N. C. JAIN, J. ( 1 ) THE company In question, namely, M/s. Bhadohi Woollen Limited (in liquidation) was ordered to be wound up by this Court by order dated 20-2-1996 on the recommendation of BIFR and the Official liquidator was appointed as liquidator of the company who took possession of the inaovable and immovable assets belonging to the said company (in liquidation) from the ex-management. The company was a State of U. P. undertaking. Under the Courts order, the properties of the company were advertised for sale more than once and ultimately by order dated 5-11-99, the highest offer of M/s. Monerca Engineers, A-8 Govindpur Colony, Allahabad of Rs. 3,03,00,000/- was accepted. The said auction purchase is the applicant of applications A-14 and a-15. ( 2 ) AS recorded in the order dated 5-11-99, the said auction purchaser had prayed for six months time to make the payment. This prayer was accepted by the Court and the amount was directed to be paid as per the following schedule. ( 3 ) IT was also directed that the possession of the property in (question) would be handed over to the purchaser on payment of the entire money. The auction-purchaser was also permitted to place its security over the property. The said purchaser had submitted a Bank Draft for a sum of Rs. 5,00,000/-, which was accepted and it was conditioned that in case of default in payment of instalments, the same would be forfeited. In the closing part of the order dated 5-11-99, it was stated that the Official Liquidator shall take steps for removal of encroachment, if any by any person, expeditiously. ( 4 ) IT is a fact that the auction purchaser-applicant did not make any payment as per order dated 5-11-99 over and above the Bank Draft of Rs. 5 Lacs that had been presented as earnest money while offering the bid. Through application A-14 supported by an affidavit, the prayer was made to modify the order dated 5-11-99 and to permit the applicant to pay the entire outstanding amount of Rs. 2. 98 Crores in one single instalment by 15-4-2000 with the entire vacant possession being made available with the removal of encroachment. The case of applicant is that a large number of persons have made encroachments over the assets/ property of the company and they continue to be the unauthorised occupants. 2. 98 Crores in one single instalment by 15-4-2000 with the entire vacant possession being made available with the removal of encroachment. The case of applicant is that a large number of persons have made encroachments over the assets/ property of the company and they continue to be the unauthorised occupants. A list of such persons has been annexed as annexure 2 to the affidavit filed in support of application A-14. The contention is that the official Liquidator has not taken any steps to remove any encroachment. The applicant is keen to run the unit and would like to carry out necessary repairs and renovation to start early functioning which can be possible only after the entire vacant possession is handed over to the applicant company. ( 5 ) DURING the pendency of the application A-14, the applicant (auction-purchaser) made another application A-15 on 17-4-2000 with the prayer to direct the Official Liquidator to remove the entire encroachment forthwith from illegal occupants and thereafter to be allowed only one months time to pay the entire amount of Rs. 2. 98 crores. It also sought the stay of the operation of an order dated 29-3-2000 passed by the Official Liquidator whereby, he had stated that if the instalments required to be paid by 15-4-2000, were not paid by the applicant company, the earnest money of Rs. 5 Lacs would be forfeited as per Courts order (5-11-99) and the property would be readvertised for sale. It has also been averred in the affidavit filed in support of this application that the security guards deputed by the Official Liquidator are harassing the guards deputed by the applicant as per order dated 5-11-99. ( 6 ) TWO counter-affidavits and a supplementary counter-affidavit have been filed by the Official liquidator which are paper Nos. A-16, A-17 and A-20 whereas two rejoinder affidavits have been put forth by the applicant, which are A-18 and A-22. An additional factor has been averred by the applicant in rejoinder affidavit A-18 that one motorcycle lying in the premises of the company which was earlier in possession of same erstwhile member of the staff of the company, was brought to the company premises by some person said to be the staff of the Official liquidator and was then taken away to the office of the Official Liquidator. Allahabad on 26-4-2000 on the pretext that it was required in the office of Official Liquidator. The security persons of the applicant informed the applicant about this fact and Bhuwan Chandra Pant (a partner of the applicant) sent a complaint about this fact to the Superintendent of Police, Bhadohi by registered post on 1-5-2000. ( 7 ) SHORTLY put, the stand taken by the Official Liquidator is that the applicant is simply putting off the payment of instalments on imaginary grounds. Not a single instalment has been paid by it in accordance with order dated 5-11-99. Actually, the applicant is not a genuine purchaser and simply wants to while away time and to delay the process of the conclusion of sale proceedings. In compliance of the order dated 5-11-99 for removal of the encroachments, he has already issued necessary notices under Section 456 (2)/468/477 read with Section 630 of the Companies act, 1956 to illegal occupants and the proceedings are afoot in this behalf. However, the removal of encroachment was not a pre-condition for the payment of instalments by the purchaser-applicant. The property was advertised for sale "as IS WHERE IS BASIS" and it was with that knowledge that the tenderers including the applicant submitted tenders after inspection of the property. There was no precondition of handing over the vacant possession to the purchaser, but on the own request of the applicant who had found certain encroachment on the property of the company at the time of inspection, the Honble Court directed him (Official liquidator) under order dated 5-11-99 to take steps for its removal. The letter dated 29-3-2000 had been issued by him (Official Liquidator) in terms of the Courts order dated 5-11-99. Actually, the applicant started visiting factory premises with the outside customers and it was objected to by the security in-charge put by the Official Liquidator. The applicant is only interested in keeping the matter hanging simply with the deposit of Rs. 5 lacs as earnest money and is searching a better customer for out and out sale to make a hefty profit out of the transaction. It is for this reason that the applications have been made by the applicant to gain time. The applicant is only interested in keeping the matter hanging simply with the deposit of Rs. 5 lacs as earnest money and is searching a better customer for out and out sale to make a hefty profit out of the transaction. It is for this reason that the applications have been made by the applicant to gain time. ( 8 ) AS regards the allegation of removal of one motorcycle of the company from its premises, the case of the Official Liquidator is that there were four vehicles, two motorcycles and two cars. Two cars belonging to the company had been disposed of much earlier which were lying in the premises and they were riot included in the present sale. One Rajdoot motorcycle bearing No. URZ-4267 was with one Sunil Kumar Jha and the same was handed over by him to the Official liquidator on the date of possession and was kept in the factory itself. The same is still lying there. The other Rajdoot motorcycle bearing No. UHY-2308 was with one Sri Ram Siromani tripathi and the same was not handed over to the Official Liquidator. The extract of valuation report has been annexed as Annexure 9 to the supplementary counter-affidavit A-20, which mentions that motorcycle had not been seen. Ram Siromani Tripathi was repeatedly contacted by the Official Liquidator to hand over the possession of the motorcycle in his possession and first letter in this behalf was written to him by the Official Liquidator on 9-3-1998. It was only on 3-4-2000 that Ram Siromani Tripathi agreed to hand over the motorcycle to the Official liquidator. His letter dated 3-4-2000 has been annexed as Annexure 11 to the supplementary counter-affidavit A-20. The Official Liquidator deputed Ram Jeet Yadav, as per letter dated 11-4-2000, to take possession of the motorcycle from Ram Siromani Tripathi and he took the possession of the rajdoot motorcycle No. UHY-2308 from him on 26-4-2000. The said motorcycle is not in the working condition and is lying in the storeroom of the Official liquidator. It was never the item of sale because it was not in the custody and possession of the Official Liquidator. Therefore, the purchaser cannot claim any right on it. The purchaser has simply made false allegation against the Official Liquidator. ( 9 ) I have heard Sri Pradeep Kumar, learned counsel for the petitioner and the Official Liquidator. It was never the item of sale because it was not in the custody and possession of the Official Liquidator. Therefore, the purchaser cannot claim any right on it. The purchaser has simply made false allegation against the Official Liquidator. ( 9 ) I have heard Sri Pradeep Kumar, learned counsel for the petitioner and the Official Liquidator. I have judicially weighed and considered the respective contentions raised from either side, having regard to the material on record. The advertisement issued for the sale of the assets of the company [in liquidation) specifically recited that the property would be sold on "as IS WHERE IS BASIS". Naturally, the purchaser (applicant) must have offered the bid after inspection of the unit, a date whereof had been indicated in the advertisement itself as 24-9-99. It follows that it must have necessarily come to the notice of the applicant that there were certain encroachments on the property of the company. The order dated 5-11-99 whereby the bid of the applicant amounting to Rs. 3,03,00,000/- had been accepted, clearly recites that the entire payment was to be made in four instalments of Rs. 75,75,000/- each, starting on 5-1-2000 and ending on or before 5-5-2000. The order also clearly states that this period of six months for payment of the bid money had been allowed on the prayer of bidder (applicant ). It was provided in the order that the possession of the property would be delivered to the purchaser after the entire amount was received. Of course, in concluding part of the order, the Official Liquidator was required to take steps for removal of encroachment, if any, by any person, expeditiously. But this removal of encroachment was not a precondition for the payment of instalments by the purchaser (applicant ). The order does not say this either that the vacant possession was to be delivered to the purchaser. It cannot be disputed that constructive possession is also a form of possession. It may also be stated as a passing reference to auction like present one, the property gets sold at much lesser price than its actual value. This is simply an incidence of purchase in auction if certain encroachments are there on the property forming subject-matter of sale. No doubt, the Official Liquidator was required to take steps for removal of encroachment. This is simply an incidence of purchase in auction if certain encroachments are there on the property forming subject-matter of sale. No doubt, the Official Liquidator was required to take steps for removal of encroachment. But, as sworn by him in his affidavit, steps as per law have been taken by him in this behalf which are afoot. But in any view of the matter, non-removal of encroachment cannot provide a pretext to the purchaser not to make the payment of instalments as required by the order dated 5-11-99. The purchaser has not even exhibited his bona fides. He did not make payment of a single instalment after the order dated 5-11-99. The purchaser has simply tried to while away time. By first application dated 5-1-2000 (A-14), time was sought to make the entire balance payment of Rs. 2. 98 Crores by 15-4-2000. Then came the second application A-15 presented on 17-4-2000, coaching the prayer for payment of balance amount of Rs. 2. 98 Crores within one month after removal of encroachment by the Official Liquidator. Without paying asingle shell, there is only an attempt to keep the matter hanging fire on the pretext of encroachment, which was a fact well known to the purchaser in advance of offering bid. Actually, as I said above, the payment of instalments by the purchaser was not at all dependent of removal of encroachment by the Official Liquidator. Non-payment of instalments by the purchaser as per order dated 5-11-1999 has done more harm than any good. Had the payment of balance amount of Rs. 2. 98 Crores been made on due dates as per order dated 5-11-1999 liquidating the entire amount by 5-5-2000, the same would have earned interest in fixed deposit at the hands of the Official Liquidator for the period intervening in realisation of this amount and actual payment of dividend to the creditors of the company. The Official Liquidator has also argued that about Rs. 10,000/- per month are being spent as security charges due to the delay in conclusion of the sale matter, blame wherefor squarely lies at the door of the purchaser. Obviously, by not making payment, the purchaser has caused loss to the interest of the creditors of the company which is much more than Rs. 5 Lacs paid by it (purchaser) as earnest money. Obviously, by not making payment, the purchaser has caused loss to the interest of the creditors of the company which is much more than Rs. 5 Lacs paid by it (purchaser) as earnest money. The order dated 5-11-1999 clearly states that in case of default of payment of instalments, the earnest money of Rs. 5 Lacs would be forfeited. In view of this condition and having regard to the discussion made hereinabove, it is eminently required that the earnest money of Rs. 5 Lacs paid by the purchaser should be forfeited. ( 10 ) SO far as the removal of motorcycle from the premises of the company is concerned as alleged by the applicant, it does not seem to have any basis. The matter has been satisfactorily explained by the Official Liquidator in his supplementary counter-affidavit A-20. Rajdoot motorcycle bearing No. UHY-2308 having come in possession of the Official Liquidator in April 2000, it did not form part of the property offered for sale in respect of which the applicant offered bid and which came to be accepted by order dated 5-11-1999. ( 11 ) THERE also does not seem to be any possibility of pilferage or theft of the property from the company premises as admittedly the purchaser has also placed its security as permitted by the order dated 5-11-1999. ( 12 ) IN conclusion, I reject applications A-14 and A-15 put forth by the applicant (auction purchaser) and order for forfeiting of earnest money of Rs. 5 Lacs deposited by it. I also permit the Official Liquidator to readvertise the sale of the properties of the company (in liquidation) including both the motorcycles. He shall place a draft of advertisement for approval of the Court in chambers on coming Friday. .