{"id":17270,"date":"2008-10-14T00:00:00","date_gmt":"2008-10-13T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/manibhadra-vs-o-on-14-october-2008"},"modified":"2018-07-15T12:12:45","modified_gmt":"2018-07-15T06:42:45","slug":"manibhadra-vs-o-on-14-october-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/manibhadra-vs-o-on-14-october-2008","title":{"rendered":"Manibhadra vs O on 14 October, 2008"},"content":{"rendered":"
Gujarat High Court<\/div>\n
Manibhadra vs O on 14 October, 2008<\/div>\n
Author: K.A.Puj,&Nbsp;<\/div>\n
   Gujarat High Court Case Information System \n\n  \n  \n    \n\n \n \n    \t      \n         \n\t    \n\t\t   Print\n\t\t\t\t          \n\n  \n\n\n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t\n\n\n \n\n\n\t \n\nCOMA\/517\/2008\t 14\/ 14\tORDER \n \n \n\n\t\n\n \n\nIN\nTHE HIGH COURT OF GUJARAT AT AHMEDABAD\n \n\n \n\n\n \n\nCOMPANY\nAPPLICATION No. 517 of 2008\n \n\nIn\n\n\n \n\nCOMPANY\nPETITION No. 242 of 1997\n \n\nWith\n\n\n \n\nCOMPANY\nAPPLICATION No. 518 of 2008\n \n\nIn\n \n\nCOMPANY\nPETITION No. 242 of 1997\n \n\n \n====================================\n \n\nMANIBHADRA\nSALES CORPORATION - Applicant\n \n\nVersus\n \n\nO\nL OF HINDUSTAN NITROPRODUCT (GUJARAT) LTD - Respondent\n \n\n====================================Appearance\n: \n1.\t Company Application No.517 of 2008\n \n\n\tMR\nKS NANAVATI, SENIOR ADVOCATE WITH MR AS \tSHAH for NANAVATI ASSOCIATES\nfor Applicant. \n\tMR JS YADAV for Official Liquidator.\n \n\n2.\t Company\nApplication No.518 of 2008\n \n\n\tMR\nMIHIR JOSHI, SENIOR ADVOCATE WITH MR \tPAVAN GODIAWALA for\nApplicant. \n\tMR JS YADAV for Official\nLiquidator. \n====================================\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\nCORAM\n\t\t\t: \n\t\t\t\n\t\t\n\t\t \n\t\t\t \n\nHONOURABLE\n\t\t\tMR.JUSTICE K.A.PUJ\n\t\t\n\t\n\n \n\n \n \n\n\n \n\nDate\n: 14\/10\/2008 \nCOMMON ORAL ORDER<\/pre>\n
\tThe
\n\tapplicant of Company Application No.517 of 2008 i.e. Manibhadra
\n\tSales Corporation has taken out this Judge’s Summons seeking
\n\tdirection of this Court that the applicant be refunded an amount of
\n\tRs. 1 Crore with interest accrued thereon, deposited by the
\n\tapplicant before the Official Liquidator and an amount of
\n\tRs.39,99,080\/- with interest accrued thereon deposited by the
\n\tapplicant before this Court pursuant to an order dated 23.07.2004
\n\tand an amount towards interest accrued on the amount of Rs.2.75
\n\tCrores for the period from 02.12.2003 to 10.09.2004 during which
\n\tsuch amount was deposited by the applicant before the Official
\n\tLiquidator pursuant to the order dated 24.11.2003 of this Court.\n<\/p>\n
\tThe
\n\tapplicant of Company Application No.518 of 2008 i.e. Castwell Alloys
\n\tLimited, has also prayed for the direction to the Official
\n\tLiquidator to refund the amount of Rs. 1,62,75,000\/- to the
\n\tapplicant along with the accrued interest thereon and seeking
\n\tpermission of this Court to withdraw the amount of Rs.20,05,000\/-
\n\talong with accrued interest thereon from the Registry of this Court,
\n\tpursuant to the judgment of the Hon’ble Supreme Court of India
\n\tsetting aside the judgment of the Division Bench as well as the
\n\tLearned Single Judge of this Court, whereby prayers of the applicant
\n\tand another bidder which were allowed by this Court for
\n\tre-auctioning after fresh report of Valuer and setting aside the
\n\toriginal confirmation of the bid of the original bidder, was
\n\tdisallowed by the Hon’ble Supreme Court and the order confirming the
\n\tbid of the original bidder i.e. M\/s. Valji Khimji came to be
\n\trestored.\n<\/p>\n
\tAn
\n\taffidavit is filed by Mr. Bhikchand Suvalal Jaiswal in support of
\n\tthe Judge’s Summons taken out by the applicant of Company
\n\tApplication No.517 of 2008 and an affidavit is filed by Mr. Dungro
\n\tRam Jat in support of the Judge’s Summons taken out by the applicant
\n\tof Company Application No.518 of 2008.\n<\/p>\n
\tThis
\n\tCourt has passed an order on 06.10.2008 directing the Official
\n\tLiquidator as well as the Registry of this Court to place on record
\n\tthe details of the amount paid and\/or deposited by the applicant
\n\teither with this Court or with the Official Liquidator, as the case
\n\tmay be, and the interest accrued thereon till this date.  Pursuant
\n\tto the said order, the Official Liquidator has filed his report in
\n\tboth these matters on 08.10.2008.  Similarly, Registrar (Inspection)
\n\thas also submitted his report before the Court.\n<\/p>\n
\tAs
\n\tper the report filed by the Official Liquidator on 08.10.2008 in
\n\tCompany Application No.517 of 2008, the details of amount deposited
\n\tby the applicant towards purchase of assets of the Company are as
\n\tunder :-\n<\/p>\n
Sr. No.<\/p>\n
Date of event<\/p>\n
Amount <\/p>\n
(Rs.)<\/p>\n
01.<\/p>\n
06.11.2003<\/p>\n
1,00,00,000\/-\n<\/p>\n
02.<\/p>\n
08.12.2003<\/p>\n
2,77,62,500\/-\n<\/p>\n
TOTAL<\/p>\n
3,77,62,500\/-\n<\/p>\n
3.<\/p>\n
21.09.2004
\n\t\t\t\t\t?  Amount returned in terms of order of this Court.\n<\/p>\n
2,75,00,000\/-\n<\/p>\n
Balance<\/p>\n
1,02,62,500\/-\n<\/p>\n
The
\naforesaid amounts were placed in the Bank by way of different FDRs
\nand an amount of Rs.40,57,629\/- (approximately, subject to
\nconfirmation of the same from different Banks where the FDRs were
\nplaced), is received towards interest accrued on the said amount from
\ntime to time.\n<\/p>\n
\tSimilarly,
\n\tas per the report filed by the Official Liquidator on 08.10.2008 in
\n\tCompany Application No.518 of 2008, the details of amount deposited
\n\tby the applicant towards purchase of assets of the Company are as
\n\tunder :-\n<\/p>\n
Sr. No.<\/p>\n
Date of event<\/p>\n
Amount <\/p>\n
(Rs.)<\/p>\n
01.<\/p>\n
22.09.2004<\/p>\n
1,00,00,000\/-\n<\/p>\n
02.<\/p>\n
08.10.2004<\/p>\n
62,75,000\/-\n<\/p>\n
TOTAL<\/p>\n
1,62,75,000\/-\n<\/p>\n
The
\naforesaid amounts were placed in the Bank by way of different FDRs
\nand an amount of Rs.33,76,345\/- (approximately, subject to
\nconfirmation of the same from different Banks where FDRs were
\nplaced), is received towards interest accrued on the said amount from
\ntime to time.\n<\/p>\n
\tPursuant
\n\tto the directions issued to the Registry vide order dated
\n\t06.10.2008, the Registrar (Inspection) filed a detailed office note,
\n\twherein it is submitted that the applicant of Company Application
\n\tNo.517 of 2008 viz. Manibhadra Sales Corporation has deposited an
\n\tamount of Rs.41,20,478 i.e. Rs.41,14,478 on 16.08.2004 and
\n\tRs.6,000\/- on 30.10.2004 in OJMCA No.175 of 2003 and the applicant
\n\tof Company Application No.518 of 2008 viz. Castwell Alloys Limited
\n\thas deposited Rs.20,05,000\/- i.e. Rs.5,000\/- on 27.09.2004 and
\n\tRs.20,00,000\/- on 08.10.2004 in Company Application No.311 of 2004
\n\twith OLR No.49 of 2003.  In all, Rs.61,25,478\/- have been deposited
\n\tby both the applicants and the entire amount of Rs.61,25,478\/- has
\n\tbeen invested in Fixed Deposit by way of bulk investment on
\n\t22.05.2006 with State Bank of India, Gujarat High Court Complex
\n\tBranch, Sola, Ahmedabad for a period of 3 years in pursuance of
\n\torder passed by the Division Bench of this Court on 07.07.2004 in
\n\tSpecial Civil Application No.321 of 2004.  It is further stated in
\n\tthe said office note that the Bank has worked out the interest
\n\tamount accrued on the Fixed Deposits payable till 06.10.2008 and
\n\ttotal amount of interest payable comes to Rs.8,05,349\/- on the
\n\tprincipal amount of Rs.61,25,478\/-.\n<\/p>\n
\tHeard
\n\tMr. K.S. Nanavati, learned Senior Counsel appearing with Mr. A.S.
\n\tShah for the applicant of Company Application No.517 of 2008 and Mr.
\n\tMihir Joshi, learned Senior Counsel appearing with Mr. Pavan
\n\tGodiawala for the applicant of Company Application No.518 of 2008.
\n\tMr. J.S. Yadav, learned advocate appears on behalf of the Official
\n\tLiquidator.\n<\/p>\n
\tIt
\n\tis the case of the applicants that the applicants were the proposed
\n\tbuyers of the assets of the Company in liquidation.  Upon coming to
\n\tknow about the sale of the properties of the Company in liquidation,
\n\tthe applicant of Company Application No.517 of 2008 made an offer
\n\tfor purchase of the assets of the Company in liquidation for Rs.
\n\t3.75 Crores and in order to show their bonafide, they deposited the
\n\tamount of Rs. 1 Crore with the Official Liquidator.  At the time of
\n\tmaking the application before the Court, the sale was already
\n\tconfirmed in favour of M\/s. Valji Khimji & Company.  However,
\n\tthe sale deed was not executed and the said party has not deposited
\n\tthe entire purchase consideration before the Official Liquidator.
\n\tOn hearing the applicant, this Court has passed an order on
\n\t24.10.2003 issuing notice to the respondent and directed the
\n\tOfficial Liquidator to maintain status-quo.  Pursuant to the order
\n\tdated 24.11.2003 passed by this Court, the applicant had deposited
\n\tfurther sum of Rs.2.75 Crores with the Official Liquidator alongwith
\n\tinterest on the EMD amount of Rs.25 Lacs @ 1.5% p.m. for the period
\n\tfrom 10.04.2003 to 22.10.2003.  Thereafter, this Court vide order
\n\tdated 23.07.2004 directed the applicant to deposit a sum as interest
\n\t@ 15% p.a. on the sale consideration of Rs. 3.25 Crores paid by the
\n\trespondent No.1.  Pursuant to the said order, the applicant on
\n\t31.07.2004 has deposited an amount of Rs.39,99,080\/-.  Subsequently,
\n\tthe applicant filed OJ Misc. Civil Application No.175 of 2003 and
\n\tthis Court has passed an order on 10.09.2004 whereby the order dated
\n\t30.05.2003 passed in OLR No. 49 of 2003 in Company Petition No.242
\n\tof 1997 was recalled.  By the said order, this Court permitted the
\n\tapplicant to withdraw Rs.2.75 Crores deposited by the applicant
\n\tpursuant to the order dated 24.11.2003, leaving behind the balance
\n\tof Rs.1 Crore.\n<\/p>\n
\tSo
\n\tfar as applicant of Company Application No.518 of 2008 is concerned,
\n\tit has filed Company Application No.314 of 2004 for recalling the
\n\torder of confirmation and for acceptance of its offer for Rs. 5
\n\tCrores.  The said application was allowed by this Court vide common
\n\torder dated 10.09.2004 and the order of confirmation of sale was
\n\trecalled.  In this very order, the applicant was directed to deposit
\n\tan amount of Rs.1,82,80,000\/- consisting of Rs. 50 Lacs as earnest
\n\tmoney deposit, Rs.12,75,000\/- as non-refundable interest,
\n\tRs.1,00,00,000\/- to establish its bonafides and Rs.20,00,000\/-
\n\ttowards loss of interest suffered by the buyer.\n<\/p>\n
\tThe
\n\tsaid order dated 10.09.2004 passed by this Court was carried in
\n\tappeal by the buyer before the Division Bench of this Court by way
\n\tof OJ Appeal No. 69 of 2004.  The said appeal was dismissed by the
\n\tDivision Bench of this Court on 25.08.2005.\n<\/p>\n
\tBeing
\n\taggrieved by the said order, the respondent No.7 has preferred
\n\tSpecial Leave Petition No.4745 of 2006 before the Hon’ble Supreme
\n\tCourt and the Hon’ble Supreme Court by an interim order directed to
\n\tmaintain status-quo.  Subsequently, the Hon’ble Supreme Court has
\n\tdecided the said SLP on 12.08.2008 and it was decided in favour of
\n\tthe present respondent No.7.  The Hon’ble Supreme Court has
\n\tconfirmed the auction sale dated 30.07.2003 in favour of respondent
\n\tNo. 7.\n<\/p>\n
\tBy
\n\tvirtue of the said order, the orders passed by the Learned Single
\n\tJudge of this Court as well as the Division Bench of this Court were
\n\tquashed and set aside and the offers made by the present applicants
\n\twere not accepted and no fresh sale is, therefore, required to be
\n\ttaken place.  In this view of the matter, submission is made on
\n\tbehalf of the applicants that the amount deposited by way of earnest
\n\tmoney and other amounts towards sale consideration and interest
\n\taccrued thereon either before this Court or with the Official
\n\tLiquidator are required to be refunded.\n<\/p>\n
\tMr.\n<\/p>\n
\tJ.S. Yadav, learned advocate appearing for the Official Liquidator,
\n\ton the other hand, has submitted that the applicants have entered
\n\tinto the auction proceedings at a belated stage and they were
\n\trequired to pay late entry charges.  Subsequently, pursuant to the
\n\torder passed by this Court, further amounts were directed to be
\n\tdeposited.  Knowing fully well that the sale is already confirmed in
\n\tfavour of M\/s. Valji Khimji & Company and they are opposing
\n\ttheir applications and still they have made offers and deposited
\n\tamount.  He has, therefore, submitted that this being the commercial
\n\ttransaction, interest charged by way of late entry as well as
\n\tinterest accrued on the amount deposited by them should not be
\n\trefunded to the applicants.  He has further submitted that there is
\n\tno clarification in the order of the Hon’ble Supreme Court with
\n\tregard to refund of amount with interest and hence, if at all they
\n\tare entitled to such interest, necessary clarification must be
\n\tsought from the Hon’ble Supreme Court.  He has further submitted
\n\tthat earlier also, an application was moved by the applicant for
\n\twithdrawal of the amount and this Court has not granted that
\n\tapplication and directed the applicant to seek clarification from
\n\tthe Hon’ble Supreme Court.  Considering all these aspects of the
\n\tmatter, he has strongly urged that so far as the principal amount is
\n\tconcerned, the same should be refunded.  However, the interest
\n\taccrued thereon should not be refunded.\n<\/p>\n
\tHaving
\n\theard learned advocates appearing for the respective parties and
\n\thaving gone through the orders passed by the Court from time to time
\n\tincluding the order of the Hon’ble Supreme Court, this Court is of
\n\tthe view that when the offers made by the applicants before this
\n\tCourt for purchase of the properties of the Company in liquidation
\n\tare not accepted in view of the decision of the Hon’ble Supreme
\n\tCourt and no sale is going to take place now, the applicants are
\n\tcertainly entitled to refund of the amount deposited by them either
\n\twith the Registry of this Court or with the Official Liquidator,
\n\talong with the interest accrued thereon.  It is not the case that
\n\tthey have backed out from their offers.  They are still willing to
\n\tparticipate in the auction sale if it takes place.  However, that
\n\tcontingency would not arise now in view of the decision of the
\n\tHon’ble Supreme Court.  The applicants are, therefore, certainly
\n\tentitled to the interest accrued on the amounts deposited by them.
\n\tAs far as late entry charges are concerned, it is true that normally
\n\tsuch charges are not refunded to the applicants.  But, here in the
\n\tpresent case, the applicants have made the offers.  They are
\n\texpecting the fresh sale in view of the much higher offers made by
\n\tthem.  However, in view of the decision of the Hon’ble Supreme
\n\tCourt, there is no question of any fresh sale now.  Further, the
\n\torders passed by the Learned Single Judge as well as the Division
\n\tBench of this Court are quashed and set aside and hence, late entry
\n\tcharges are also required to be refunded to the applicants. The view
\n\ttaken by this Court is also in consonance with the provisions
\n\tcontained in Section 65 of the Indian Contract Act, 1872.\n<\/p>\n
\tIn
\n\tview of the peculiar facts and circumstances of the case, the
\n\tapplicants are entitled to the refund of the entire amount deposited
\n\tby them along with interest accrued thereon.  The Official
\n\tLiquidator as well as the Registry of this Court are, therefore,
\n\tdirected to refund the amount to each of these two applicants as per
\n\ttheir entitlements as indicated in the reports filed before this
\n\tCourt.  The exact details of payments are to be worked out and
\n\tcheques be drawn separately in favour of the applicants, except the
\n\tamount of cost awarded by the Court earlier.  The refund amount with
\n\tinterest is directed to be paid to the applicants within 2 weeks
\n\tfrom today.  The Official Liquidator as well as Registry are
\n\tpermitted to encash Fixed Deposit Receipts pre-maturely.\n<\/p>\n
\tThese
\n\tapplications are accordingly allowed without any order as to costs.\n<\/p>\n
\tRegistry
\n\tis directed to place a copy of this order in connected matter.\n<\/p>\n
\t\t\t\t\tSd\/-\n<\/p>\n
\t\t\t\t\t\t\t[K.\n<\/p>\n
A. PUJ, J.]\t\t<\/p>\n
Savariya<\/p>\n
\t\t   \u00a0\u00a0\u00a0<\/p>\n
\t\t   Top<\/p>\n","protected":false},"excerpt":{"rendered":"
Gujarat High Court Manibhadra vs O on 14 October, 2008 Author: K.A.Puj,&Nbsp; Gujarat High Court Case Information System Print COMA\/517\/2008 14\/ 14 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD COMPANY APPLICATION No. 517 of 2008 In COMPANY PETITION No. 242 of 1997 With COMPANY APPLICATION No. 518 of 2008 In COMPANY PETITION No. […]<\/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":[16,8],"tags":[],"class_list":["post-17270","post","type-post","status-publish","format-standard","hentry","category-gujarat-high-court","category-high-court"],"yoast_head":"\nManibhadra vs O on 14 October, 2008 - 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\/manibhadra-vs-o-on-14-october-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Manibhadra vs O on 14 October, 2008 - 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