{"id":236514,"date":"1995-05-12T00:00:00","date_gmt":"1995-05-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995"},"modified":"2016-04-11T08:39:20","modified_gmt":"2016-04-11T03:09:20","slug":"the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995","title":{"rendered":"The Chairman And Managing &#8230; vs Contromix Pvt.Ltd. By Its &#8230; on 12 May, 1995"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">The Chairman And Managing &#8230; vs Contromix Pvt.Ltd. By Its &#8230; on 12 May, 1995<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1995 AIR 1632, \t\t  1995 SCC  (4) 595<\/div>\n<div class=\"doc_author\">Author: S Agrawal<\/div>\n<div class=\"doc_bench\">Bench: Agrawal, S.C. (J)<\/div>\n<pre>           PETITIONER:\nTHE CHAIRMAN AND MANAGING DIRECTOR,SIPCOT, MADRAS - 8 AND OR\n\n\tVs.\n\nRESPONDENT:\nCONTROMIX PVT.LTD. BY ITS DIRECTOR(FINANCE) SEETHARAMAN, MAD\n\nDATE OF JUDGMENT12\/05\/1995\n\nBENCH:\nAGRAWAL, S.C. (J)\nBENCH:\nAGRAWAL, S.C. (J)\nAHMAD SAGHIR S. (J)\n\nCITATION:\n 1995 AIR 1632\t\t  1995 SCC  (4) 595\n JT 1995 (6)   283\t  1995 SCALE  (3)717\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n<p>\t\t    J U D G M E N T<br \/>\nS.C. Agrawal. J.:\n<\/p>\n<blockquote><p>     Leave granted.\n<\/p><\/blockquote>\n<blockquote><p>     We have heard learned counsel for the parties.<\/p><\/blockquote>\n<p>     This appeal  is directed  against the  Judgment of\t the<br \/>\nMadras High Court dated February 23, 1994 in Writ Appeal No.<br \/>\n97 of  1994 arising  out of  Writ Petition No. 18048 of 1993<br \/>\nfiled by Contromix Private Limited, respondent No. 1 herein.\n<\/p>\n<p>     Respondent\t No.  1,  a  company  registered  under\t the<br \/>\nCompanies Act,\t1956, is  engaged in  the  manufacturing  of<br \/>\nelectronic  instruments.   The\tState  Industries  Promotion<br \/>\nCorporation of\tTamil Nadu  Ltd. (for  short `SIPCOT&#8217;)\tis a<br \/>\nFinancial Corporation  established under  the provisions  of<br \/>\nthe State  Financial  Corporations  Act,  1950\t(hereinafter<br \/>\nreferred to as the Act). Respondent No. 1 applied for a term<br \/>\nloan  for   setting  up\t  a  project   for  manufacture\t  of<br \/>\nprogrammable logic  controllers, control  panels, electronic<br \/>\ntimer, temperature  scanners, etc.  On March 25, 1987 SIPCOT<br \/>\nsanctioned a  term loan\t of Rs.\t 38 lakhs. On June 16, 1987,<br \/>\nIDBI soft  loan\t of  Rs.  6.8  lakhs  was  also\t sanctioned.<br \/>\nRespondent No.1\t executed a  registered mortgage on July 29,<br \/>\n1987 and  created equitable  mortgage and has executed other<br \/>\nsecurity documents.  As per  the terms\tof securities of the<br \/>\nloan, respondent  No. 1\t was required to repay the term loan<br \/>\nin instalments from December 1, 1989 to June 1, 1994 and the<br \/>\nsoft loan was to be repaid in instalments from September 18,<br \/>\n1990 till March 18, 1994. Respondent No.1, did not adhere to<br \/>\nthe payment  schedule and  became a  defaulter in payment of<br \/>\nthe principal amount as well as the interest. At the request<br \/>\nof respondent  No. 1,  the repayment  of the  term loan\t was<br \/>\nrescheduled to June 1, 1990 to June 1, 1994 and it was again<br \/>\nrescheduled and\t respondent No. 1 was permitted to repay the<br \/>\nloan from  June 1, 1991 to June 1, 1994. Inspite of the said<br \/>\nrescheduling of the payment respondent No. 1 was not able to<br \/>\nadhere to  the revised\tschedule and  committed\t default  in<br \/>\npayment. On August 8, 1991 SIPCOT issued a Show Cause Notice<br \/>\nto respondent No. 1 whereupon respondent No. 1 paid a sum of<br \/>\nRs. 1,00,000\/-\tand promised to repay the entire dues within<br \/>\n2\/3 months. Thereafter, the matter was reviewed on September<br \/>\n3, 1991 and respondent No. 1 was asked to pay 50 per cent of<br \/>\nthe interest  overdues amounting  to about Rs. 3.23 lakhs by<br \/>\nDecember  31,\t1991  to   enable  SIPCOT  to  consider\t the<br \/>\nrescheduling of the payment of the loan but respondent No. 1<br \/>\ndid not\t make the  said payment.  On October 24, 1991 SIPCOT<br \/>\nissued a  notice under\tthe provisions\tof the Act recalling<br \/>\nthe entire dues amounting to Rs. 47,22,303\/-. After the said<br \/>\nnotice respondent No. 1 paid a sum of Rs. 1 lakh. In view of<br \/>\nthe  assurances\t  given\t by   respondent  No.\t1  that\t the<br \/>\noutstanding amount will be paid as early as possible, SIPCOT<br \/>\non February 2, 1992 agreed to modify the schedule of payment<br \/>\nand also  withdrew the\tforeclosure notice  by letter  dated<br \/>\nFebruary 26,  1992. Since respondent No.1 failed to abide by<br \/>\nthe assurances\ta Show Cause Notice was again sent by SIPCOT<br \/>\non May\t18, 1992  and the  loan was  foreclosed for a second<br \/>\ntime on\t June 17,  1992, when a foreclosure order was passed<br \/>\nrecalling the  sum of Rs. 56,13,406.20 p. outstanding on May<br \/>\n31, 1992.  By letter  dated August 17, 1992 respondent No. 1<br \/>\nwas informed  that the appellant will take possession of the<br \/>\nunit on\t August 26,  1992. Respondent No. 1 thereupon paid a<br \/>\nsum of\tRs.\t    4,00,000\/-. Thereafter Writ Petition No.<br \/>\n14479 of  1992 was filed in the Madras High Court and as per<br \/>\ndirections of  the High Court respondent No. 1 paid a sum of<br \/>\nRs. 3,00,000\/-\ton October  31, 1992. As regards the balance<br \/>\namount the High Court, by order dated December 7, 1992, gave<br \/>\ndirections fixing  the amount  of  the\tinstalment  and\t the<br \/>\nperiod for  payment of\tthe  same.  The\t entire\t amount\t was<br \/>\nrequired to  be paid by the end of August 1993 and the first<br \/>\ninstalment of  Rs. 2,00,000\/- was to be paid by December 31,<br \/>\n1992. The High Court also directed that if there was default<br \/>\nin any\tone of\tthe instalments,  it would  be open  to\t the<br \/>\nrespondent Corporation\tto take\t proceedings under the State<br \/>\nFinancial Corporations Act, 1951.\n<\/p>\n<p>     Respondent No. 1 did not make the payment of the sum of<br \/>\nRs. 2,00,000\/-\tby December 31, 1992 as per aforesaid order.<br \/>\nOn January  5, 1993  SIPCOT took possession of the mortgaged<br \/>\nassets of respondent No. 1. The mortgaged assets were valued<br \/>\nby SIPCOT at Rs. 36.44 lakhs. In February 1993 SIPCOT issued<br \/>\nan advertisement  inviting offers  for sale of the mortgaged<br \/>\nassets, but  no offer  was received  in response to the said<br \/>\nadvertisement. A  second advertisement\tissued by SIPCOT was<br \/>\npublished in the Indian Express on June 2, 1993. In response<br \/>\nto  the\t  said\tadvertisement\tETK  International  Ferrites<br \/>\nLimited, respondent  No. 2 herein, made an offer to purchase<br \/>\nthe assets  for a  sum of  Rs. 14.26  lakhs. Since  the said<br \/>\noffer was  too low,  SIPCOT negotiated with respondent No. 2<br \/>\nand as a result of such negotiations respondent No. 2 agreed<br \/>\nto revise  the offer  and to  pay a sum of Rs. 38 lakhs. The<br \/>\nsaid offer  of respondent  No. 2  was accepted by the SIPCOT<br \/>\nand respondent\tNo. 2 paid the entire amount of Rs. 38 lakhs<br \/>\nby September 15, 1993.\n<\/p>\n<p>     On September  19, 1993, respondent No. 1 filed the writ<br \/>\npetition giving rise to this appeal in the Madras High Court<br \/>\nwherein the  action of\tSIPCOT\tin  selling  the  assets  to<br \/>\nrespondent No.\t2 was  challenged on  the  ground  that\t the<br \/>\nmarket value  of the assets would be Rs. 72.60 lakhs and the<br \/>\nsale of\t the same  for Rs.  38 lakhs to respondent No. 2 was<br \/>\ninvalid in view of the law laid down by this Court in <a href=\"\/doc\/494062\/\">Mahesh<br \/>\nChandra v.  Regional Manager,  U.P. Financial  Corporation &amp;<br \/>\nOrs.<\/a> 1993  (2) SCC 279. The writ petition was disposed of by<br \/>\na learned  single Judge\t of the High Court by Judgment dated<br \/>\nDecember 1, 1993. The learned single Judge has observed:\n<\/p>\n<blockquote><p>\t  &#8220;A   perusal\t of   the   pleadings<br \/>\n     certainly shows that the Corporation had<br \/>\n     been very\tconsiderate in giving time to<br \/>\n     the  petitioner   company\t for   making<br \/>\n     payments. Certainly  I cannot  say\t that<br \/>\n     the Corporation  had acted\t in a  manner<br \/>\n     referred to  by  the  Supreme  Court  of<br \/>\n     India in Mahesh Chandra&#8217;s case.&#8221;<\/p><\/blockquote>\n<p>     The learned single Judge was, however, of the view that<br \/>\nSIPCOT had  acted in  haste and\t hurry, to  the prejudice of<br \/>\nrespondent No.\t1, in  taking  possession  of  the  unit  on<br \/>\nJanuary 5,  1993 and in selling the same and the said action<br \/>\nof the\tSIPCOT violated\t the directions\t of  this  Court  in<br \/>\nMahesh Chandra\tcase (supra).  The learned single Judge held<br \/>\nthat respondent\t No. 1 could not get any relief unless he is<br \/>\nwilling to  deposit the\t said sale  price of  Rs.  38  lakhs<br \/>\nwithin a  reasonable time.  Therefore,\tthe  learned  single<br \/>\nJudge quashed  the sale\t of the\t mortgaged assets by SIPCOT,<br \/>\nsubject to the following directions:\n<\/p>\n<blockquote><p>     (i)  The\timpugned  proceedings\tdated<br \/>\n     6.9.93 shall  stand  set  aside  if  the<br \/>\n     petitioner\t company  deposits  with  the<br \/>\n     first respondent  a sum  of Rs. 20 lakhs<br \/>\n     on or  before 31.12.93 and a further sum<br \/>\n     of Rs. 18 lakhs on or before 20.1.94.\n<\/p><\/blockquote>\n<blockquote><p>     (ii) On  the petitioner  depositing  the<br \/>\n     said sum  of Rs.  38 lakhs\t on or before<br \/>\n     20.1.1994, or  at any  earlier point  of<br \/>\n     time,  the\t  respondents  1   to  3  are<br \/>\n     directed to  redeliver the\t unit back to<br \/>\n     the petitioner company.\n<\/p><\/blockquote>\n<blockquote><p>     (iii) In the event of the non-payment of<br \/>\n     any one  of the amounts on or before the<br \/>\n     dates above mentioned the impugned order<br \/>\n     dated 6.9.93  shall stand\tvalidated. It<br \/>\n     will then\tbe open\t to the respondents 1<br \/>\n     to 3 to hand over the unit to the fourth<br \/>\n     respondent.\n<\/p><\/blockquote>\n<blockquote><p>     (iv) The balance of amount payable under<br \/>\n     the loan  transaction shall be repaid in<br \/>\n     monthly  instalments  of  Rs.  3  lakhs,<br \/>\n     commencing from  February 1994,  payable<br \/>\n     on or  before 10.3.1994,  and so on till<br \/>\n     the entire payment is complete.<br \/>\n     The  default   of\t any   one   of\t  the<br \/>\n     instalments under clause (iv) it will be<br \/>\n     open to the respondent to take action in<br \/>\n     accordance with law.&#8221;<\/p><\/blockquote>\n<p>     Respondent No. 1 did not, however, comply with the said<br \/>\ndirections given by the learned single Judge. Respondent No.<br \/>\n1 filed\t an appeal  (W.A.No.97 of 1994) against the Judgment<br \/>\nof the learned single Judge. The said appeal was disposed of<br \/>\nby a  Division Bench  of the  High Court  by Judgment  dated<br \/>\nFebruary 23,  1994. The learned Judges were of the view that<br \/>\nthere was  failure on  the part\t of  SIPCOT  to\t follow\t the<br \/>\nguidelines laid\t down by  this Court  in Mahesh Chandra case<br \/>\n(supra) in  the matter\tof sale of the unit by tender and by<br \/>\nprivate negotiations.  The learned  Judges of the High Court<br \/>\nhave observed  that since  the financial agency had advanced<br \/>\nin all\tRs. 44.80 lakhs (Rs. 38 lakhs term loan and Rs. 6.80<br \/>\nlakhs soft loan) in the year 1987, it is clear that the unit<br \/>\nwas worth  more than  Rs. 44.80\t lakhs even in the year 1987<br \/>\nand, therefore, it could not have been sold in the year 1993<br \/>\nfor a  sum of  Rs. 38  lakhs only.  The learned\t Judges also<br \/>\nobserved that  instead of  imposing conditions on respondent<br \/>\nNo. 1  for setting  aside the sale by tender even though the<br \/>\nsaid sale  was found  illegal and opposed to the judgment in<br \/>\nMahesh Chandra\tcase (supra)  the learned single Judge ought<br \/>\nto have\t set aside  the sale  and directed the appellants to<br \/>\nput up\tthe unit  for sale  afresh by giving some reasonable<br \/>\ntime to\t respondent No.\t 1 to repay the amount, if possible.<br \/>\nAs regards  taking possession  of unit\tby the\tSIPCOT,\t the<br \/>\nlearned Judge observed:\n<\/p>\n<blockquote><p>\t  &#8220;No grievance\t is  made  before  us<br \/>\n     that there\t was anything  illegal in the<br \/>\n     Financial Corporation  taking possession<br \/>\n     of the  unit, rightly  also, because the<br \/>\n     petitioner was  a defaulter. In spite of<br \/>\n     the fact that several opportunities were<br \/>\n     given to  it for  repaying the amount as<br \/>\n     per the instalments, it failed to repay.<br \/>\n     Therefore, after  setting aside the sale<br \/>\n     effected\tin    favour   of   the\t  4th<br \/>\n     respondent, the  Financial Agency has to<br \/>\n     take back the possession of the unit and<br \/>\n     continue to  keep it  in its possession.<br \/>\n     Thereafter, it  has  to  take  steps  to<br \/>\n     bring the unit for sale afresh.&#8221;<\/p><\/blockquote>\n<p>     The learned  Judges were  of the  view that  before the<br \/>\nunit was  brought for  sale afresh, a reasonable time should<br \/>\nbe given  to respondent\t No. 1 to make payment of the entire<br \/>\namount which  had become  due as  on January  1, 1994 and if<br \/>\nrespondent No.\t1 failed to pay the entire amount, which has<br \/>\nbecome due  as per the terms and conditions of the term loan<br \/>\nand soft  loan on  January 1,  1994,  within  the  specified<br \/>\nperiod, it  would be  open to  the appellants  to put up the<br \/>\nunit for  sale in  accordance with  law. The learned Judges,<br \/>\ntherefore, modified  the order\tpassed by the learned single<br \/>\nJudge and directed as under:\n<\/p>\n<blockquote><p>\t  &#8220;The\tsale   by  tender   held   by<br \/>\n     respondents 1  to\t3  and\tconfirmed  in<br \/>\n     favour of\trespondent No.4 is set aside.<br \/>\n     Respondents 1  to 3  shall take the unit<br \/>\n     into possession  on refunding the amount<br \/>\n     to\t the   4th  respondent.\t Accordingly,<br \/>\n     respondent\t No.   4  shall\t  hand\t over<br \/>\n     possession of  the unit to respondents 1<br \/>\n     to\t 3.   The   petitioner\/appellant   is<br \/>\n     granted time till the end of April, 1994<br \/>\n     to pay  the  entire  amount  that\twould<br \/>\n     become due\t on 1.1.1994 as per the terms<br \/>\n     of the  term loan and soft loan and also<br \/>\n     to pay the remaining amount on 1.6.1994.<br \/>\n     In the  event  the\t petitioner\/appellant<br \/>\n     pays  the\t amount\t as   per  the\tfirst<br \/>\n     condition on or before 30th April, 1994,<br \/>\n     respondents 1  to 3  shall hand over the<br \/>\n     unit to the petitioner\/appellant. In the<br \/>\n     event the\tpetitioner\/appellant fails to<br \/>\n     pay the  amount  as  per  the  aforesaid<br \/>\n     condition respondents 1 to 3 shall be at<br \/>\n     liberty to\t proceed to  put up  the unit<br \/>\n     for  sale\t by  auction   or  tender  in<br \/>\n     accordance with  law and in terms of the<br \/>\n     judgment of  the Supreme Court in Mahesh<br \/>\n     Chandra&#8217;s case (AIR 1993 SC 935).&#8221;<\/p><\/blockquote>\n<p>     Feeling aggrieved\tby the\tsaid directions given in the<br \/>\nsaid Judgment  of the  Division Bench of the High Court, the<br \/>\nappellants have filed this appeal.\n<\/p>\n<p>     At the  out set  it may  be stated that SIPCOT has been<br \/>\nquite accommodating  in the  matter of repayment of the dues<br \/>\nby respondent  No. 1  and has rescheduled the payment of the<br \/>\ninstalments a  number of times and the notice of foreclosure<br \/>\nwhich was  given on  October 24,  1991 was also withdrawn on<br \/>\nthe basis  of  the  assurance  given  by  respondent  No.  1<br \/>\nregarding  payment   of\t the   dues.  A\t  second  notice  of<br \/>\nforeclosure  had  to  be  issued  on  June  17,\t 1992  since<br \/>\nrespondent No.\t1 failed to abide by the assurances given by<br \/>\nit.  Respondent\t No.  1\t also  failed  to  comply  with\t the<br \/>\ndirections that\t were given  by the  High Court in its order<br \/>\ndated December\t7, 1992\t while disposing of the earlier Writ<br \/>\nPetition No.  14479 of\t1992 of\t by respondent\tNo. 1. It is<br \/>\nonly thereafter\t that SIPCOT  took possession of the unit of<br \/>\nrespondent No.\t1 on January 5, 1992 and started proceedings<br \/>\nfor the\t sale  of  the\tunit.  It  would  thus\tappear\tthat<br \/>\nsufficient latitude  was given by SIPCOT to respondent No. 1<br \/>\nto honour  its commitments in regard to the payment of loan,<br \/>\nbut respondent\tNo. 1  was  making  continuous\tdefaults  in<br \/>\ndischarging its\t obligations in\t that  regard.\tThe  learned<br \/>\nsingle Judge  has also\tfound  that  SIPCOT  had  been\tvery<br \/>\nconsiderate in\tgiving time  to respondent  No. 1 for making<br \/>\npayments and  it cannot\t be said that SIPCOT has acted in an<br \/>\narbitrary or unreasonable manner. So also the learned judges<br \/>\non the\tDivision Bench\tof the\tHigh Court  have found\tthat<br \/>\nrightly no  grievance had  been made that there was anything<br \/>\nillegal in  SIPCOT taking  possession of  the  unit  because<br \/>\ninspite of the fact that several opportunities were given to<br \/>\nrespondent  No.\t 1  for\t repaying  the\tamount\tas  per\t the<br \/>\ninstalments, it\t failed to  repay. The\tonly fault  that has<br \/>\nbeen found in the action taken by SIPCOT is in the matter of<br \/>\nthe procedure  followed for  sale of the mortgaged assets of<br \/>\nrespondent No.\t1. The\tlearned single\tjudge as well as the<br \/>\nDivision Bench\tof the\tHigh Court  have held  that the said<br \/>\nsale was  not conducted\t in accordance\twith the  guidelines<br \/>\nlaid down  by this  Court in  Mahesh  Chandra  case  (supra)<br \/>\ninasmuch as  (i) the  sale was\tnot held  by auction and was<br \/>\nheld by\t inviting tenders followed by negotiations; (ii) the<br \/>\nprice for  which the properties were sold was low; and (iii)<br \/>\nbefore\taccepting   the\t offer\tof  Rs.\t 38  lakhs  made  by<br \/>\nrespondent No.\t2, no intimation was given to respondent No.<br \/>\n1 so as to enable it to make a higher offer.\n<\/p>\n<p>     In the  matter of sale of public property, the dominant<br \/>\nconsideration is  to secure  the best price for the property<br \/>\nto be  sold. This can be achieved only when there is maximum<br \/>\npublic participation  in the  process of sale and every body<br \/>\nhas an\topportunity of making an offer. Public auction after<br \/>\nadequate publicity ensures participation of every person who<br \/>\nis interested  in  purchasing  the  property  and  generally<br \/>\nsecures the  best price.  But  many  times  it\tmay  not  be<br \/>\npossible to secure the best price by public auction when the<br \/>\nbidders join together so as to depress the bid or the nature<br \/>\nof the property to be sold is such that suitable bid may not<br \/>\nbe received  at public\tauction. In  that event,  the  other<br \/>\nsuitable mode  for selling  of property\t can be\t by inviting<br \/>\ntenders. In  order to  ensure  that  such  sale\t by  calling<br \/>\ntenders\t does\tnot  escape   attention\t of   an   intending<br \/>\nparticipant, it\t is essential that every endeavour should be<br \/>\nmade to\t give wide publicity so as to get the maximum price.<br \/>\nThese  considerations\twhich  govern  the  sale  of  public<br \/>\nproperty have  been held  to be\t applicable  to\t a  sale  of<br \/>\nproperty by  the State\tFinancial Corporations under section<br \/>\n29 of  the Act\tin Mahesh Chandra case (supra). In that case<br \/>\nthis  Court   has  held\t that  sale  by\t public\t auction  is<br \/>\nuniversally recognised\tto be  the best and most fair method<br \/>\nand is\tbeyond reproach\t and, if it is not possible to adopt<br \/>\nthe said  method, sale\tmay be held by inviting tenders, but<br \/>\nin that\t event every  endeavour should\tbe made to give wide<br \/>\npublicity to  get  the\tmaximum\t price.\t The  said  decision<br \/>\ncannot, therefore,  be construed  as laying down that a sale<br \/>\nby tender  is impermissible and invalid. The learned judges,<br \/>\nin that\t case, have  referred to the decisions of this Court<br \/>\nin <a href=\"\/doc\/497388\/\">Sachidananda Pandey v. State of West Bengal,<\/a> 1987 (2) SCR<br \/>\n223 and\t <a href=\"\/doc\/830683\/\">Haji T.M.  Hassan v.  Kerala Financial Corporation,<\/a><br \/>\n1988 (1)  SCR 1079, wherein it has been held that one of the<br \/>\nmodes of securing the public interest, when it is considered<br \/>\nnecessary to  dispose of a property, is to sell the property<br \/>\nby  public  auction  or\t by  inviting  tenders.\t It  cannot,<br \/>\ntherefore, be  said that  a sale by inviting tenders is ipso<br \/>\nfacto invalid.\tThe validity  of such a sale will have to be<br \/>\nconsidered in  the light  of the  facts and circumstances of<br \/>\nthe particular case.\n<\/p>\n<p>     In the  facts and circumstances of this case, it cannot<br \/>\nbe said\t that the  failure on the part of SIPCOT to sell the<br \/>\nproperty by  public auction and selling it to respondent No.<br \/>\n2 by  inviting tenders\tis bad\tfor the reason that the said<br \/>\nproperty has  not received  the best price in the market. As<br \/>\nindicated earlier  in response to the first advertisement no<br \/>\noffer was  received from  anybody and  in  response  to\t the<br \/>\nsecond advertisement  also only\t one offer was received from<br \/>\nrespondent No.\t2 and that too was only for Rs. 14.26 lakhs.<br \/>\nThrough negotiations  SIPCOT was  able to  secure a  revised<br \/>\noffer of Rs. 38 lakhs, which was more than the amount of Rs.<br \/>\n36.44 lakhs,  at which\tthe unit had been valued. Respondent<br \/>\nNo. 1 had sufficient opportunity, during the pendency of the<br \/>\nmatter in the High Court as well as in this Court, to secure<br \/>\nan offer  higher than Rs. 38 lakhs made by respondent No. 2,<br \/>\nbut he\thas not\t been able to bring any higher offer. In the<br \/>\ncircumstances it  cannot be said that the price at which the<br \/>\nunit was sold was low. The sanction of the loan of Rs. 44.80<br \/>\nlakhs in  1987 cannot  afford a\t basis for  holding that the<br \/>\nvalue of  the unit  in 1993 could not be less than Rs. 44.80<br \/>\nlakhs. The  value of  the plant\t and  machinery\t could\thave<br \/>\nfallen on  account of  its being used during the period from<br \/>\n1987 to\t 1993 or  due to  the same  getting outdated. If the<br \/>\nvalue of the unit was higher than Rs. 38 lakhs it would have<br \/>\nbeen possible for respondent No. 2 to obtain a better offer.<br \/>\nHis failure  to do  so negatives the inference that the sale<br \/>\nprice of  Rs. 38 lakhs is low. Similarly, the failure on the<br \/>\npart of SIPCOT to give intimation to respondent No. 1 before<br \/>\naccepting the  offer of\t Rs. 38 lakhs made by respondent No.<br \/>\n2, is  of little  consequence in  the  facts  of  this\tcase<br \/>\nbecause respondent No. 1 has had sufficient opportunity both<br \/>\nbefore the  High Court\tas well as in this Court to obtain a<br \/>\nhigher offer, but he has failed to do so.\n<\/p>\n<p>     In these  circumstances no\t fault can be found with the<br \/>\naction of SIPCOT in selling the unit to respondent No. 2 for<br \/>\nRs. 38\tlakhs and the Judgment of the High Court, in setting<br \/>\naside the said sale cannot be upheld.\n<\/p>\n<p>     The appeal\t is, therefore, allowed. The Judgment of the<br \/>\nDivision Bench\tdated February 23, 1994 in Writ Petition No.<br \/>\n97 of 1994 as well as Judgment of learned single Judge dated<br \/>\nDecember 1,  1993 in Writ Petition No. 18048 of 1993 are set<br \/>\naside and  the said  writ petition filed by respondent No. 1<br \/>\nis dismissed.  Having regard to the facts and circumstances,<br \/>\nthere\t will\t  no\tbe     order\tas     to     costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India The Chairman And Managing &#8230; vs Contromix Pvt.Ltd. By Its &#8230; on 12 May, 1995 Equivalent citations: 1995 AIR 1632, 1995 SCC (4) 595 Author: S Agrawal Bench: Agrawal, S.C. (J) PETITIONER: THE CHAIRMAN AND MANAGING DIRECTOR,SIPCOT, MADRAS &#8211; 8 AND OR Vs. RESPONDENT: CONTROMIX PVT.LTD. BY ITS DIRECTOR(FINANCE) SEETHARAMAN, MAD [&hellip;]<\/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":[30],"tags":[],"class_list":["post-236514","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Chairman And Managing ... vs Contromix Pvt.Ltd. By Its ... on 12 May, 1995 - Free Judgements of Supreme Court &amp; 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\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Chairman And Managing ... vs Contromix Pvt.Ltd. By Its ... on 12 May, 1995 - Free Judgements of Supreme Court &amp; High Court | Legal India\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995\" \/>\n<meta property=\"og:site_name\" content=\"Free Judgements of Supreme Court &amp; High Court | Legal India\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LegalindiaCom\/\" \/>\n<meta property=\"article:published_time\" content=\"1995-05-11T18:30:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2016-04-11T03:09:20+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1\" \/>\n\t<meta property=\"og:image:width\" content=\"512\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Legal India Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@legaliadmin\" \/>\n<meta name=\"twitter:site\" content=\"@Legal_india\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Legal India Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"16 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995\"},\"author\":{\"name\":\"Legal India Admin\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/person\\\/0bfdffe9059fb8bb24a86d094609c5ea\"},\"headline\":\"The Chairman And Managing &#8230; vs Contromix Pvt.Ltd. By Its &#8230; on 12 May, 1995\",\"datePublished\":\"1995-05-11T18:30:00+00:00\",\"dateModified\":\"2016-04-11T03:09:20+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995\"},\"wordCount\":3180,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\"},\"articleSection\":[\"Supreme Court of India\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995\",\"name\":\"The Chairman And Managing ... vs Contromix Pvt.Ltd. By Its ... on 12 May, 1995 - Free Judgements of Supreme Court &amp; High Court | Legal India\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#website\"},\"datePublished\":\"1995-05-11T18:30:00+00:00\",\"dateModified\":\"2016-04-11T03:09:20+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Chairman And Managing &#8230; vs Contromix Pvt.Ltd. By Its &#8230; on 12 May, 1995\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#website\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\",\"name\":\"Free Judgements of Supreme Court & High Court | Legal India\",\"description\":\"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\"},\"alternateName\":\"Free judgements of Supreme Court & High Court of India | Legal India\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\",\"name\":\"Judgements of Supreme Court & High Court | Legal India\",\"alternateName\":\"Legal India\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/wp-content\\\/uploads\\\/sites\\\/5\\\/2025\\\/09\\\/legal-india-icon.jpg\",\"contentUrl\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/wp-content\\\/uploads\\\/sites\\\/5\\\/2025\\\/09\\\/legal-india-icon.jpg\",\"width\":512,\"height\":512,\"caption\":\"Judgements of Supreme Court & High Court | Legal India\"},\"image\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/LegalindiaCom\\\/\",\"https:\\\/\\\/x.com\\\/Legal_india\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/person\\\/0bfdffe9059fb8bb24a86d094609c5ea\",\"name\":\"Legal India Admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"caption\":\"Legal India Admin\"},\"sameAs\":[\"https:\\\/\\\/www.legalindia.com\",\"https:\\\/\\\/x.com\\\/legaliadmin\"],\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/author\\\/legal-india-admin\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The Chairman And Managing ... vs Contromix Pvt.Ltd. By Its ... on 12 May, 1995 - Free Judgements of Supreme Court &amp; High Court | Legal India","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995","og_locale":"en_US","og_type":"article","og_title":"The Chairman And Managing ... vs Contromix Pvt.Ltd. By Its ... on 12 May, 1995 - Free Judgements of Supreme Court &amp; High Court | Legal India","og_url":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995","og_site_name":"Free Judgements of Supreme Court &amp; High Court | Legal India","article_publisher":"https:\/\/www.facebook.com\/LegalindiaCom\/","article_published_time":"1995-05-11T18:30:00+00:00","article_modified_time":"2016-04-11T03:09:20+00:00","og_image":[{"width":512,"height":512,"url":"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1","type":"image\/jpeg"}],"author":"Legal India Admin","twitter_card":"summary_large_image","twitter_creator":"@legaliadmin","twitter_site":"@Legal_india","twitter_misc":{"Written by":"Legal India Admin","Est. reading time":"16 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995#article","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995"},"author":{"name":"Legal India Admin","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea"},"headline":"The Chairman And Managing &#8230; vs Contromix Pvt.Ltd. By Its &#8230; on 12 May, 1995","datePublished":"1995-05-11T18:30:00+00:00","dateModified":"2016-04-11T03:09:20+00:00","mainEntityOfPage":{"@id":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995"},"wordCount":3180,"commentCount":0,"publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"articleSection":["Supreme Court of India"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995","url":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995","name":"The Chairman And Managing ... vs Contromix Pvt.Ltd. By Its ... on 12 May, 1995 - Free Judgements of Supreme Court &amp; High Court | Legal India","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/#website"},"datePublished":"1995-05-11T18:30:00+00:00","dateModified":"2016-04-11T03:09:20+00:00","breadcrumb":{"@id":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.legalindia.com\/judgments\/the-chairman-and-managing-vs-contromix-pvt-ltd-by-its-on-12-may-1995#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.legalindia.com\/judgments\/"},{"@type":"ListItem","position":2,"name":"The Chairman And Managing &#8230; vs Contromix Pvt.Ltd. By Its &#8230; on 12 May, 1995"}]},{"@type":"WebSite","@id":"https:\/\/www.legalindia.com\/judgments\/#website","url":"https:\/\/www.legalindia.com\/judgments\/","name":"Free Judgements of Supreme Court & High Court | Legal India","description":"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.","publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"alternateName":"Free judgements of Supreme Court & High Court of India | Legal India","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.legalindia.com\/judgments\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.legalindia.com\/judgments\/#organization","name":"Judgements of Supreme Court & High Court | Legal India","alternateName":"Legal India","url":"https:\/\/www.legalindia.com\/judgments\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/","url":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","contentUrl":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","width":512,"height":512,"caption":"Judgements of Supreme Court & High Court | Legal India"},"image":{"@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/LegalindiaCom\/","https:\/\/x.com\/Legal_india"]},{"@type":"Person","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea","name":"Legal India Admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","caption":"Legal India Admin"},"sameAs":["https:\/\/www.legalindia.com","https:\/\/x.com\/legaliadmin"],"url":"https:\/\/www.legalindia.com\/judgments\/author\/legal-india-admin"}]}},"modified_by":null,"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/236514","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/comments?post=236514"}],"version-history":[{"count":0,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/236514\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/media?parent=236514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/categories?post=236514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/tags?post=236514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}