A. K. SIKRI, J. ( 1 ) THIS application is filed by respondent company with the prayer to the effect that M/s. SICOM Ltd. be restrained from taking any further action for sale and auction of properties of the respondent company situated at Patiala and status quo regarding the ownership and possession till the disposal of this application an main company petition be maintained. It may be stated at the outset that SICOM Ltd. is the secured creditor who has to recover a sum of Rs. 20 crores approximately as on December 2002. It is a financial institution covered under the State Financial Corporation Act (hereinafter referred to as the act ) and is seeking to enforce its rights under Section 29 of the said Act. The land and building as well as plant and machinery of the respondent company which was mortgaged with SICOM Ltd. was auctioned and it has received a bid of Rs. 12. 5 crores from M/s. Ceylon Biscuits Ltd. which has been accepted by SICOM Ltd. . It is at this stage the respondent company has approached this Court by way of the aforesaid application making the prayers delineated above. Learned counsel for SICOM Ltd. submitted that no reply was required to be filed and he would argue the matter on the basis of various orders passed in this company petition as well as in Execution No. 288/2003. The matter was accordingly heard. For proper adjudication of this application it would be apposite to refer to some factual matrix of the case. One NRI Lead Bank purported to be a financer of the respondent company had obtained an award against the respondent company. In order to enforce that award Execution No. 288/2003 was filed. SICOM Ltd. is J. D. No. 3 in the said execution proceedings. It is not necessary to state, at this stage, as to how this award came to be passed and the methodology which was adopted in making SICOM Ltd. as well as other financial institutions as parties and then impleading all of them as judgment debtors along with the respondent company. Suffice it to state that before the said arbitral proceedings were initiated by NRI Lead Bank, SICOM Ltd. , exercising its powers under Section 29 of the Act, had taken over the assets, namely, building, plant and machinery etc. Suffice it to state that before the said arbitral proceedings were initiated by NRI Lead Bank, SICOM Ltd. , exercising its powers under Section 29 of the Act, had taken over the assets, namely, building, plant and machinery etc. of the respondent company and in the arbitral award it was directed that the possession thereof should be handed back to the respondent company. Naturally, therefore, in these execution proceedings, stand of SICOM Ltd. is that it is a collusive award and fraud was played upon SICOM Ltd. and other financial institutions. However, at this stage, I am not expressing any opinion on these issues and these facts are noted only to understand the respective stand of the parties. ( 2 ) AS SICOM Ltd. wanted to go ahead with the sale of the unit and it was objected to by NRI Lead Bank as well as the respondent company, this Court in execution proceedings passed orders from time to time in this behalf. It would be appropriate to refer to some of these orders. On 16th March, 2004 execution petition came up for hearing before this Court on original side. After hearing the submissions of the parties the executing Court gave green signal for sale of the properties. Relevant portion of the said order reads as under:- "however, in my considered opinion there cannot be any impediment in exercising the powers of selling the property through public auction in a transparent manner in an open court instead of allowing the judgment debtor No. 3 to sell the property at its end without any supervision of the Court. Since the Court will be supervising the sale to find out the best suitable bid, I find no ground to stay the proceedings, which is initiated by this Court. "on that date the Court also noted that some bids had been received pursuant to orders passed earlier. These bids were from three parties. In addition, M/s. Ceylon Biscuits Ltd. , which was also represented through counsel, showed its willingness to submit the bid and was allowed to do so in order to have better offer. One week time was given to them to submit the bid. These bids were from three parties. In addition, M/s. Ceylon Biscuits Ltd. , which was also represented through counsel, showed its willingness to submit the bid and was allowed to do so in order to have better offer. One week time was given to them to submit the bid. By the same order, the respondent company was also given a chance to obtain other/better offers from any other bidder and it was made clear that in all the offers/bids, which shall be submitted by any other bidder, the bidder shall have to comply with the formalities and terms that had been advertised on 23rd February, 2004. The matter was again taken up on 24th March, 2004 when the Court found that M/s. Ceylon Biscuits Ltd. had made an offer of Rs. 12. 5 crores and had deposited the earnest money of Rs. 25 lacs in dollars. There was another bidder, namely, M/s. Longulf Trading (India) Pvt. Ltd. which had submitted the bid of Rs. 11. 7 crores. It may be pointed out at this stage that three bids submitted earlier, note of which was taken in order dated 16th March, 2004, had given the bid of Rs. 2 crores, 8 crores and 4. 5 crores respectively. The bid of M/s. Ceylon Biscuits Ltd. was, therefore, the highest. However, before this bid could be accepted it was pointed out by learned counsel for the respondent company that the valuation of plant and machinery as well as land and building would be much higher than the one shown in the valuation report at Rs. 8,42,43,000/ -. In view of this dispute raised by the respondent company the Court directed SICOM Ltd. to get the entire assets re-evaluated by appointing an approved valuer and submit report before the next date. It was also directed that necessary papers of plant and machinery and other connected records shall be produced by the respondent company before the approved valuer in order to assist him in evaluating the property in question. It was also clarified that it would be open to the approved valuer to collect information in respect of various assets from other sources as well like customs authorities, Director General Foreign Trade and such like authorities. It was also clarified that it would be open to the approved valuer to collect information in respect of various assets from other sources as well like customs authorities, Director General Foreign Trade and such like authorities. The valuer was also directed to give separate valuation report for un-installed plant and machinery, if any, so as to enable this Court to ascertain the break-up value of various plant and machineries to facilitate the process of sale by the Court. ( 3 ) THE matter was thereafter taken up on 5th April, 2004 when valuation report was placed before the Court as per which the total value of the entire assets of the company was shown as approximately Rs. 10 croes. In view of the fresh valuation report, which was available with the Court, it was deemed proper to give another opportunity to all the five bidders to submit their fresh bids making it clear that the same could be submitted on or before 12th April, 2004 and they would also be allowed to participate in the inter se bidding, if any, held amongst the parties on the next date. The matter was adjourned to 19th April, 2004. Before the execution application could be taken by the executing Court on 19th April, 2004 a significant development took place in CP 204/2003, i. e. in the present proceedings. It may be pointed out that as many as 15 company petitions are filed under Section 433 (e) and (f) read with Sections 434 and 439 of the Companies Act for winding up of the respondent company which came up for hearing on 6th April, 2004 and after hearing the following order was passed:- "from the averments made in the petition, accompanying documents and the supporting affidavit, show that the respondent company is unable to pay its debts. Petition is admitted. Citation be issued in "economic Times" (English) and "navbharat Times" (Hindi) and in Delhi Gazette for the next date of hearing. Looking into the nature of allegations, and particularly the conduct of the Respondent, Official Liquidator, attached to this Court is appointed as Provisional Liquidator, who shall take over the assets,properties and books of accounts of the Respondent Company, at the earliest. Ex-Directors of the Respondent company are directed to appear in the Office of O. L. on 10. 5. Looking into the nature of allegations, and particularly the conduct of the Respondent, Official Liquidator, attached to this Court is appointed as Provisional Liquidator, who shall take over the assets,properties and books of accounts of the Respondent Company, at the earliest. Ex-Directors of the Respondent company are directed to appear in the Office of O. L. on 10. 5. 2004 at 11:000 a. m. and file the statement of affairs of the company. "it is thus clear that company petition was admitted and citations were directed to be published in the newspapers and the Court also appointed Official Liquidator attached to this Court as the Provisional Liquidator. On coming to know of the aforesaid order SICOM Ltd. moved CA 414/2004 in the company petition. Notice in the said application is issued for 31st August, 2004. In that application SICOM Ltd. prayed for stay of order dated 6th April, 2004 appointing the Provisional Liquidator and directing him to take over the assets, properties and books of accounts of the respondent company. It was pleaded that SICOM Ltd. being a secured creditor was in possession of the unit of Bakemans Industries Pvt. Ltd. situated at Patiala and, therefore, the same should not be disturbed and the Provisional Liquidator be directed not to take possession of the unit from SICOM Ltd. The order was passed to the effect that possession of SICOM Ltd. of the factory and plant and machinery etc. shall not be disturbed. ( 4 ) WHEN execution application came up for hearing on 19th April, 2004 the executing court was informed about the aforesaid developments in the company petition. The execution petition, in these circumstances, has been transferred to this Court, i. e. the Company Court. However, while transferring the execution petition in the order dated 19th April, 2004 the Court made certain observations and it would be useful to refer to the same:- "it is an admitted position that M/s. SICOM exercised the powers under section 29 of the State Financial Corporation Act and took over possession of the factory premises of M/s. Bakemans Industries Pvt. Ltd. and they continue to be in possession of the said premises. In order to recover the debts as owed to M/s. SICOM and other creditors by M/s. Bakemans Industries Pvt. Ltd, the process of sale was initiated by this Court. In order to recover the debts as owed to M/s. SICOM and other creditors by M/s. Bakemans Industries Pvt. Ltd, the process of sale was initiated by this Court. In view of the aforesaid order now passed by the learned Company Judge and since the Official Liquidator has been appointed as the Provisional Liquidator, it will be necessary and appropriate to order for placing this matter also before the Hon ble Company Judge to continue further proceedings in this case also. The matter, accordingly, is transferred to the learned Company Judge to continue the further proceedings and to pass appropriate orders in accordance with law. At this stage, counsel appearing for M/s. SICOM states that the power and right of M/s. SICOM under section 29 of the State Financial Corporation Act is an independent right which could be exercised by the said financial institution without any reference to the provisions of the Companies Act which is also so held in the decision of the Supreme Court in International Coach Builders Ltd. v. Karnataka State Financial Corporation, (2003) 10 S. C. C. 482. In this regard, reference may be made to paragraph 32 of the said judgment which states as follows:- "we, therefore, hold as under: 1. The right unilaterally exercisable under Section 29 of the SFC Act is available against a debtor, if a company, only so long as there is no order of winding up. 2. SFCs cannot unilaterally act to realise the mortgaged properties without the consent of the official liquidator representing workmen for the pari passu charge in their favour under the proviso to Section 529 of the Companies Act, 1956. 3. If the official liquidator does not consent, SFCs have to move the Company Court for appropriate directions to the official liquidator who is the pari passu charge-holder on behalf of the workmen. In any event, the official liquidator cannot act without seeking directions from the Company Court and under its supervision. " right of the financial corporation in respect of the factory premises shall be guided by section 29 of the State Financial Corporation Act read with decision of the Supreme Court in International Coach Builders Ltd. " ( 5 ) IN the aforesaid factual backdrop prayers in this application are to be considered. " right of the financial corporation in respect of the factory premises shall be guided by section 29 of the State Financial Corporation Act read with decision of the Supreme Court in International Coach Builders Ltd. " ( 5 ) IN the aforesaid factual backdrop prayers in this application are to be considered. It is contended by the applicant that the Court in Execution Petition had permitted sale of the property on the condition that the same would be under the supervision of the Court but SICOM Ltd. had gone ahead and accepted the offer of M/s. Ceylon Biscuits Ltd. and is now in the process of transferring the unit to the said auction purchaser. It is further submitted that in view of the fact that winding up petition has been admitted and Provisional Liquidator has been appointed, SICOM Ltd. has no right to proceed with the sale of the unit. It is also the submission of the respondent company that the said unit is grossly under-valued. The respondent has got the unit valued from M/s. Harjinder Kohli and Associates, Chartered Accountants, which shows the valuation of the property in question as Rs. 78,13,51,000/ -. Therefore, on the basis of the aforesaid contentions it is argued that SICOM Ltd. be restrained from taking further action and should not be allowed to sell the property to M/s. Ceylon Biscuits Ltd. for a pittance. Primarily, two issues, which need to be determined by this Court in this application, are as follows:- 1. Whether SICOM Ltd. can be allowed to go ahead with the sale of the property after order dated 6th April, 2004 passed in the company petition. 2. If so, whether the bid submitted by M/s. Ceylon Biscuits Ltd. is to be accepted. While deciding the second issue, one will have to take into consideration related issue of proper valuation of the property. In so far as the fist issue is concerned, various orders passed in the execution petition and quoted above would demonstrate that SICOM Ltd. was not given a free hand in the sale of the property and in fact, in the order dated 16th March, 2004 it was specifically pointed out that the sale would be under the supervision of the Court. In fact, thereafter, as is clear from the orders passed in the execution proceedings, the events that took place would clearly show that it is the Court which was supervising the sale. Bids were invited which were opened in the Court. M/s. Ceylon Biscuits Ltd. and any other bidder was also permitted to make a bid. Even after fresh valuation another chance was given to all the five bidders to submit their bids which were received in the Court. In the order dated 24th March, 2004 as well as subsequent order the Court has observed, in no uncertain terms, that appropriate effective steps were taken by the Court for selling the assets of the respondent company. Therefore, it may not be correct on the part of the respondent company to state that SICOM Ltd. has initiated the process of sale of its own. The bids were received in the Court and transparent method was adopted. Even the respondent company was given a chance to bring a buyer/bidder. However, while the matter was pending in the Court and execution petition had to be transferred in view of the order dated 6th April, 2004 passed by the Company Court, SICOM Ltd. went ahead in the matter of its own and has accepted the bid of M/s. Ceylon Biscuits Ltd. It is contended by learned counsel for the respondent company that in view of the judgment of the Supreme Court in the case of International Coach Builders Ltd. v. Karnataka State Financial Corporation (Supra), SICOM Ltd. cannot proceed with the matter after the order dated 6th April, 2004 is passed appointing a Provisional Liquidator. On the other hand learned counsel for SICOM Ltd. relies on the same very judgment to contend that SICOM Ltd. being a secured creditor and a statutory body under the State Finance Corporation Act has right to proceed under Section 29 of the said Act inasmuch as no order of winding up has been passed so far. Vide order dated 6th April, 2004 passed in the company petition, the petition is admitted to hearing and Provisional Liquidator has been appointed and there is no order of winding up. As per the judgment of the Apex Court in the case of International Coach Builders Ltd. v. Karnataka State Financial Corporation, [2003] Vol. Vide order dated 6th April, 2004 passed in the company petition, the petition is admitted to hearing and Provisional Liquidator has been appointed and there is no order of winding up. As per the judgment of the Apex Court in the case of International Coach Builders Ltd. v. Karnataka State Financial Corporation, [2003] Vol. 114 614, State Financial Corporation would continue to exercise its rights under the Act and would stand outside the winding up proceedings till the winding up order is passed. There is no winding up order passed in this petition. Be as it may, even if we have to proceed on the basis that there is a winding up order, the only effect is that it is the Provisional Liquidator who may dispose of the assets and that Provisional Liquidator is also to act under the supervision of the Company Court. The execution petition is sent to the Company Court and, therefore, the matter is being examined by the Company Court. While examining the matter the exercise is, in fact, being done by the Court after taking into consideration all the relevant aspects. Significantly in the fact of this case it may not make much difference inasmuch as even when the matter relating to disposal of assets was considered in the execution petition, orders were passed to the effect that it has to be under the supervision of the Court. ( 6 ) IT is already pointed out above that till the submission of bids the exercise was done under the supervision of the Court; albeit by a Judge of this Court sitting as executing court in execution petition. Proceedings from that stage are now with the Company Court when the matter for confirmation of the sale has come up for consideration. Maybe, SICOM Ltd. has gone ahead in accepting the bid of M/s. Ceylon Biscuits Ltd. which exercise was to be done by the Court. However, treating this acceptance to be subject to the orders of the Court, this Court can proceed in the matter and decide as to whether such a bid is to be accepted or not. With these observations, I now consider the second question posed above, viz. , whether bid of M/s. Ceylon Biscuits Ltd. warrants to be accepted. However, treating this acceptance to be subject to the orders of the Court, this Court can proceed in the matter and decide as to whether such a bid is to be accepted or not. With these observations, I now consider the second question posed above, viz. , whether bid of M/s. Ceylon Biscuits Ltd. warrants to be accepted. ( 7 ) I have already pointed out that bids were invited by the Court and the highest bid is of M/s. Ceylon Biscuits Ltd. , which is of Rs. 12. 5 crores. Although on 19th April, 2004 the Court was to permit the bidders from making inter se bidding which could not be done because the matter was transferred by the executing court to company court, Mr. Rajiv Nayar, learned Senior Advocate for SICOM Ltd. , pointed out that letters were written to all the five bidders asking if they could raise the bid amount. M/s. Longulf Trading (India) Pvt. Ltd. has, in fact, withdrawn the bid and other three bidders did not respond. Therefore, the highest bid of M/s. Ceylon Biscuits Ltd. is available which remains at Rs. 12. 5 crores. The question of inter se bidding in these circumstance would not arise and the decision is to be taken on the basis of available bids. In order to determine whether the bid submitted by M/s. Ceylon Biscuits Ltd. is worthy of acceptance, incidental issue of valuation needs to be addressed first. ( 8 ) CERTAIN comments about the valuation are, therefore, needed at this stage. As has been pointed out above in the report submitted earlier by the valuer the property was valued at Rs. 8,42,43,000/ -. The respondent company had objected to this valuation and the Court directed re-evaluation of the property through an approved valuer. The respondent company was allowed to participate in the proceedings by the approved valuer with direction to produce the relevant records. One Mr. J. S. Lamba, Senior Consultant-I of North India Technical Consultancy Organisation Ltd. , which is a joint venture of IDBI, IFCI, ICICI and State Financial Institutions and banks, was appointed as valuer, who submitted fresh valuation report as per which entire assets were valued at Rs. 10 crores. This fact is specifically noted in the order dated 5th April, 2004 when counsel for the respondent company was also present. 10 crores. This fact is specifically noted in the order dated 5th April, 2004 when counsel for the respondent company was also present. In view of this valuation, even fresh bids were invited and public notice was issued by SICOM Ltd. ( 9 ) THE valuation submitted by the respondent company through Sh. Harjinder Kohli and Associates cannot be accepted in view of the fact that as per the Chartered Accountants themselves, the valuation is done on the basis of documents/records and information produced before them and it is clear therefrom that they have taken book value of the said assets and not the market value. For making the valuation of the property one cannot go by the value as given in the books of accounts which may not be correct reflection of the market value. The very Chartered Accountants in their letter dated 2nd April, 2004 have stated that they are not the firm of approved chartered valuers. It is, thus, obvious that the said Chartered Accountants are not the technical persons who can claim any expertise in evaluating the plant and machinery, or for that matter land and building. The acceptance of the bid of M/sceylon Biscuits Ltd. , in these circumstances, keeping in view the valuation of the property at Rs. 10 crores and finding no bidder giving higher bid, may not be improper. ( 10 ) AT this stage it was submitted by learned counsel for the respondent company that the respondent company can give the valuation reports from approved valuer showing the valuation of the property to be much more than Rs. 10 crores estimated by the approved valuer. This opportunity cannot be given to the respondent company at this stage as such an opportunity had already been given and giving of further opportunity in this behalf would only delay the proceedings. There is an apprehension expressed by learned counsel for the SICOM Ltd. which is not without substance that even Ceylon Biscuits Ltd. may back out and withdraw its offer. The only opportunity, in these circumstances, which can be given to the respondent company (which was prayed for by learned counsel for the respondent), is to come forward with a buyer giving better offer. The only opportunity, in these circumstances, which can be given to the respondent company (which was prayed for by learned counsel for the respondent), is to come forward with a buyer giving better offer. It may not be out of place to mention here that such an opportunity was given ever earlier vide order dated 16th March, 2004 but till date the respondent company has failed to bring any such buyer. Still in the interest of justice one more opportunity for this purpose is given to the respondent company to bring better offer, is any, by 27th July, 2004. It is made clear that the offer of a buyer should be a firm offer matching all the conditions given in the order dated 9th February, 2004 and it should be accompanied by a pay order representing at least 10% of the bid amount. If such an offer is produced, the same would be considered. Otherwise, offer of M/s. Ceylon Biscuits Ltd. would be accepted and appropriate orders regarding the sale proceeds would be passed in the company petition. With these observations, the application is disposed of cp No. 204/2004 list on 27th July, 2004. Copy of this order be given Dasti to counsel for the parties under the signature of the Court Master.