the rights and liabilities of buyer and seller of an immovable<\/p>\n
property.   It   postulates that in the absence of a contract to the<\/p>\n
contrary, the buyer and seller of immovable property respectively, are<\/p>\n
subject to the liabilities, and have the rights, mentioned in the rules<\/p>\n
enumerated in the Section, or such of them as are applicable to the<\/p>\n
property sold.\n<\/p>\n
     13.    Clause of sub section 1 further postulates that the seller is<\/p>\n
bound among other things :\n<\/p>\n
                    (g)    to pay all public charges and rent<\/p>\n
               accrued due in respect of the property up to the<\/p>\n
               date of sale, the interest on all encumbrances on<\/p>\n
               such property due on such date,        and, except<\/p>\n
               where     the   property   is   sold   subject    to<\/p>\n
               encumbrances, to discharge all encumbrances on<\/p>\n
               the property then existing.\n<\/p>\n
      14. It is contended by the learned counsel that a perusal of the<\/p>\n
conditions incorporated by the appellant in Annexure A tender<\/p>\n
document will unambiguously show that all these conditions were in<\/p>\n
essence what was contained in Clause ‘g’ of Section 55.            While<\/p>\n
conceding that the properties were sold ” IN AS IS WHERE IS AND<\/p>\n
WHATEVER THERE IS” condition, it is contended by the learned<\/p>\n
Co.Appeal No.2\/2010                  6<\/span><\/p>\n
counsel that it was incumbent on the seller, the Official Liquidator, to<\/p>\n
ensure that the buyer was not saddled with any unhidden liabilities at<\/p>\n
a later stage. This was only what the appellant intended when the “so<\/p>\n
called” conditionalities were put forth.\n<\/p>\n
      15.   Learned counsel has also pressed into service Section 57 of<\/p>\n
The Transfer of Property Act in support of the above contention. The<\/p>\n
provision in the above Section only postulates that where immovable<\/p>\n
property subject to any encumbrances, whether immediately payable<\/p>\n
or not, is sold by the court in execution of a decree, or out of court,<\/p>\n
the court may, if it thinks fit, on the application of any party to the<\/p>\n
sale, direct or allow payment into court such dues in the manner<\/p>\n
provided therein. It can be seen that the above provision relates to<\/p>\n
sale by    court of an immovable property which is subject to any<\/p>\n
encumbrance . The section mandates that such encumbrances shall<\/p>\n
be discharged in the manner provided in the section.<\/p>\n
      16.   We are afraid that the attempt of the learned counsel to<\/p>\n
seek the aid of Section 57 in his case is totally misconceived.<\/p>\n
       17. As regards the contention based on Clause ‘g’ of Section<\/p>\n
55, it may be noticed that it is one of the several obligations cast on a<\/p>\n
seller of an immovable property to discharge all public charges and<\/p>\n
rent accrued due in respect of the said property up to the date of sale.<\/p>\n
Co.Appeal No.2\/2010                 7<\/span><\/p>\n
But where the property is sold subject to encumbrances, the situation<\/p>\n
may be different as is discernible from the above sub clause. We do<\/p>\n
not propose to deal with that aspect of the matter any further since in<\/p>\n
our view the issue can be dealt with dehors the aid of the above sub<\/p>\n
clause.\n<\/p>\n
      18.   As rightly pointed out by the learned counsel for<\/p>\n
respondent No.1, the appellant had put his signature under<\/p>\n
endorsement       referring to the terms and conditions.         He had<\/p>\n
unequivocally stated that he has unconditionally accepted the terms<\/p>\n
and conditions of the sale. As mentioned earlier, one of the general<\/p>\n
terms and conditions of sale stipulated that the assets were being sold<\/p>\n
in “as is where is and whatever there is”. Clause ‘ d ‘ of the terms and<\/p>\n
conditions reads thus :\n<\/p>\n
                “The assets are sold on the assumption that the<\/p>\n
          tenderer\/s have inspected the assets, know what they<\/p>\n
          are tendering for, whether they have inspected or not<\/p>\n
          and the principle of ‘Caveat Emptor’ will apply.”<\/p><\/blockquote>\n
      19.   According to the learned counsel, the phraseology ” AS IS<\/p>\n
WHERE IS AND WHATEVER THERE IS” will not take within its ambit<\/p>\n
the defect in title or any other unseen liability that may be attached to<\/p>\n
the property. Learned counsel contends that the above clause would<\/p>\n
Co.Appeal No.2\/2010                8<\/span><\/p>\n
only relate and refer to the physical condition of the asset and nothing<\/p>\n
more. For instance he points out that a successful tenderer may not<\/p>\n
be entitled to complain about the defect or poor quality of the movable<\/p>\n
property like machinery etc., if it was not in a working condition.<\/p>\n
Similarly, if the immovable property like land turns out to be totally<\/p>\n
rocky and unusable for any agricultural purposes,        the successful<\/p>\n
tenderer cannot be heard to say that he did not bargain for such a<\/p>\n
land. It is further pointed out by the learned counsel that tenderer<\/p>\n
may not also be entitled to complain, if any easementary right is<\/p>\n
attached to the land under the Easments Act 1882.<\/p>\n
      20.    In short it is pointed out by the learned counsel that<\/p>\n
neither the liquidator nor respondent No.1 can take shelter under the<\/p>\n
above clause incorporated in the tender notification.<\/p>\n
      21. It is true that the appellant was not formally given an<\/p>\n
opportunity by the liquidator to reconsider the matter and to state<\/p>\n
whether he stuck to the conditions incorporated by him to the offer in<\/p>\n
response to the tender. However, it has to be noticed that a fresh<\/p>\n
tender notification was issued by the Official Liquidator as suggested<\/p>\n
by the Court since there was wide disparity between the first offer and<\/p>\n
the last one.    As mentioned earlier, while the first offer made by<\/p>\n
another person was for about Rs.65 lakhs, the offer made by<\/p>\n
Co.Appeal No.2\/2010                9<\/span><\/p>\n
respondent No.1 on the first occasion was Rs.1,00,01,000\/-.         Still<\/p>\n
later, respondent No.1 enhanced his offer to Rs.1,05,01,000\/-. It was<\/p>\n
noticing the above wide disparity in the offers made by the tenderers<\/p>\n
that officials of the Company Court had directed the Official Liquidator<\/p>\n
to issue a fresh tender notification. In response to the notification,<\/p>\n
the appellant had made an offer of Rs.1,09,75,000\/-. The learned<\/p>\n
Company Judge, after considering these two offers made by<\/p>\n
respondent No.1 and appellant, took the view that the offer made by<\/p>\n
the appellant need not be accepted since certain conditionalities were<\/p>\n
attached.\n<\/p>\n
      22. The short question that arises for consideration is whether<\/p>\n
any interference is warranted in the view taken by the learned<\/p>\n
Company Judge.\n<\/p>\n
       23. At first blush the contentions raised by the appellant may<\/p>\n
appear to be quite attractive. As has been noticed already 3 of the 4<\/p>\n
conditions put forth by the appellant may not have any implementation<\/p>\n
or complications as such. However the second condition with regard to<\/p>\n
the liabilities, if any, to the Electricity Board could not have been<\/p>\n
countenanced at all, as pointed out by the official liquidator in his<\/p>\n
report before the Company Court.       Still a stipulation made by the<\/p>\n
condition imposed by the appellant that the official liquidator must<\/p>\n
Co.Appeal No.2\/2010                10<\/span><\/p>\n
ensure that the power connection was made available to him once the<\/p>\n
sale is confirmed.\n<\/p>\n
      24.    As regards the above contention, the Official Liquidator<\/p>\n
reported before the Court that it was unaccepted.<\/p>\n
      25.    Sri.Raju Joseph, learned counsel for the appellant,<\/p>\n
contends that even assuming the conditions put forth by the appellant<\/p>\n
were unacceptable, the Official Liquidator ought to have afforded an<\/p>\n
opportunity to him to be heard. It is further contended by the learned<\/p>\n
counsel that the Official Liquidator ought to have considered the offer<\/p>\n
made by the appellant de hors those conditions.<\/p>\n
      26.    As has been noticed already, the appellant had made an<\/p>\n
endorsement accepting all the terms and conditions of the tender<\/p>\n
notification as could be seen from Annexure-A notification itself. The<\/p>\n
four conditions were written by the appellant in his own handwriting<\/p>\n
beneath the above endorsement. Clause (j) of Annexure-A notification<\/p>\n
makes it abundantly clear that ” terms and conditions of sale will form<\/p>\n
part of every tender and shall be signed and submitted along with each<\/p>\n
tender in token of acceptance of the terms and conditions of the sale”.<\/p>\n
Even if we accept the contention raised by the appellant as regards the<\/p>\n
clause relating to “AS IS WHERE IS AND WHATEVER THERE IS”, it<\/p>\n
cannot be said that the appellant might have been ignorant of the<\/p>\n
Co.Appeal No.2\/2010                 11<\/span><\/p>\n
other terms and conditions in Annexure-A notification. The learned<\/p>\n
Company Judge has, apparently keeping in view all the above aspects<\/p>\n
of the matter, decided not to accept the offer made by the appellant.<\/p>\n
Though there is some merit in the contention raised by the appellant<\/p>\n
as regards failure of the Official Liquidator to issue notice to him, we<\/p>\n
are not persuaded to disagree with the view taken by the learned<\/p>\n
Company Judge.       The appellant could not have imposed certain<\/p>\n
conditions precedent while submitting his tender papers. We have also<\/p>\n
kept in view the circumstance leading to issuance of Annexure-A<\/p>\n
notification before which respondent No.1 had made his offer.<\/p>\n
      27.    As has been noticed already, the offer of Rs.1,05,01,000\/-<\/p>\n
made by respondent No.1 was treated as the upset price by the<\/p>\n
company court. It is true that respondent No.1 had not chosen to<\/p>\n
offer a higher bid in response to Annexure-A notification.         Under<\/p>\n
normal circumstances, if the appellant had not imposed any<\/p>\n
conditionalities, he might have walked away with the bid.           But,<\/p>\n
unfortunately, he decided to impose certain conditions, may be for his<\/p>\n
own reasons.     As rightly held by the learned Company Judge, the<\/p>\n
appellant was not entitled to have the cake and eat it too. We do not<\/p>\n
find any reason to interfere with the order passed by the company<\/p>\n
court.\n<\/p>\n
Co.Appeal No.2\/2010                 12<\/span><\/p>\n
      There is yet another aspect of the matter.          It is beyond<\/p>\n
controversy that the sale was confirmed on 4th January, 2010 and the<\/p>\n
properties, both movable and immovable, were              delivered to<\/p>\n
respondent No.1 on the same day.         It is contended by respondent<\/p>\n
No.1, which is not controverted, that he had also sold the movables to<\/p>\n
a third party. It is also on record that respondent No.1 has entered<\/p>\n
into an agreement for sale of certain portions of the entire immovable<\/p>\n
property as well.\n<\/p>\n
            The appeal fails. It is accordingly dismissed.<\/p>\n
                                           A.K. BASHEER, JUDGE<\/p>\n
                                          P.Q. BARKATH ALI, JUDGE<\/p>\n
mt\/sv\/mns\/aks<\/p>\n
Co.Appeal No.2\/2010    13<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court P.S.Vincent vs K.Y.Abdu on 1 March, 2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM Co.Appeal.No. 2 of 2010() 1. P.S.VINCENT, PUTHUMADASSERY HOUSE, … Petitioner Vs 1. K.Y.ABDU, S\/O.YOOSUF RAWTHER, … Respondent 2. THE OFFICIAL LIQUIDATOR, 3. KERALA STATE INDUSTRIES DEVELOPMENT For Petitioner :SRI.RAJU JOSEPH For Respondent :SRI.K.MONI The Hon’ble MR. Justice […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-113687","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nP.S.Vincent vs K.Y.Abdu on 1 March, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/p-s-vincent-vs-k-y-abdu-on-1-march-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"P.S.Vincent vs K.Y.Abdu on 1 March, 2010 - 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