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2008 DIGILAW 722 (PAT)

Vijay Kumar Karwa v. Official Liquidator, Rohtas

2008-05-21

BARIN GHOSH, CHANDRA MOHAN PRASAD

body2008
Judgment 1. Day before yesterday we heard the learned counsel appearing on behalf of the appellant as well as learned counsel appearing on behalf of the respondents. In reply, to our query, the learned counsel for the appellant sought two days time to inform us whether Waste Coast Paper Mills Limited is a part of Bangur Groups of Industries or not. Today the learned counsel appearing on behalf of the appellant could not furnish us the said information and instead wanted adjournment for the purpose of supplying the said information. We have refused to grant such adjournment inasmuch as Railway Administration having had paid rupees one hundred forty crores, an adjournment, having regard to the stay order, would unjustly enhance the financial burden of the Railway Administration. 2. An application was filed by the appellant before the Company Judge. In the application he described himself as a renowned businessman and Agent of Bangur Group of Industries, Calcutta. It was stated that Bangur Group of Industries is a renowned group dealing with industries of paper, cement, graphites, chemicals, cables etc. It was stated that the annual turnover of Bangur Group of Industries is about five thousand crores. In the application it was held out that the said group of Industries has taken a decision for setting up a paper plant of five hundred Metric Tonne capacity of writing and printing paper either at Calcutta or Bihar and, accordingly, they are interested in revival of Rohtas Group of Industries. However, in no uncertain terms it was represented in the said application that the offer is for payment of rupees sixty five crores and fifty one lacs as and towards the consideration for the price of both movable and immovable properties of the industrial undertakings of Rohtas Group of Industries free from all encumbrances. This offer was made at a time when a part of the properties of Rohtas Group of Industries, i.e. of the Company in liquidation, had been sold and the Company Judge was taking steps to sell the remaining properties. In the said application alongwith some other application were considered by the Company Judge on 25.08.2006. However, the learned Judge, by his order dated 25.08.2006 while disposing of the said application, neither recorded the contentions of the appellant in the said application, nor did deal with such contentions either positively or negatively. In the said application alongwith some other application were considered by the Company Judge on 25.08.2006. However, the learned Judge, by his order dated 25.08.2006 while disposing of the said application, neither recorded the contentions of the appellant in the said application, nor did deal with such contentions either positively or negatively. Being aggrieved thereby, the appellant preferred the present appeal contending therein that the Company Judge without any just reason ignored the said application of the appellant. 3. As would be evidenced from the order of the Company Judge dated 25.08.2006, a direction was given thereby to effect publication of sale notice in leading newspapers of India. Accordingly, the sale notice was published. Subsequent thereto on 19.10.2006. The Waste Coast Paper Mills Limited authorized the appellant to collect prescribed form on payment of necessary fees to enable it to give its offer to purchase the assets advertised for sale. In terms of such authorization on 25.10.2006 appropriate fees were deposited with the Official Liquidator for obtaining appropriate proforma to submit offer in terms of the advertisement. It appears from the order of the Company Judge dated 10.10.2006, that certain offers were received in response to the advertisement. However, no offer was received either from the appellant or from The Waste Coast Paper Mills Limited. On 17.10.2006 the Waste Coast Paper Mills Limited requested the Official Liquidator to allow its representatives, including the appellant, to inspect the items offered for sale. Upon deposit of inspection fee, on 21.11.2006 the Official Liquidator allowed inspection be taken by the representatives of the Waste Coast Paper Mills Limited, including the appellant. On 27.11.2006, inspection was taken. The appellant was one of those Inspectors. On 30.11.2006 the Company Court recorded receipt of certain offers, but permitted the offerers to better their offers until 7.12.2006. At that stage Union of India through the Secretary, Railway Board, expressed an intention to purchase the properties, being the subject matter of the sale notice for public purpose. Such intention was expressed through a petition wherein it was indicated why the Union of India is interested to purchase the land proposed to be sold and how that land would be utilized for the improvement of infrastructure for goods traffic. Such intention was expressed through a petition wherein it was indicated why the Union of India is interested to purchase the land proposed to be sold and how that land would be utilized for the improvement of infrastructure for goods traffic. On 7.12.2006 the Company Judge was requested by the Advocate appearing on behalf of the Union of India, through the Secretary, Railway Board, not to finalize the subject sale and instead to give an opportunity to the Railway Administration for submitting a bid. The Court, in the circumstances, adjourned the matter till 21.12.2006. The Union of India, i.e. the Railway Administration, thereupon gave an offer of rupees one hundred forty crores, which offer could not be matched by any other bidder. The Company Judge thereupon accepted the offer, permitted to deposit the money and confirmed the sale. In the meantime, neither the appellant, nor the Waste Coast Paper Mills Limited gave any offer. 4. All these time the present appeal was pending. In the present appeal no attempt was made to apply for stay of the proposed sale pursuant to the sale notice as was advertised. On 2.04.2007, the appeal was dismissed again without recording any reasons. The appellant thereupon approached the Hon ble Supreme Court and impressed upon it that the appellant wanted to revive the company in liquidation and for that matter made and application. It was contended at least the Company Judge should have applied its mind to the proposal given by the appellant for revival of the Company in liquidation. The Hon ble Supreme Court by its order dated 20.04.2008, while setting aside the order of this Court dated 2nd April, 2007, remitted the matter back for reconsideration, principally on the ground that the non-speaking order dismissing the application of the appellant by the Company Judge was a Judicial order and is distinct from an administrative order and, accordingly, the same was appealable and the appellate court was obliged to entertain and disposed of the same on merits. 5. As a result the matter has come back to us for reconsideration and, as aforesaid, we have heard the parties in the manner indicate in the first paragraph of this order. 5. As a result the matter has come back to us for reconsideration and, as aforesaid, we have heard the parties in the manner indicate in the first paragraph of this order. A look at the original application filed by the appellant would suggest that the appellant was eager to buy the assets of the Company in liquidation and thereupon to utilize such assets for establishing a new industry and for that matter proposed to make a large investment. The application was not an application for revival of the Company in liquidation. In such situation, there was no just reason for giving a preference to the appellant for purchasing the assets of the Company in liquidation. It was felt that it would be appropriate to permit the appellant to purchase those assets at the highest price to be arrived at in response to the sale notice as was directed to be published by the learned single Judge while disposing of the said application of the appellant. The said reason is inherent in the order of the learned Judge. 6. In the application, the appellant did not indicate the composition of Bangur Group of Companies, although he held out that he is an Agent thereof. The appellant though was represented in writing to be a representative of the Waste Coast Paper Mills Limited but it is not known whether it is or is not one of the Companies belonging to the Bangur Group of Companies. We asked for information, time was taken until today, but an adjournment was sought. There is no just reason why the Waste Coast Paper Mills Limited took all steps to give an effective bid for purchase of the assets of the Company in liquidation and for that matter engaged the appellant as its Agent but did not, ultimately, submit any offer whatsoever. 7. The offer of the appellant or that of Bangur Group of. Companies was limited to rupees sixty five crores fifty one lacs until day before yesterday, despite knowledge of the fact that the self-same asset is proposed to be purchased at rupees one hundred forty crores. The appellant and his principals did not think it proper to enhance the offer. Day before yesterday for the first time by an application made in this appeal, the appellant proposed to give an offer of rupees one hundred fifty crores. The appellant and his principals did not think it proper to enhance the offer. Day before yesterday for the first time by an application made in this appeal, the appellant proposed to give an offer of rupees one hundred fifty crores. We requested the learned counsel for the appellant to bring in Court today either rupees one hundred fifty crores or a part thereof in order to show bona fide of the offer made. But, as aforesaid the learned counsel appearing on behalf of the appellant has been instructed to seek an adjournment. The said state of affair clearly demonstrate that there was and is no earnestness on the part of the appellant or his principals to give any effective offer to acquire the assets of the Company in liquidation. 8. In those circumstances, the appeal fails and the same is dismissed. In consequence thereof, status quo order is vacated.