JUDGMENT : 1. The applicant, by this application, which is registered as Company Application No. 211 of 2013 seeks that the order dated 21.6.2013 whereby sale of certain properties of the company liquidation came to be confirmed in favour of the bidder whose offer was found to be highest (Rs. 20.10 Lacs) during the auction / inter-se bidding before the Court (hereinafter referred to as “successful bidder”) may be recalled and cancelled and instead his (i.e. the applicant's) offer, which is for higher amount (i.e. about Rs. 9.90 lacs more than the highest bid which came to be accepted vide order dated 21.6.2013 during auction / inter-se bidding) may be accepted. 1.1 Considering the request made in the application, order dated 30.7.2013 was passed and office was directed to issue process to the opponent No.2 i.e. the said successful bidder and to the secured creditors as well as official liquidator (“OL” for short). 1.2 Having regard to the request in the application and the issue raised by the applicant, Rule. Mr. Rao, learned advocate for the opponent No.2, Mr. Dave, learned advocate for opponent No.4 and Ms. Yajnik, learned advocate official liquidator have waived service of Rule. In view of the request by learned advocates, application is heard finally. Service of process is waived by learned advocates for opponent No.2, opponent No.4 and opponent No.1. 2. Before proceeding further, it is relevant to mention at this stage that the date on which this application was taken up for hearing i.e. on 30.7.2013 the sale deed was not executed and the OL had not handed over the physical and actual possession of the property in question to the successful bidder. Therefore, with a view to maintaining status quo, so that the application may not be automatically frustrated, the Court had passed the order dated 30.7.2013 directing OL to maintain status-quo. 2.1 On the returnable date i.e. on 8.8.2013 the opponent No.2 (i.e. successful bidder during the auction / inter-se bidding) filed an affidavit opposing the petition claiming that its bid was accepted as highest bid during the process of auction / inter-se bidding and that now the said decision may not be reversed or recalled since entire amount payable as per the sale confirmation order is already paid. 2.2 Then, on few occasions the proceedings were adjourned and on 21.8.2013 this Court, recorded, inter alia, the submission and stipulation by Mr. 2.2 Then, on few occasions the proceedings were adjourned and on 21.8.2013 this Court, recorded, inter alia, the submission and stipulation by Mr. Rao, learned advocate for the opponent No.2 (i.e. the successful bidder) that without prejudice to his contentions and objections in present application, the original successful bidder is ready and willing to match the applicant's price. The aforesaid order dated 21.8.2013 was followed by order dated 23.8.2013. The learned advocate for the applicant also submitted that so as to establish its bonafides the applicant is ready to deposit the amount offered by way of application. In pursuance of the said stipulation and assurance the applicant has deposited (with the OL) the amount offered by way of present application i.e. Rs.30 lacs. Re:-Factual Background: 3. Before considering rival submissions it is relevant to take into consideration some of the facts. 3.1 By order dated 11.1.2011 passed in Company Petition No.334 of 1997, the Court ordered that the company viz. Bhagvati Glass Containers Limited be wound up. 3.2 Subsequently, by order dated 17.8.2011 in OLR No.20/2011 a sale committee was constituted comprising (a) OL (b) 2 assistant OLs, (c) representative of the creditors viz. Bank of Baroda and GSFC, for disposing the assets. 3.3 A meeting of the sale committee was convened on 5.11.2012 when the committee decided to appoint one Mr. Parikh, a Government approved valuer for valuation of the property who submitted valuation report around 4.12.2012 which was examined by the said sale committee and after due consideration the committee accepted the said report. 3.4 After considering the valuation report, the sale committee decided to put up the assets for sale in three different lots namely (a) Lot No.1 being freehold non-agricultural land, (b) Lot No.2 being plant, machineries, furniture, fixtures, raw materials, finished goods, etc. and (c) lot No.3 composite offer for lot No. 1 and 2. In light of the said valuation report the sale committee accepted valuer's opinion about market value and recorded its views to fix the reserved price at Rs.422.00 Lacs for lot No.1 and EMD was fixed at Rs.42.20 lacs while upset price for plant and machinery i.e. lot No.2 was Rs.16.50 lacs and EMD was Rs.1.65 lacs and for lot No.3 the upset price was fixed at Rs.438.50 lacs. It was on the basis of the views and opinion of the sole committee the OL filed OLR No. 21 of 2013 and submitted that the market value of the property / lot No. II is Rs.16.50 lacs. 3.5 In the said OLR No.21 of 2013 the OL prayed, inter alia, that:- “9 (a) That, this Hon'ble Court may be pleased to take on records the action taken by the official liquidator for sale of assets of the company; (b) That this Hon'ble Court may be further pleased to direct the official liquidator to issue advertisement inventing offers from the intending purchasers for purchase of the assets of the company as per detail mentioned in para 8 above or such lots, upset price and EMD as may be decided by this Hon'ble Court; (c) That, this Hon'ble Court may be pleased to direct the official liquidator to re-schedule the sale programme or may direct such schedule as may be decided by this Hon'ble Court; (d) That, this Hon'ble Court may be further pleased to direct the official liquidator to file further report placing the offers received from the intending purchasers and also to adjourn the present report to such other date as may be decided by this Hon'ble Court;” 3.6 The Court considered the said OLR No.21 of 2013 and by the order dated 30.4.2013 the Court directed inter alia that:- “The Official Liquidator is directed to give advertisement in Gujarati daily 'Divya Bhaskar' (Ahmedabad edition) and English daily 'The Times of India' (Ahmedabad edition) inviting offers from the intending purchasers for purchase of the assets of the company detailed herein below and upset price and Earnest Money Deposit fixed as under : Lot Description of property Upset Price Earnest Money Deposit No. (Rs.) (Rs.) I Freehold-non-agricultural........... 422.00 Lacs 42.20 Lacs II Plant, Machineries and all other movables including furniture, fixtures, Raw material and finished goods except records. 16.50 Lacs 1.65 Lacs III Composite Offer of Lot No. I & II above. 438.50 Lacs 43.85 Lacs 3.7 After the said order, the Official Liquidator, as per the usual practice published advertisement inviting bids in one daily newspaper in English (i.e. Times of India) and one daily newspaper in Gujarati language (i.e. Divya Bhaskar). 16.50 Lacs 1.65 Lacs III Composite Offer of Lot No. I & II above. 438.50 Lacs 43.85 Lacs 3.7 After the said order, the Official Liquidator, as per the usual practice published advertisement inviting bids in one daily newspaper in English (i.e. Times of India) and one daily newspaper in Gujarati language (i.e. Divya Bhaskar). 3.8 It appears that according to the scheduled programme declared in the advertisement the inspection of assets was allowed on 23.5.2013 and on 24.5.2013 when about 16 purchasers took inspection of the assets of the company. However, as on the cut off date, i.e. 7.6.2013, upto 4.00 p.m., the Official Liquidator received six bids for only one lot i.e. lot No.2. The OL did not receive any offer for Lot No.1 and Lot No.3. Re:-Auction / Inter-se bidding 3.9 The six bidders who submitted their bids / offers in response to the said advertisement dated 15.3.2013 are (1) Omar Steel (2) G.K. Traders (3) Adinath Enterprise (4) Monali Textile (5) V.L. Intext and (6) Chechani Trading Company. After the last date for receiving the offers OL filed report being Official Liquidator's Report No.54 of 2013 wherein the OL prayed inter alia that:- “16 (a) That this Hon'ble Court may be pleased to consider the views of the secured creditors of the company in respect of the highest bid that may be received in the inter-se bidding and may also be pleased to confirm, if found fit and proper, the sale of Lot No.II in favour of the highest bidder on the terms and conditions of sale as per tender document and / or such other and further terms and conditions as may be considered appropriate by this Hon'ble Court; (b) If this Hon'ble Court finds that the highest offer received in the inter-se bidding is not the appropriate offer looking to the fair market price and the valuation of assets of the company as per valuation report of 4.12.2012, this Hon'ble Court may be pleased to direct the official liquidator to re- advertisement the sale on such terms and conditions and with such further orders and directions as in the facts and circumstances of this case, may be considered appropriate and expedient by this Hon'ble Court;” 3.10 After the said report was submitted, the Court passed order dated 13.6.2013 relevant part of which reads thus:- “1. In pursuance of the order dated 30.4.2013 passed by the Court (Coram: R.M. Chhaya,J.) in OLR No. 21 of 2013 the procedure for sale of certain parcels of lands being property of the company in liquidation and plant and machinery being assets of the company in liquidation was undertaken by OL. 2. Now, the OL has filed present report seeking below mentioned relief/direction:- (a) to (e) ........... 3.......... 4. According to OL, 6 bids for the said movable properties i.e. plant and machinery are received by the OL. 4.1 The names of the said 6 bidders are (1) Omar Steel (2) G.K. Traders (3) Adinath Enterprise (4) Monali Textile (5) V.L. Intex (6) Chechani Trading Company. 5. The Court is informed that the bidders were informed to remain present in the Court for inter-se bidding, if so required and accordingly the bidders / their representatives who have submitted their offers for plant and machinery are present in the Court. 6. Hence, the OL is permitted to open 6 sealed covers submitted by 6 bidders who have submitted their offers in sealed cover pursuant to the advertisement inviting bids. 6.1 In view of the said permission, learned advocate for the OL has opened the sealed covers in the Court in presence of 6 bidders / their representatives and has prepared a statement recording the details of the offer amount mentioned by 6 bidders in their respective bids. 6.2 The details of the offer amount mentioned by 6 bidders are as follows. Sr. No. Names Amount offered (Rs.) 1 Omar Steel 16,50,000/- 2 G.K. Traders 16,81,000/- 3 Adinath Enterprise 16,90,000/- 4 Monali Textile 17,10,000/- 5 V.L. Intex 16,55,000/- 6 Chechani Trading Company. 16,50,000/- 6.3 The said statement is permitted to be placed / retained on record of present application. 7. In view of the request made by the OL, the process of bidding is deferred until 20.6.2013. 8. The OL should inform the bidders to remain present on 20.6.2013. In the meanwhile, the OL is permitted to deposit the cheques of EMD received from 6 bidders. S.O. to 20.6.2013.” 3.11 At this stage it is relevant to recall that According to the advertisement reserved price for Lot No. 2 i.e. the goods in question was fixed at Rs.16,50,000/-. 3.12 On the next hearing, i.e. on 20.6.2013, the proceedings were adjourned for the reasons mentioned in the order dated 20.6.2013. S.O. to 20.6.2013.” 3.11 At this stage it is relevant to recall that According to the advertisement reserved price for Lot No. 2 i.e. the goods in question was fixed at Rs.16,50,000/-. 3.12 On the next hearing, i.e. on 20.6.2013, the proceedings were adjourned for the reasons mentioned in the order dated 20.6.2013. On the next date, i.e. on 21.6.2013, the inter-se bid amongst the said six bidders was conducted and during the said inter-se bidding (auction) present opponent No.2 emerged as highest bidder with revised offer at Rs. 20,10,000/-as against the reserved / upset price of Rs.16,50,000/-. On conclusion of the said inter-se bidding / auction, the Court passed the order dated 21.6.2013 confirming sale in favour of M/s. Omar Steel who was one of the said six bidders (i.e. opponent No.2 in present proceedings). The relevant part of said order dated 21.6.2013 reads thus:- 1........... 2. At the outset, it is necessary to mention that the 6 bids / offers in question which are under consideration are restricted to lot No. II (i.e. only for movable such as plant, machineries, furniture, fixtures, raw materials and finished goods except records). 3. As mentioned in the order dated 13.6.2013 in response to the advertisement issued by OL pursuant to order dated 30.4.2013, OL received in all 6 bids/offers from (1) Omar Steel (2) G.K. Traders (3) Adinath Enterprise (4) Monali Textile (5) V.L. Intex and (6) Chechani Trading Company. 4............. 5. Accordingly, the said 6 bidders are given chance for inter-se bidding. 5.1 For the said purpose, when the learned advocate for OL called out the names of the bidders, only 5 bidders / their representatives viz. Omar Steel, G.K. Traders, Adinath Enterprise, Monali Textile and Chechani Trading Company came forward and it is reported that V.L. Intext (who had submitted offer of Rs.16,55,000/-) has not remained present for inter-se bidding. 6. At the instruction of the Court, learned Counsel for OL informed the said 5 bidders that they may raise their bids / offers by minimum Rs.50,000/-if they want to participate and continue in the inter-se bidding. 7. In the process, Chechani Trading Company, gradually increased its offer from Rs.16,50,000/-to Rs.18,60,000/-whereas Adinath Enterprise gradually increased its offer from Rs.16,90,000/-to Rs.18,10,000/-and G.K. Traders gradually increased its offer from Rs.16,81,000/-to Rs.19,60,000/-. Monali Textile did not increase its offer from Rs.17,10,000/-however, Omar Steel gradually increased its initial offer from Rs.16,50,000/-to Rs.20,10,000/-. 8. 7. In the process, Chechani Trading Company, gradually increased its offer from Rs.16,50,000/-to Rs.18,60,000/-whereas Adinath Enterprise gradually increased its offer from Rs.16,90,000/-to Rs.18,10,000/-and G.K. Traders gradually increased its offer from Rs.16,81,000/-to Rs.19,60,000/-. Monali Textile did not increase its offer from Rs.17,10,000/-however, Omar Steel gradually increased its initial offer from Rs.16,50,000/-to Rs.20,10,000/-. 8. Thereafter, none of the bidders came forward to increase their offer or to even match the offer (i.e. Rs.20,10,000/-) of Omar Steel. 9. Thus, considering the fact that the increased offer of Omar Steel is highest, the said bidder is considered as highest bidder and accordingly declared as successful highest bidder for the movable properties mentioned / described in the advertisement issued pursuant to the order dated 30.4.2013 and consequential advertisement (i.e. notice inviting bids / tenders) issued by OL and the tender document (if any). 10. Therefore sale is confirmed in favour of said highest bidder viz. Omar Steel on the terms and conditions in this order and in the tender document and in the advertisement. All conditions mentioned in this order and in the tender document as well as in the advertisement will be applicable and binding to the successful bidder and are to be treated as part of present order as if they all are specifically and expressly incorporated and mentioned in this order. The conditions in this order are in addition to the conditions in the advertisement and tender document. 11. Though not necessary, so as to remove any doubts or confusion or any future dispute or controversy, it is clarified that the term plant used in the advertisement and in this order means only manufacturing facility (i.e. machines / equipments for manufacturing process) and not the building and / or permanent or temporary super structure or any material being part of or used in the building and / or permanent or temporary superstructure. 12. In view of the above following order is passed:- (A) The said highest bidder i.e. Omar Steel shall, as per the condition in the advertisement / tender document pay 25% of purchase consideration to the OL within 30 days from today and balance amount of purchase sale consideration shall be paid within 3 months thereafter. (B)......... (C) ........ (D) The stamp duty, registration charges, AUDA / Society charges and all other incidental charges thereto shall be borne by the purchaser. (E) ......... (B)......... (C) ........ (D) The stamp duty, registration charges, AUDA / Society charges and all other incidental charges thereto shall be borne by the purchaser. (E) ......... (F).........” 3.13 In pursuance of the said order dated 21.6.2013, the said successful bidder was obliged to make payment of sale consideration within and in accordance with the time schedule prescribed in the said order. 3.14 It was after completion of the entire aforesaid procedure and after the sale conformation and order dated 21.6.2013 that the present applicant preferred this application on 29.7.2013. 4. The above-mentioned details demonstrate that for the purpose of ascertaining reasonable value/market value of the property in question, services of government approved and registered valuer was engaged under direction by the Court and the valuer's report and realizable value was examined by the sale committee who approved it and thereafter the reserved price of the property in question was fixed by the Court by taking into consideration the valuer's report and sale committee's decision and thereafter the advertisement inviting bids was issued by mentioning the reserved price which was determined on the basis of the government approved valuer's report. The bids which were received in response to the advertisement were taken out (from sealed cover) in the open court and thereafter the comparative statement/chart of the amounts offered by the bidders was prepared by Official Liquidator in view of Court's direction. Subsequently, inter-se bidding / auction amongst the said bidders was conducted in open Court when one of the bidders did not attend the process. Equal opportunity to all bidders to revise/increase their offers was given and ultimately the offer made during inter se bidding by opponent No.2 emerged as the highest offer and therefore, the said offer was accepted and the sale came to be confirmed vide order dated 21.6.2013 in favour of opponent No.2. Re:-No allegation of fraud / irregularity 5. It emerges from the said details that until the sale came to be confirmed in favour of the highest bidder vide order dated 21.6.2013 nobody, including the applicant or the opponent No.2 or any other bidder, alleged that the said auction sale process is vitiated by any illegality or mischief or fraud of any nature whatsoever. 5.1 Even after conclusion of the process and even at the time of sale confirmation order such allegation is not made by anyone. 5.1 Even after conclusion of the process and even at the time of sale confirmation order such allegation is not made by anyone. In this application also there is no allegation about any irregularity and / or any mischief and / or any illegality or fraud. Even the applicant has not made such allegation and that is not even the ground in the application for request to recall the sale confirmation order in favour of the highest bidder. 6. Now, at this stage it is necessary to mention that according to present applicant, it is not one of the six bidders who had submitted the bids before the last date for submission of the bids as per the advertisement inviting bids and it had not participated in the auction / inter-se bidding on 21.6.2013 however the opponent has disputed said submission and alleged that actually the applicant is proxy of one of the bidders (viz. M/s.V.L. Intex) who, though present, did not increase its bid during the auction. Re:-Belated offer / application 7. Even if, only for the sake of consideration, the applicant's assertion is assumed to be true then also the fact remains that: (a) the applicant has woken-up at highly belated stage i.e. the applicant did not submit its offer in response to the invitation to bid within prescribed time limit; (b) and the applicant did not appear even at the stage of inter-se bidding and did not seek permission to participate in the auction as per usual practice (i.e. by paying late-entry-fee); (c) and after the stage of confirmation of sale in favour of the bidder of highest offer; (d) and did not come forward even until the stage when the successful bidder paid the entire sale consideration. 7.1 Moreover the fact also remains that; (e) the applicant has not offered any satisfactory explanation for not participating at the relevant time; (f) it is not even the applicant's case that for want of sufficient publicity it could not submit its offer within specified time or even at relevant time. 7.2 In such belated application to cancel confirmed sale the only reason and justification given by the applicant is that it offers higher price than the highest offer received during inter-se bidding. After considering the said application, the Court passed below mentioned order on 30.7.2013. “Heard Mr. Desai, learned advocate for the applicant. Issue Notice returnable on 8.8.2013. 7.2 In such belated application to cancel confirmed sale the only reason and justification given by the applicant is that it offers higher price than the highest offer received during inter-se bidding. After considering the said application, the Court passed below mentioned order on 30.7.2013. “Heard Mr. Desai, learned advocate for the applicant. Issue Notice returnable on 8.8.2013. Direct service is permitted qua opponent Nos.2, 3 and 4. Ms. Lodha and Ms. Yajnik, learned counsel, waives service of notice for opponent Nos.5 and 1 respectively, upon service of advance copy of application. Having regard to the facts and circumstances of the case and submissions made by learned advocate for the applicant and the details mentioned in affidavit in support of the application, it appears appropriate, with a view to maintaining equities to grant, by way of ad-interim relief, the request made in paragraph No.(B) of present application. Therefore, the Official Liquidator is directed to maintain status-quo as regard the possession of the property in question.” 7.3 In response to the Notice, the Official Liquidator and the opponent No.2 i.e. the successful bidder have filed affidavits. Official Liquidator has stated that opponent No.2 has paid entire amount of sale consideration within time limit prescribed by the order and last installment was paid by opponent No.2 on 24.7.2013. In his reply dated 8.8.2013, the said successful bidder has, while relying on the observation by Apex Court in para 34 to 36 in case of Valji Khimji averred, inter alia that:- “2. At the outset, I say and submit that the present application is not maintainable as the order passed by this Hon'ble Court has been fully executed and the answering opponent has deposited the entire amount with the official liquidator on 24.7.2013 and therefore once the order has been fully complied with, the present application for recalling the order passed by this Hon'ble Court at the instance of the present applicant is not maintainable as right has been created in favour of the opponent by virtue of the order passed by this Hon'ble Court and therefore the present application is not maintainable. 3. I say and submit that on 21.6.2013, this Hon'ble Court has in OLR NO. 54 of 2013 confirmed the sale in favour of the answering opponent after finalizing interest bidding between the parties present at the time of auction in the open Court. 3. I say and submit that on 21.6.2013, this Hon'ble Court has in OLR NO. 54 of 2013 confirmed the sale in favour of the answering opponent after finalizing interest bidding between the parties present at the time of auction in the open Court. I say and submit that after the auction has been concluded by the Hon'ble Court for Rs.20,10,000/-and order was passed and thereafter the deponent has deposited the amount and the contract is concluded. Therefore now the present application is not maintainable for recalling of the order merely on the ground that the present applicant has offered the higher amount.” “4. .....................the opponent No.2 has discharged his obligation and now only material has to be lifted by the opponent No.2. But before that the applicant has filed this application before this Hon'ble Court. It is submitted that the applicant has submitted the tender pursuant to the public advertisement given by the official liquidator and not remained present before the Hon'ble High Court.” “6...............contract is concluded and therefore now it is not open for the present applicant to approach this Hon'ble Court. Further there is no allegation of fraud or collusion made by the present applicant in the entire claim.” 7.4 In his report/reply, the Official Liquidator has averred, inter alia, that:-” That the official liquidator most respectfully submits that in compliance of the aforesaid orders of this Hon'ble Court, the successful bidder i.e. respondent No.2 has deposited entire sale consideration of Rs.20.10 lacs as under” 7.5 The successful bidder subsequently, filed additional affidavit raising allegations regarding applicant's real identity, intention etc. and also alleged that the applicant is a proxy of M/s. VL Intex who was one of the bidders but did not raise its bid during auction. In its rejoinder affidavit applicant has denied the allegations. 8. In this background, Mr. Desai, learned Counsel for the petitioner, during his submissions, reiterated the details mentioned in the application and submitted that if the Court permits inter-se bidding by inviting bids afresh or if inter-se bidding between the applicant and the opponent No.2 is permitted then the property in question is likely to yield more price and that the applicant is ready to further revise its offer during fresh bidding, if allowed. It is however, pertinent that the applicant did not mention its final offer. It is however, pertinent that the applicant did not mention its final offer. On such premise learned Counsel for the applicant submitted that order dated 21.6.2013 (whereby bid by opponent No.2 came to be accepted) may be cancelled / recalled. 8.1 The application and the said request of the applicant and the submissions on its behalf have been vehemently opposed by Mr. Rao, learned advocate for opponent No.2. The learned Counsel for opponent No.2 submitted that any fraud or mischief is not committed in the entire process of sale on conclusion of which the order dated 21.6.2013 in favour of opponent No.2 came to be passed and that therefore there is no justification to cancel the said process and the order dated 21.6.2013. The learned advocate for opponent No.2 also submitted that it has paid the entire amount towards sale consideration, as per order dated 21.6.2013 and this is not a case where successful bidder has defaulted in making payment of sale consideration. Mr. Rao, learned Counsel for opponent No.2 also submitted that actually the applicant herein is a disgruntled and dissatisfied person who wants to unnecessarily cause difficulties and hurdles for opponent No.2. It is also claimed that the opponent No.2 is acting at the behest of one of the bidders who had submitted its bid during earlier process and who at the time of inter-se bidding did not increase its offer and the process of inter-se bidding was closed / concluded by order dated 21.6.2013 and now by way of this application the said bidder, through the applicant, is trying to play second innings and that therefore such attempt should not be permitted and such malafide intention may not be entertained by the Court. Mr. Rao, learned Counsel for opponent No.2 also submitted that the sale in its favour (i.e. in favour of opponent No.2) may not be set aside and confirmation of sale in its favour may be maintained, though with higher offer (i.e. at the same rate which the applicant has offered). 8.2 Ms. Yajnik, learned advocate for OL has submitted that in the facts of the case the Court may pass any appropriate order. So far as the factual aspects pursuant to the order dated 21.6.2013 is concerned, Ms. Yajnik, learned advocate for OL relied on the details mentioned in OL's reply/ report dated 7.8.2013. Mr. 8.2 Ms. Yajnik, learned advocate for OL has submitted that in the facts of the case the Court may pass any appropriate order. So far as the factual aspects pursuant to the order dated 21.6.2013 is concerned, Ms. Yajnik, learned advocate for OL relied on the details mentioned in OL's reply/ report dated 7.8.2013. Mr. Dave, learned advocate for one of the secured creditors submitted that a secured creditor would be interested in securing higher price for the property in question so that more amount towards its dues can be received and disbursed by OL and therefore if there is likelihood to secure higher price .for the property in question then the said opportunity may be allowed. No one has attended the hearing and no one has made submission for and on behalf of respondent No.5 and respondent No.3 9. I have heard learned advocate for the applicant and opponent No.2 as well as opponent No.4 at length. I have also considered the details mentioned in the application and the affidavit filed by opponent No.2 as well as the report filed by OL and other material available on record. 10. Before proceeding further it is relevant and necessary to mention that in view of rival contentions and more particularly in light of the applicant's offer for higher price than the price offered by successful bidder, the Court considered it appropriate, particularly due to absence of any allegation about fraud or irregularity or illegality, to examine as to whether the reserved price which was determined on the basis of valuation report was adequate and reasonable or not and that therefore the Court passed order dated 25.9.2013 directing the office to place, for Court's perusal, record of OLR No.20 of 2011, OLR No.21 of 2013 and OLR No. 54 of 2013 and also directed the OL to place other relevant material including valuation report. The said orders read thus:- 1. The said orders read thus:- 1. From the submissions by learned counsel for the applicant, opponent No.2 and Official Liquidator, at this stage, it appears that for the purpose of considering the issue on hand, i.e. whether merely in light of present applicant's belated offer and in absence of any allegation of fraud or irregularity in auction process, the confirmed sale deserves to be / can be cancelled or not, it would be necessary and appropriate for the Court to examine and find out as to whether the offer / price accepted by the Court is inadequate (because the price accepted by the Court is higher than the fixed/reserved upset price) and for that purpose, it would also be useful to know, in light of relevant details, as to whether the upset price which was settled on the basis of valuation report was proper and adequate. A look at the valuation report would be of help in considering this aspect and would lead to the answer to the question related to the price suggested by the valuer. 2. ......... 3. Though the applicant has offered Rs.3 lakh and also submitted that he is willing to offer more, the applicant has, however, kept the cards close to his chest and not revealed his highest / final offer if any. 4. The applicant's obvious attempt is to give an impression that higher price can be fetched. However, it is also a matter of record that even at auction limited number of bidders participated, even amongst those who were present some of them did not proceed to quote more and after confirmation of sale until now any other (i.e. other than the applicant) higher offer is not received by Official Liquidator or by the Court. In this background, Mr.Rao, learned advocate has relied on the decision in case of Valji Khimji and submitted that merely because higher offer is received subsequently, confirmed sale should be cancelled. 5. Under the circumstances, at this stage, the Court is of the view that in the interest of justice and in view of facts of the case, if below mentioned order and direction is passed, then it would also serve the interest of company, the creditors as well as the workers. 5. Under the circumstances, at this stage, the Court is of the view that in the interest of justice and in view of facts of the case, if below mentioned order and direction is passed, then it would also serve the interest of company, the creditors as well as the workers. Hence at this stage, below mentioned order is passed: (a) Any final conclusion and decision as regards the applicant's request to cancel the sale and to recall the order dated 21.6.2013 will be made after examining the valuation report and other material on record of OLR No.20/2011, OLR No.21/2013 and OLR No.54/2013; (b) Official Liquidator is directed to place on record copy of the valuation report on the basis of which the order confirming the reserved/upset price was passed; (c) The office is instructed to place, for Court's perusal, the record of OLR No.20/2011, OLR No.21/2013 and OLR No.54/2013; (d) Official Liquidator shall also clarify as to whether any previous attempt for sale of the property in question was made or not. 6. ......... 7........... 8........... 9........... 10. After considering the aforesaid aspects, the order with regard to the request made by the applicant can be passed. S.O. to 3.10.2013.” 10.1 In response to the said orders the office placed the record of OLR No.54 of 2013 and OLR NO. 21 of 2013 for Court's perusal and the OL filed report dated 4.10.2013 along with which the OL also placed on record minutes of meeting of the said committee and a copy of valuation report. 11. So as to appreciate rival contentions, it would be appropriate to take into account some relevant precedents and observations in certain decisions. (a) In case of M/s. Navalkha & Sons. v. Sri Ramanya Das & Ors. [ 1969 (3) SCC 537 ], Hon'ble Apex Court considered the issue related to Court accepting highest bid and confirming the sale. The factual background of the said case is succinctly summarized by the Court in para 12 of subsequent decision in the case of Divya Manufacturing. v. Sri Ramanya Das & Ors. [ 1969 (3) SCC 537 ], Hon'ble Apex Court considered the issue related to Court accepting highest bid and confirming the sale. The factual background of the said case is succinctly summarized by the Court in para 12 of subsequent decision in the case of Divya Manufacturing. Thus it would be useful to borrow the said summation of fact which read thus:- 12..........In the case of Navalkha and Sons (supra), after appellants offer was accepted, a fresh offer from one Gopaldas Darak for higher amount was received by stating that he could not offer in time because he came to know of the sale only 2 days prior to the date of the application and there was possibility of higher bids. Instead of directing a fresh auction or calling for fresh offers, the learned Judge thought it proper to arrange an open bid in the Court itself on that very day as between M/s Navalkha and higher offeror Gopaldas Darak. M/s Navalkha thereafter offered higher bid at Rs.8,82,000 and its bid was accepted and the learned Judge concluded the sale in its favour with a direction to pay the balance amount. Thereafter an application was filed offering Rs.10 lakhs. A contention was raised that due publicity of the sale of the property was not made, but that application was rejected by the Court. Hence, an appeal was filed by the applicant who made an offer of Rs.10 lakhs and another by one contributory against the order of confirmation. Both appeals were allowed by the Division Bench and the order passed by the learned Judge was set aside with a direction to take fresh steps for sale of the property either by calling sealed tenders or by auction in accordance with law. That order was challenged before this Court by M/s Navalkha. It was contended that there was no justification for the Division Bench to interfere with the order of the learned Single Judge.” In the said factual background, Hon'ble Apex Court, after referring to Rule 273 of Company Court Rules 1959, observed that: “6. The principles which should govern confirmation of sales are well- established. It was contended that there was no justification for the Division Bench to interfere with the order of the learned Single Judge.” In the said factual background, Hon'ble Apex Court, after referring to Rule 273 of Company Court Rules 1959, observed that: “6. The principles which should govern confirmation of sales are well- established. Where the acceptance of the offer by the Commissioners is subject to confirmation of the Court the offeror does not by mere acceptance get any vested right in the property so that he may demand automatic confirmation of his offer. The condition of confirmation by the Court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case it is the duty of the Court to satisfy itself that having regard to the market value of the property the price offered is reasonable. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion. In Gordhan Das Chuni Lal v. T. Sriman Kanthimathinatha Pillai(1) it was observed that where the property is authorised to be sold by private contract or otherwise it is the duty of the Court to satisfy itself that the price fixed 'is the best that could be expected to be offered. That is because the Court is the custodian of the interests of the Company and its creditors and the sanction of the Court required under the Companies Act has to be exercised with judicial discretion regard being had to the interests of the Company and its creditors as well. This principle was followed in Rathnaswami Pillai v. Sadapathi Pillai(2) 'and S. Soundajan v. M/s. Roshan & Ca.(1). In A. Subbaraya Mudaliar v. K.Sundarajan it was pointed out that the condition of confirmation by the Court being a safeguard against the property being sold at an inadequate price, it will be not only proper but necessary that the Court in exercising the discretion which it undoubtedly has of accepting or refusing the highest bid at the auction held in pursuance of its orders, should see that the price fetched at the auction, is an adequate price even though there is no suggestion of irregularity or fraud. It is well to bear in mind the other principle which is equally well-settled namely that once the court comes to the conclusion that the price offered is adequate, no subsequent higher offer can constitute a valid ground for refusing confirmation of the sale or offer already received. (See the decision of the Madras High Court in Roshan & Co's case)” From the above quoted decisions it emerges that in the said decision, which is, almost in all cases, consistently considered and followed by the Apex Court, it emerges that in view of the fact that the Court is the custodian of interest of the company and creditors it is not only proper but necessary for the Court to ensure that the price fetched at the auction is best and higher price though there is no suggestion of irregularity or fraud. Thus, the said observation by the Apex Court emphasizes that the paramount duty of the Court is to protect best interest of the company, creditors (i.e. shareholders and contributories) and the workers and to ensure that the Court should also ensure that highest price is received at the auction. Ordinarily, this would translate into the situation which would justify the decision to set side the confirmed sale in the event higher price is offered even after confirmation of sale. However, it may be noticed that in the very same decision the Apex Court, in the immediately next paragraph, observed that it is equally well settled that once the Court comes to the conclusion that the price offered is adequate, subsequent higher offer cannot be a valid ground to refuse confirmation of sale. Thus, the guiding and determining factor is “satisfaction of the Court that adequate and reasonable price is received”. (b) In 1974, in the case between M/s Kayjay Ind. (Pvt.) Ltd. vs M/s Asnew Drums (P) Ltd ( 1974 2 SCC 213 ) Hon'ble Apex Court examined the issue related to sale of property by Court. True it is that, in the said decision, Hon'ble Apex Court examined the issue in light of the provisions under Order 21 Rule 90. However, the issue about the Court's obligation in accepting previous bid was also considered by Hon'ble Apex Court in the said decision. Hon'ble Apex Court speaking through Hon'ble Mr. True it is that, in the said decision, Hon'ble Apex Court examined the issue in light of the provisions under Order 21 Rule 90. However, the issue about the Court's obligation in accepting previous bid was also considered by Hon'ble Apex Court in the said decision. Hon'ble Apex Court speaking through Hon'ble Mr. Justice V.R.Krishna Iyer [as His Lordship then was] observed in the said decision that:- “9.........Be it by a receiver, commissioner, liquidator or Court this principle must govern. This proposition has been propounded in many rulings cited before us and summed up by the High Courts. The expressions 'material irregularity in the conduct of the sale' must be benignantly construed to cover the climax act of the Court accepting the highest bid. Indeed, under the Civil Procedure Code, it is the Court which conducts the sale its duty to apply its mind to the material factors bearing its mind to the material factors bearing on the reasonableness of the price offered is part of the process of obtaining a proper price in the course of the sale. Therefore, failure to apply its mind to this aspect of the conduct of the sale may amount to material irregularity Mere, substantial injury without material irregularity is not enough even as material irregularity not linked directly to inadequacy of the price is insufficient. And where a Court mechanically conducts the sale or routinely signs assent to the sale papers, not bothering to see if the offer is too low and a better price could have been obtained, and in fact the price is substantially inadequate, there is the presence of both the elements of irregularity and injury. But it is not as if the Court should go on adjourning the sale till a good price is got, it being a notorious fact that Court sales and market prices are distant neighbours. Otherwise, decree-holders can never get the property of the debtor sold. Nor is it right to judge the unfairness of the price by hindsight wisdom. May be, subsequent events, not within the ken of the executing Court when holding the sale, may prove that had the sale been adjourned a better price could have been had. Otherwise, decree-holders can never get the property of the debtor sold. Nor is it right to judge the unfairness of the price by hindsight wisdom. May be, subsequent events, not within the ken of the executing Court when holding the sale, may prove that had the sale been adjourned a better price could have been had. What is expected of the Judge is not to be a prophet but a pragmatist and merely to make a realistic appraisal of the factors, and, if satisfied that, in the given circumstances, the bid is acceptable, conclude the sale. The Court may consider the fair value of the property, the general economic trends, the large sum required to be produced by the bidder, the formation of a syndicate, the futility of postponements and the possibility of litigation, and several other factors dependent on the facts of each case. Once that is done, the matter ends there. No speaking order is called for and no meticulous post mortem is proper. If the Court has fairly, even if silently, applied its mind to the relevant considerations before it while accepting the final bid, no probe in retrospect is permissible. Otherwise, a new threat to certainty of Court sales will be introduced. 10. So viewed we are satisfied that the district Court had exercised a conscientious and lively discretion in concluding the sale at Rs. 11.5 lakhs. If the market value was over 17 lakhs, it is unfortunate that a lesser price was fetched. Mere inadequacy of price cannot demolish every Court sale. Here, the Court tried its best, time after time, to raise the price. Well-known industrialists in the public and private sectors knew about it and turned up. Offers reached a stationary off indefinitely in recovering its dues on baseless expectations and distant, prospects. The judgment-debtor himself, by his litigious exercises, would have contributed to the possible buyers being afraid of hurdles ahead. After all, producing around Rs. 11.4 lakhs openly to buy an industry is not easy even for apparently affluent businessmen. The sale proceedings had been pending too long and the first respondent could not, even when given the opportunity, produce buyers by private negotiation. Not even a valuer's report was produced by him. After all, producing around Rs. 11.4 lakhs openly to buy an industry is not easy even for apparently affluent businessmen. The sale proceedings had been pending too long and the first respondent could not, even when given the opportunity, produce buyers by private negotiation. Not even a valuer's report was produced by him. We are satisfied that the District Judge had committed no material irregularity in the conduct of the sale in accepting the highest offer of the appellant on September 3, 1969.” Thus, Hon'ble Apex Court has observed that material irregularity in the conduct of the sale must be benignantly construed and failure to apply mind to the material factors bearing on the reasonableness of the price would amount to material irregularity and that where the sale is conducted mechanically or where it is not examined as to whether the offer is too low and better price could be obtained or the price is substantially inadequate, then there is presence of element of irregularity as well as injury. The above quoted observations by the Apex Court clearly brings out that if relevant aspects are not taken into account at the time of determining revised / upset price before inviting bids and consequently correct and proper market value is not reflected in the reserved price then it would amount to material irregularity and that would be sufficient justification to deconfirm the sale even though there is no suggestion or allegation about fraud. The same principle would be applicable to the case of sale by company court for properties of the company in liquidation. (c) In the decision in case of Sharawan Kumar Agarwal v. Shrineap Investment Ltd & Ors [(1990) 2 Comp LJ 231 (Cal)], Hon'ble High Court of Calcutta, speaking through the Chief Justice Hon'ble Mr. Justice P.D.Desai (as his Lordship then was) observed thus:- “44. Now, it is true that the Court must satisfy itself that having regard to the market value of the property, the price offered and accepted is adequate. The Court being the custodian of the interests of the company and its creditors, the power to confirm a sale or to withdraw the confirmation has to be exercised with judicial discretion regard being had to the fact that the price fetched is the best that can be expected to be offered even though there may be no suggestion of irregularity of fraud. It is also true that in the present case, there is a specific provision incorporated in the terms and conditions of sale that the sale in favour of a purchaser was liable to be set aside, even after the sale is confirmed and the purchase consideration is paid, in the interest and benefit of creditors, contributors and all concerned and/or for public interest. However, the investment of such power does not mean that the Court should review and set aside an order confirming a sale which has already taken place merely because at a later stage on second thoughts someone, more particularly, an offeror who was outbidden, says that he is willing to pay more. Once the Court has come to the conclusion that the price offered is adequate and has confirmed the sale, the subsequent higher offer made under such circumstances, without anything more, cannot constitute a valid ground for interfering with the rights arising out of sale which has already been confirmed. 46. Against this background, merely because on second thoughts on the next day, the appellant came forward with an offer to pay more, there would be no justification, without more, to deconfirm the sale already made in favour of the first respondent, who had meanwhile parted with ten percent of the purchase price, taken delivery of the assets and entered into an agreement with workmen. None complained when the sale was confirmed by the Court. None other than the appellant is before us challenging the confirmation by way of appeal. True, the secured creditors appear to have extended their support to the appellant when he came forward with a fresh offer on the day next after the sale was confirmed and they have supported him in this appeal also. But this, too, apparently is a second thought. The unions with whom the agreement has been entered into by the first respondent are supporting it in the present proceedings. About 100 workmen are stated to have been employed. Having regard to all the circumstances of the case, in our opinion, there is no justification for interference with the confirmation of sale made by the Court in favour of the first respondent and its refusal to set aside the same. About 100 workmen are stated to have been employed. Having regard to all the circumstances of the case, in our opinion, there is no justification for interference with the confirmation of sale made by the Court in favour of the first respondent and its refusal to set aside the same. If a higher offer made subsequently on second thoughts by someone who was outbidden when the sale was confirmed were to be regarded, without anything more, as the sole factor for withdrawing sanction already granted to a Court sale, there is a real risk of such sales becoming a speculative exercise which may not inspire the confidence of persons who act on the faith and belief in the finality of actions of Court. We see no reason, therefore, to set aside the orders under appeal passed by the Court.” In the above decision by High Court of Calcutta (Coram: Honourable the Chief Justice Mr. P.D. Desai, as his lordship then was) the Court did not accept the subsequent higher offer though it had support of the secured creditors and the Court observed that power and discretion to take steps to fetch best price does not mean that the Court should review and set aside the order confirming sale which has already taken place, merely because at a later stage on second thought someone comes forward and says that he is willing to pay more. The Court emphasized the requirement of something more than merely “higher offer” which means infection in the decision of sale confirmation by way of illegality or fraud. (d) In the decision between Lica (P.) Ltd v. Official Liquidator & Anr. [1996 (85) CC 788], Hon'ble Apex Court observed thus:- “The purpose of an open auction is to get the most remunerative price and it is the duty of the court to keep openness of the auction so that the intending bidders would be free to participate and offer higher value. If that path is cut down or closed the possibility of fraud or to secure inadequate price or underbidding would loom large. The court would, therefore, have to exercise its discretion wisely and with circumspection and keeping in view the facts and circumstances in each case. If that path is cut down or closed the possibility of fraud or to secure inadequate price or underbidding would loom large. The court would, therefore, have to exercise its discretion wisely and with circumspection and keeping in view the facts and circumstances in each case. One of the terms of the offer in this case is that even confirmation of the sale is liable to be set aside by the High Court as per Clause 11 of the conditions of offer. The sale conducted was subject to confirmation. Therefore, mere acceptance of the offer of Mr. Shantilal Malik does not constitute any finality of the auction nor would it he automatically confirmed. The appellant offered a higher price even now at Rs. 45,00,000. Keeping in view the interest of the company and the creditors and the workmen to whom the sale proceeds would he applied, the learned company judge was right in exercising her discretion to reopen the auction and directing Mr. Shantilal Malik as well to make a higher offer than what was offered by the appellant. In every case it is not necessary that there should be fraud in conducting the sale, though on its proof the sale gets vitiated and it is one of the grounds to set aside the auction sale. Therefore, the discretion exercised by the learned single judge cannot be said to be unwarranted. Under the circumstances, we are satisfied that the Division Bench of the Calcutta High Court-committed manifest illegality in interfering with the order of the learned single judge. The appeal is allowed. The order of the Division Bench is set aside..............” (e) In the decision in case between Divya Manufacturing Co. Ltd. vs. Union Bank of India & Ors. [ (2000) 6 SCC 69 ], Hon'ble Apex Court considered the decision in case of Navalkha and Sons and examined the issue whether the request to cancel sale confirmation order and to accept fresh offer after having confirmed the sale in favour of one party should be entertained or not. In the said decision Hon'ble Apex Court observed, inter alia, that:- “11. In our view, on facts it is apparent that the Division Bench of the High Court has considered all the relevant facts including the fact that at the initial stage, the appellant 'Divya' offered only Rs. 37 lakhs to purchase the properties. In the said decision Hon'ble Apex Court observed, inter alia, that:- “11. In our view, on facts it is apparent that the Division Bench of the High Court has considered all the relevant facts including the fact that at the initial stage, the appellant 'Divya' offered only Rs. 37 lakhs to purchase the properties. That means, the appellant wanted to purchase at a throw away price. Thereafter, at the intervention of the Court, the price was increased to Rs. 1.3 crores by the appellant. This indicates that appellant was keen to purchase the property, however by paying only the bare minimal amount and to take advantage of sale by the liquidator in the hope that if there are no other purchasers, it would purchase the Company at a price which is abnormally below the market price. It is also true that on 2nd July 1998, the offer made by the appellant was accepted and it was ordered that sale in its favour be confirmed, but at the same time, before possession of the property could be handed over, or before the sale deed could be executed in its favour, respondent Nos. 7 and 8 pointed out that the assets and properties could be sold at Rs. 2 crores. For showing their bona fides, they were directed to deposit Rs. 40 lakhs each and also to pay Rs. 70 thousand each as damages to the appellant. Further, the application for setting aside the sale was filed within a few days of the order accepting the bid of the appellant. In these set of circumstances, when correct market value of the assets was not properly known to the Court and the sale was confirmed at grossly inadequate price, it was open to the Court to set it at naught in the interest of the company, its secured and unsecured creditors and the employees. Appellant is also duly compensated by payment of Rs. 70 thousand each by respondent Nos. 7 and 8. 13. From the aforesaid observation, it is abundantly clear that the Court is the custodian of the interests of the Company and its creditors. Hence, it is the duty of the Court to see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud. 7 and 8. 13. From the aforesaid observation, it is abundantly clear that the Court is the custodian of the interests of the Company and its creditors. Hence, it is the duty of the Court to see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud. ........” The Apex Court has, thus, observed that it is the duty of the Court to satisfy itself that before putting up notice / advertisement inviting bids, proper and adequate and reasonable market value of the property is determined and at later stage to satisfy itself about adequacy of the price being offered and accepted. It is also observed by the Apex Court that if the correct market value of the property was not properly known to the Court and the sale was confirmed at grossly inadequate price then even in absence of any suggestion or allegation about illegality or fraud in the sale process, the Court may, upon being satisfied, set aside the sale confirmation if it is established that the sale was confirmed at grossly inadequate price. (f) In the decision in case of Lica (P) Ltd. vs. Official Liquidator [ (2000) 6 SCC 82 ], Hon'ble Apex Court observed that: “5. Proper control of the proceedings and meaningful intervention by the court would prevent the formation of syndicate, underbidding and the resultant sale of property for inadequate price. The order passed by this Court yielded the result that the property which would have been finalised at Rs.45 crores is made. In other words, the property under sale is capable of fetching a higher market price. Under these circumstances, though there is some force in the contention of Shri Ramaswamy that the court auction may not normally be repeatedly disturbed, since this Court, on the earlier occasion, had limited the auction between the two bidders, the impediment will not stand in the way of directing sale afresh. Even today the parties are prepared to participate in the bid. Accordingly we fix the upset price at Rs.1.50 crores. It is stated that Mr. S.L. Malik had already deposited a sum of Rs.45 lakhs. Bank drafts for a sum of Rs.80 lakhs are produced before us today. Even today the parties are prepared to participate in the bid. Accordingly we fix the upset price at Rs.1.50 crores. It is stated that Mr. S.L. Malik had already deposited a sum of Rs.45 lakhs. Bank drafts for a sum of Rs.80 lakhs are produced before us today. Therefore, we direct that the bank drafts should be deposited in the office of the learned Company Judge on or before 27.9.1993 and the balance amount of Rs.25 lakhs shall be deposited on or before 11.10.1993 making up the total sum of Rs.1.50 crores. Learned Single Judge is requested to conduct the auction afresh between the parties immediately after the reopening of pooja holidays fixing the upset price at Rs.1.50 crores. The highest bidder should deposit the balance amount on the same day before the working hours are closed. On deposit so made the Court would confirm the sale. No appeal thereon shall be entertained on any ground whatsoever.” (g) In the case between Union Bank of India v. Official Liquidator H.C. Of Calcutta & Ors. [ (2000) 5 SCC 274 ], the Hon'ble Apex Court observed, inter alia, that:- “6. Against that order appellant preferred an appeal before the Division Bench. Before the Division Bench a contention was raised with regard to the inadequacy of the price and the Court observed that the Court would be rather loath to interfere and intervene in a Court Sale where a question of inadequacy of the price is to be considered by observing that:- "Court sale has taken place for the benefit of the employees concerned and more than 100 employees were starving to death and the Official Liquidator was trying to sell the assets as a going concern so that the employment opportunities can be maintained in these hard days." 10. At the outset we would state that in proceedings for winding up of the Company under liquidation, the Court acts as a custodian for the interest of the company and the creditors. Therefore, before sanctioning the sale of its assets, the Court is required to exercise judicial discretion to see that properties are sold at a reasonable price. For deciding what would be reasonable price, valuation report of an expert is must. Not only that, it is the duty of the Court to disclose the said valuation report to the secured creditors and other interested persons including the offerors. For deciding what would be reasonable price, valuation report of an expert is must. Not only that, it is the duty of the Court to disclose the said valuation report to the secured creditors and other interested persons including the offerors. Further, it is the duty of the Court to apply its mind to the valuation report for verifying whether the report indicates reasonable market value of the property to be auctioned, even if objections are not raised. 19. As discussed above, in the present case, there is total non-application of mind to the material which is required to be considered for auction sale of the assets of the Company. 26. Hence, if the sale is set aside in appeal, it cannot be stated that purchaser is entitled to have refund of the amount with interest.” (h) In the decision in case between Gajraj Jain vs. State of Bihar (2004 [7] SCC 151, Hon'ble Apex Court observed that:- “14. In the present case, it has been urged that absence of valuation report and the reverse bid does not vitiate the sale. We do not find merit in this argument. In the case of M/s. S. J. S. Business Enterprises (P) Ltd. (supra), it has been held that the Financial Corporation, in the matter of sale under S. 29, must act in accordance with the statute and must not act unreasonably. In this case, the Corporation fails on both the counts. It has neither complied with the provisions of sub-sections (1) and (4) of S. 29, nor has it acts fairly. The test of reasonableness has been laid down in the above judgment in which it is held that reasonableness is to be tested against the dominant consideration to secure the best price. Value or price is fixed by the market. In the case of going concern, one has to value the assets shown in the balance sheet (Valuation of Real Property by S. Datta page 198).In our view, if the object of S. 29 of the Act is to obtain the best possible price then the Corporation ought to have called for the valuation report. This has not been down. There is no inventory of assets produced before us. The mortgaged assets of the company could be sold on itemized basis or as a whole whichever is found on valuation to be more profitable. This has not been down. There is no inventory of assets produced before us. The mortgaged assets of the company could be sold on itemized basis or as a whole whichever is found on valuation to be more profitable. No particulars in that regard have been produced before us. If publicity and maximum participation is to be attained then the bidders should know the details of the assets (or itemized value). In the absence of the proper mechanism the auction sale becomes only a pretence....... ” (i) In the decision in case of Valji Khimji and company vs. OL of Hindustan Nitro Product (Gujarat) Limited ( 2008 9 SCC 299 ) Hon'ble Apex Court, considered the case of the bidder who did not participate in auction proceedings but after the sale was confirmed by the Court in favour of one of the bidders (who participated in auction proceedings and whose offer was highest during auction) he belatedly came forward with higher offer coupled with request to cancel the sale. In the said decision Hon'ble Apex Court observed that:- “30. In our opinion the decision of this Court in Divya Manufacturing Company (P) Ltd. (supra) cannot be treated as laying down any absolute rule that a confirmed sale can be set aside in all circumstances. As observed by one of us (Hon. Katju, J.) in his judgment in Civil Appeal No. 4908/2008 (Dr. Rajbir Singh Dalai vs. Chaudhary Devi Lal University, Sirsa and Anr. pronounced on 6.8.2008), a decision of a Court cannot be treated as Euclid's formula and read and understood mechanically. A decision must be considered on the facts of that particular case. 31. If it is held that every confirmed sale can be set aside the result would be that no auction sale will ever be complete because always somebody can come after the auction or its confirmation offering a higher amount. 32. It could have been a different matter if the auction had been held without adequate publicity in well-known newspapers having wide circulation, but where the auction sale was done after wide publicity, then setting aside the sale after its confirmation will create huge problems. 32. It could have been a different matter if the auction had been held without adequate publicity in well-known newspapers having wide circulation, but where the auction sale was done after wide publicity, then setting aside the sale after its confirmation will create huge problems. When an auction sale is advertised in well-known newspapers having wide circulation, all eligible persons can come and bid for the same, and they will be themselves be to blame if they do not come forward to bid at the time of the auction. They cannot ordinarily later on be allowed after the bidding (or confirmation) is over to offer a higher price. 33. Of course, the situation may be different if an auction sale is finalized say for Rs.1 crore, and subsequently somebody turns up offering Rs. 10 crores. In this situation it is possible to infer that there was some fraud because if somebody subsequently offers 10 crores, then an inference can be drawn that an attempt had been made to acquire that property/asset at a grossly inadequate price. This situation itself may indicate fraud or some collusion. However, if the price offered after the auction is over which is only a little over the auction price, that cannot by itself suggest that any fraud has been done. 35. In the first case mentioned above, i.e. where the auction is not subject to confirmation by any authority, the auction is complete on the fall of the hammer, and certain rights accrue in favour of the auction purchaser. However, where the auction is subject to subsequent confirmation by some authority (under a statute or terms of the auction) the auction is not complete and no rights accrue until the sale is confirmed by the said authority. Once, however, the sale is confirmed by that authority, certain rights accrue in favour of the auction purchaser, and these rights cannot be extinguished except in exceptional cases such as fraud.” What emerges from the observations by the Apex Court in the said decision is that sanctity of the confirmed sale is important and merely because offer for higher price is placed before the Court then in absence of fraud or illegality confirmed sale ought not be disturbed and set aside otherwise any auction cannot be finalized and any auction will not attain finality. Besides the exception on aground of fraud and illegality other exception, which the Apex Court in the decision, found acceptable is “grossly inadequate price” with emphasis on the expression “gross”. This would mean that if slightly higher price is offered by any interested purchaser then the Court should not readily agree to set aside the confirmed sale. (j) In the decision by the Hon'ble Division Bench of this Court dated 25.7.2013 rendered in OJ CA No.299 of 2013 in OLR No.34 of 2013 wherein the Hon'ble Division Bench observed that:- “7.1 Taking into consideration the aforesaid ruling of the Honourable the Apex Court and the facts of the case, this Court deems it proper to recall its order dated 17.04.2013. Taking into consideration the facts of the case, it is deemed proper to direct the Official Liquidator to re-advertise the auction of this property on the same terms and conditions but with increased upset price of 1.60 crores in three daily newspapers, of which one is having circulation at national level.” So far as the above referred order by Division Bench is concerned it is relevant to note that in the said decision not only the facts materially differ from the facts in present case but in the said case the Hon'ble Division Bench was satisfied that the two bidders who happened to be brothers, mislead and misdirected the auction process which, in the facts of the case, Court considered fraud or mischief with the Court. In this context, Division Bench recorded in paragraph No.4 of the said decision:- “Learned advocate Mr. Shah for the applicant submitted that it is not in dispute that the highest bidder in second auction happens to be brother of third highest bidder in the first auction. The price offered by the brother of the present highest bidder was Rs.2.10 crores whereas the price offered by the present highest bidder is only Rs.1.40 crores. Learned advocate Mr. Shah for the applicant submitted that it is not in dispute that the highest bidder in second auction happens to be brother of third highest bidder in the first auction. The price offered by the brother of the present highest bidder was Rs.2.10 crores whereas the price offered by the present highest bidder is only Rs.1.40 crores. Learned advocate Mr. Shah for the applicant submitted that mere price difference itself is suggestive of the fact that the present highest bidder took a clue from his brother i.e. third highest bidder and having realised that the first highest bidder of first auction “who quoted price Rs.2.18 crores” is not coming forward the present highest bidder may try to purchase the property at the minimum possible price.” Having regard to the said aspect and also having regard to the gap between the price subsequently offered and the previous offer and after considering the decisions in Divya Manufacturing Co. (supra) and Valji Khimji (supra) the Court set aside the sale confirmation order. In light of the facts of present case the said order would not be of assistance to the applicant in supporting its request in present case. (k) Subsequently, in case between Abhishek Shops & Warehouse Co-op. Soc. Ltd. vs. Monali Textile in O.J. Appeal No.49 of 2003, decided on 24.12.2003 the Division Bench observed that: “7. Thus in light the above price fetched by the property/land in question has to be considered adequate or not. The impugned order as observed above has indirectly suggested that the price fetched is inadequate while observing that the property could have fetched more price and that the Company Court could have ordered for revaluation of the property under the sale. In our opinion this is sufficient to indicate whether the price fetched in the auction can be said to be adequate. We are in agreement with the observation in the impugned order that the property under sale could have fetched more price than Rs.4,05,00,000/-. In our opinion this is sufficient to indicate whether the price fetched in the auction can be said to be adequate. We are in agreement with the observation in the impugned order that the property under sale could have fetched more price than Rs.4,05,00,000/-. It need hardly be said that the effort of the Company Court has to be in the direction of obtaining the maximum price of the property in the auction for the benefit of workers, secured, unsecured creditors and the company, and the entire class of creditors would stand to benefit by the higher price received by the property under the sale.” The above mentioned observations in the said order are made in factual background which is recorded in the order. The relevant part of the order reads thus:- “in the auction whereas Respondent No.1 gave offer of Rs.75,00,000/-and raised it to Rs.3,76,00,000/. The property was valued by the approved valuer in January 1998 at Rs.3,88,00,000/-; that in the Court auction the appellant gave highest bid of Rs.4,05,00,000/-. Respondent No.1 did not participate in Court auction. Whereas Mahavir Developers (respondent no.8) gave bid of Rs.3,86,00,000/-. By the order dated 11.9.2003 Company Judge accepted the offer made by Arvindbhai Kantibhai Patel promoter / organizer of proposed society for Rs.4.05,00,000/-and confirmed the sale accordingly........After confirmation of sale in favour of the proposed society, present respondent no.1 on 19-9-2003 moved an application being O.J.M.C.A. No.167 of 2003 praying for recall / review of the order dated 11.9.2003 accepting highest bid of Rs.4,05,00,000/-and confirming the sale as above, contending that because of some financial constraints the applicant could not bid or put any offer either before the committee or before the Court; that the applicant has now arranged the finance and applicant is ready to deposit an amount of Rs.40 lacs towards E.M.D. without any interest thereon; that the applicant is ready to pay minimum price of Rs.4.15 crores as against Rs.4.05 crores; that the sale should be confirmed in favour of the applicant by reviewing /modifying the order dated 11.9.2003.” In the said decision Court also observed that:- “....it is not merely higher offer given by respondent no.1 which weighed with the Company Court in directing reauction of the property, but found necessary in light of the circumstances pointed out above and that the property would have fetched more price and with that the order dated 11-9-2003 has been recalled. It is a settled legal position that the discretion exercised in directing reauction by the Company Court should not be interfered with unless the impugned order is wrong on principle. Thus, merely higher offer by the applicant was not the reason for directing re-auction in said case and that therefore the said decision does not help the applicant since in present case offer of higher price is the only reason cited in support of the request. Actually the said decision reiterates the position which is maintained since the decision in Navalkha Brothers (supra) viz. merely higher offer cannot be good and valid ground to cancel confirmed sale. (1) In the decision in case between FCS Software Solutions Ltd. Vs. LA Medical Devices Ltd (2008 (10) SCALE, Hon'ble Apex Court found that:- “But it is also clear that certain facts which were necessary to be brought to the notice of intending purchasers were not set out in the proclamation of sale nor were disclosed at the time of sale notice. They related to valuation of movable and immovable properties, fixation of reserve price, non-inventory of plant and machinery, etc. The attention of the Company Judge was invited by other bidders by filing Company Applications. The Company Judge considered the objections and having prima facie satisfied, ordered fresh auction. We find no illegality in the said approach.” It was in the backdrop of the said fact that order passed by learned Company Judge for fresh auction in the said decision was found to be justified. In present case the facts are materially different. Hence the said decision does not help the applicant. (m) Learned Counsel for the applicant has relied on the decision in case of Shraddha Aromatics Pvt. Ltd. vs. Official Liquidator for Global Arya Industries Ltd (2011 [6] SCC 207). In the said decision the Court has observed, inter alia, that:- “15. We have considered the respective submissions and carefully perused the record. Ordinarily, the Court is loathe to accept the offer made by any bidder or a third party after acceptance of the highest bid / offer given pursuant to an advertisement issued or an auction held by a public authority. We have considered the respective submissions and carefully perused the record. Ordinarily, the Court is loathe to accept the offer made by any bidder or a third party after acceptance of the highest bid / offer given pursuant to an advertisement issued or an auction held by a public authority. However, in the peculiar facts of this case, we are inclined to make a departure from this rule.” Thus, in the said decision it is clarified that Hon'ble Apex Court made departure from normal rule (i.e. that the Court would be loathe to accept the offer made by any bidder after acceptance of highest offer given in response to the advertisement or at the auction.) In view of the peculiar facts of the case Hon'ble Apex Court observed that in view of peculiar facts of the case departure from the ordinary rule is being made. However, even as per the said decision the normal and ordinary rule is still the same which is mentioned in paragraph No.15 of the decision and which is consistently followed since Navalkha Brothers (supra). This decision also, thus, does not help the applicant. 12. The principle which can be deduced from the above quoted observations by Hon'ble Apex Court can be summarized thus:- (a) Court acts as a trustee and custodian of the property of the company. Therefore it is duty of the Court to constructively apply mind to all facts and attending circumstances and relevant aspects while ascertaining the market value of the properties / assets and while settling the reserve price and to satisfy itself that the reserved price so determined is reasonable and adequate. (b) Once the reserved price is settled to the satisfaction of the Court, sale of the properties / assets should be effected by public auction and after giving wide publicity in sufficient number of daily newspapers having wide circulation in both scripts i.e. vernacular (local language) and English language. (c) It is also Court's duty to ensure that the sale – auction is conducted in fair and transparent manner and the Court should endeavour to ensure that best and highest price is fetched for the properties / assets of the company. (d) Once the sale is confirmed after following the procedure and upon being satisfied about adequacy of the price, ordinarily the confirmed sale and concluded contract should not be interfered with by cancelling sale confirmation order. (d) Once the sale is confirmed after following the procedure and upon being satisfied about adequacy of the price, ordinarily the confirmed sale and concluded contract should not be interfered with by cancelling sale confirmation order. (e) Merely on the ground that after confirmation of sale, someone comes forward and offers higher price, the confirmed sale and concluded contract, without anything more, should not be cancelled because mere offer for higher price is not a good and valid ground to interfere with and to cancel confirmed sale and concluded contract. (f) If any fraud is perpetrated or if any other similar illegality is committed or any serious irregularity which would vitiate the sale process has occurred, then the Court would be, in given case, justified in interfering with and cancelling confirmed sale and concluded contract. (g) The other reason or circumstance in which the Court may interfere with and may cancel the confirmed sale and concluded contract is that the Court, upon consideration of relevant facts, finds unto its satisfaction, that the price offered and received / accepted in the sale process is grossly inadequate. (h) If Court were to interfere with the confirmed sale upon subsequently receiving higher offer, then a moderate or slight variation or increase over accepted price, without anything more, cannot lead the Court to the conclusion that accepted price is grossly inadequate. 12.1 It is pertinent that the sale (of assets and properties of company in liquidation) by the Court is a measure of safeguard against the assets of the company being sold at inadequate price or at price less than the realizable market value. Therefore, the Court has to maintain strict vigil, from the very inception, over the sale process. So as to ensure that complete fairness and transparency in sale process is maintained, all measures and steps – which can be reasonably perceived and contemplated – to eliminate formation of cartel or syndicates and / or undervaluation of the assets (in given case even by valuer) should be taken so as to ensure that best and highest price for company's properties can be fetched. If a valuer is engaged to suggest valuation of the property then instead of mechanically relying on such report and before accepting and acting upon such report, the Court should examine as to whether relevant factors such as the age and physical condition of the property in question, working performance, market demand of the property and its utility, the brand / make of the property in question (in case of plant and machinery fixtures etc.), location of the plot and its surrounding, existing and prospective development of the area and its surrounding, infrastructure facilities, nature of ownership, encumbrances (if any), sale instances for last 2-3 years, valuation declared by government etc. (in case of land of the company), or the quality of construction, future life of the construction, requirements (if any) for repairs, salvage value, cost of construction, dimension and physical condition of the assets (in case of constructed property) are duly taken into consideration by the valuer or not. While settling the reserved price and / or while accepting highest offer the Court is not expected to be a prophet but the Court should make realistic assessment of all factors and circumstances. Unless the Court is satisfied about adequacy of price at the auction, the order of confirmation of sale should not be made inasmuch as such order would not be proper exercise of judicial discretion. Failure to apply mind to relevant factors having bearing on reasonableness of price would amount to material irregularity. 12.2 Mere offer for higher price should not be the yardstick and guiding factor for the Court to cancel confirmed sale and concluded contract inasmuch as in many cases even business rivalry and strange commercial considerations may tempt someone to come forward and offer some higher price as against the amount of sale consideration and in cases where after sale confirmation, offer for higher price is made, then the Court should consider as to whether the reserved priced and / or price offered -received at the sale process can be said to be “grossly inadequate”. The extent of the gap between the higher offer and accepted price (i.e. price accepted at auction) in itself should be the convincing factor – evidence to satisfy the Court that the accepted price is grossly inadequate. The extent of the gap between the higher offer and accepted price (i.e. price accepted at auction) in itself should be the convincing factor – evidence to satisfy the Court that the accepted price is grossly inadequate. Once the Court is satisfied about adequacy of the price then mere higher offer will not be good and valid ground to cancel confirmed sale / concluded contract. 12.3 Court has to keep in focus that despite inherent presence of competition in process of auction it often does not yield best price and therefore Court has to allow some leeway – a margin to take care of and hedge against this possibility – eventuality. Confirmation of sale should not be interfered with easily or quickly and at a fall of hat or frequently and it should not be disturbed / deconfirmed without good reason and strong justification otherwise it may prove self defeating as the bidder / prospective bidder will tend to lose faith in sale / auction by Court, for its uncertainty. 12.4 While the Court should endeavour to ensure that the price fetched is the highest and best price, in temptation to receive and secure still higher and better price confirmed sale and concluded contract should, ordinarily, not be quickly interfered with and cancelled and it should be kept in focus that while it is Court's duty to best serve the interest of company, creditors and workers by securing best price, it is also Court's obligation to maintain the sanctity of concluded contract because if concluded contract is lightly and / or repeatedly interfered with, and that too merely because someone subsequently comes with higher offer, then such interference by the Court and cancellation of concluded contract would result into erosion of faith in the system and sanctity of the contract. Whilst in the event of demonstrable mischief or fraud during the sale process Court may readily cancel the sale because fraud would vitiate everything, the higher price factor may be entertained only if the quantum of the amount offered as higher price is so high and the extent of the gap between the received price and subsequently offered price is so large that it in itself (i.e. the gap itself) would ex facie establish and make it apparent that the received price is “grossly inadequate ” and that the process of settling reserved price was done mechanically or that valuer's report was mechanically relied on. 12.5 Ordinarily, only Court's satisfaction about grossly “inadequate price” or perpetration of fraud or occurrence of irregularity (which is serious enough to vitiate the sale) can be good and valid ground for cancelling the confirmed sale. However, in a given case offer for higher price even in cases where there is no allegation about fraud or irregularity may provide a good and justiciable ground to cancel the confirmed sale, however that would be only in exceptional and rare case where the subsequently offered higher price is significantly higher than the received price whereas moderate increase or slight variation cannot and should not be allowed to be a substitute of the paramount requirement viz. grossly in adequate price. 13. The case on hand and the applicant's request have to be examined in light of the above quoted observations, and the principles which emerge from the said observations, by Hon'ble Apex Court. From the observations by Hon'ble Apex Court it comes out that so as to decide whether a confirmed sale should be cancelled or not the Court will have to first find out whether the sale is vitiated by irregularity or fraud or illegality and / or whether the price offered and received (at auction) is “grossly inadequate” 14. From the facts of the case a very pertinent aspect has emerged viz. that this case and the applicant's request rests on only one premise viz. an intending or prospective purchaser (belatedly) offers higher price and it has come forward with modest increase of Rs.9.90 Lacs. 14.1 Another relevant aspect is that in present case there is no allegation or suggestion, from any side-including the applicant – about any irregularity and / or fraud and / or illegality in auction process. an intending or prospective purchaser (belatedly) offers higher price and it has come forward with modest increase of Rs.9.90 Lacs. 14.1 Another relevant aspect is that in present case there is no allegation or suggestion, from any side-including the applicant – about any irregularity and / or fraud and / or illegality in auction process. 14.2 The above quoted observations and the principles unanimously say that mere higher offer, without any thing more, is not good and valid ground to deconfirm and cancel 14.3 As mentioned earlier in present case there is no allegation about fraud or irregularity in sale process, which leaves behind the criterion of grossly inadequate the confirmed sale. That “something more” means irregularity or fraud in sale process or “grossly inadequate price”. Actually there is no material on record of the application which would demonstrate that the sale confirmation is hit by the said vice (i.e. by grossly inadequate price). 14.4 Nonetheless, having regard to the fact that it is Court's duty to secure highest and best price and to examine, for that purpose, that the price offered is adequate, the Court considered it appropriate to examine as to whether the yardstick / standard (i.e. reserved price) for examining the offers itself was reasonable and proper or not. Therefore, so as to be satisfied on this count the valuer's report (since the reserved price was settled on the basis of valuer's report) and previous reports filed by OL were called for vide order dated 25.9.2013. In response to the said order dated 25.9.2013, Official Liquidator filed report dated 4.10.2013 along with the material. On perusal it is noticed that in the minutes of meeting dated 5.11.2012, it is recorded, inter alia, that: “6. As regards sale of assets of the company, the Official Liquidator informed the members present that at the time of taking over possession of the assets of the company Shri Pranav Parikh, Govt. Approved Valuer was appointed for the purpose of preparation of inventory of the assets of the company and that Shri Pranav Parikh, Govt. Approved Valuer has submitted inventory report of the assets of the company dated 10.02.2011 in the sealed cover. After permission of the members of the sale committee the sealed cover containing the inventory report was opened after obtaining signature of the members present on the cover and was placed before the sale committee for perusal. Approved Valuer has submitted inventory report of the assets of the company dated 10.02.2011 in the sealed cover. After permission of the members of the sale committee the sealed cover containing the inventory report was opened after obtaining signature of the members present on the cover and was placed before the sale committee for perusal. After perusal of the said report it was decided to write letter to Shri Pranav Parikh, Govt. Approved Valuer to submit valuation report of the assets of the company latest by 30.11.2012.............” 14.5 Whereas, in the minutes of meeting dated 4.12.2012, it is recorded, inter alia, that: “6. .... The valuation of the Land, Building Super Structure, Plant & Machineries, Furniture and Fixtures, Raw material and finished goods stated in the valuation report are as under: Description of property Valuation price (Rs.) Freehold-non-agricultural admeasuring about 18274 Sq. 366.00 Lacs Mtrs situated at Block No.222, Village Vadavswami, P.O. Isand, Tal. Kalol, Dist. Gandhinagar Building super structure 56.00 Lacs Plant, Machineries and other movables 13.57 lacs Furniture and Fixtures 0.67 Lacs Raw Material and Finished goods 1.79 Lacs 7. After perusal of the valuation report it was decided to put the assets on sale in three different lots as under: Lot Description of property Upset Price (Rs.) Earnest Money Deposit (Rs.) No. I Freehold -non -agricultural 422.00 Lacs 42.20 Lacs land admeasuring about 18274 Sq. Mtrs...... II Plant, Machineries and all 16.50 Lacs 1.65 Lacs other movables including furniture, fixtures, Raw material and finished goods except records. III Composite Offer of Lot No. 438.50 Lacs 43.85 Lacs I & II. 15. On perusal of valuer's report it appears that the valuer seems to have considered the physical condition, age, working performance, production capacity etc. of the machines. According to the valuation report, the relevant details regarding plant and machinery, furniture and fixtures are mentioned in Annexure-3, which read thus: ANNEXURE-3 VALUATION OF PLANT AND MACHINERY Sr. No Name of Machinery & specification Qty. Name of Supplier/Make Year of Purchase Cond-ition Estimated value (Rs.in.la-cs Remark 1 Furnace fabricated from MS Structure, silica and other refractory's, consisting of gas burners, dampers, chequered jali platform and stairs, semi 1-unit Dhanlaxmi & Jay Trading, Manjushri Steel Traders, Dip Traders, Bee Gee Traders Pvt. Ltd and others 1993 Poor 9.10Lacs Burners missing and only skeleton exists auto bottle making machines, blowers, electrical panels and connected to self supporting MS chimney 2.5' dia. And 80' height, 2 Primary, Secondary Colling blowers with glass gathering pipes 2 Eng. Equipment 1993 Poor 0.10Lacs Without motors and one blower dismantled 3 Batch mixer 200 kg Cap. with drum 1 Kothari Eng. Works 1992 Poor 0.10Lacs Without motor 4 Bucket elevator 3 T Cap. 1 Unity Engineers 1993 Poor 0.15Lacs Without motor 5 Vibrating Screen Machine and batch storage tank 1 Marfin Minerals Pvt. Ltd and Been Gee Traders Pvt. Ltd. 1992-93 Poor 0.10Lacs Many parts/ accessories missing 6 Batch Charger Cap. 40 T/Day 1 Apex Eng. Works 1993 Poor 0.08Lacs Without motor 7 Annealing furnace with gas burners, wire mesh conveyors, gear rollers 2 TNF Engineers 1992-93 Poor 0.70lacs Without motors drive, blowers and electrical heaters and panels in skeleton condition Size 22.5 Mtrs. X 1.6 Mtrs. -1 No. and 22.5 Mtrs. X 1.4 Mtrs.-1 No. 8 Conveyor belt 18” width and 40' long with rollers. 1 Universal Industries 1993 Poor 0.08lacs Without motor 9 Air compressor horizontal type with receiver but without motors and 2 ABC Engineers 1993 Poor 0.10lacs Skeleton Exists compressors. 10 Air-compressor vertical type single cylinder with air receivers 3 ABC Engineers 1993 Fair/ Poor 1.10lacs But without motors 11 Electrification having main panel board, DB switches, starters, tube fittings, cables etc. Lot Bee Gee Traders Pvt. Ltd. and others 1993 Poor 0.20lacs All panels are in skeleton condition and cables missing at many places 12 Misc. items such as Ladder, power pack base plate, hand trolleys, MS Lot Local - Poor 0.15lacs Without motor drum, cup boards, racks, cabinets, V Belts, Electrical hoist Etc. 13 Various sizes of MS/GI Lot Local - Poor 0.15lacs - Pipes with accessories and fittings 14 Various size of moulds Lot Local - Poor 0.03lacs - 15 Industrial Exhaust Fan Pedestal and wall mounting type Lot Eng. Equipment 1993 Poor 0.18lacs Some motors and fan blades missing 16 315 KVA Capacity outdoor type transformer with DP structure 1 Mahi Electricals 1993 Poor 0.15Lacs Core and winding missing, lying skeleton on ground 17 Lathe machine cone pulley type, 4 ft bed length without motors 2 J K Engineers - Poor 0.18Lacs One machine only 18 Shaping machine having 24 inch stroke 1 Climax Engineers - Poor 0.10lacs Without motor and top section 19 MS tables with Vices 1 - - Poor 0.04Lacs 20 Fire-fighting equipments Lot Local 1993 Poor 0.08Lacs of various capacities-13 Nos. approximate 21 DG Set of 100 KVA capacity-1No. Only base plate, cylinder head and stator, and other DG 2 Kirloskar Cummins 1993 Poor 0.70Lacs All panels in skeleton condition without stator 22 Gas Measuring station with distribution units as GAIL standard supply system. Lot Gas Authority of Ltd. India 1993 Poor N.A. Property of GAIL hence not valued Total 13.57lacs 15.1 It is noticed from the said details that most of the plant and machinery which was put up for sale under Lot No.2 were purchased by the company in 1993. 15.2 In his report, the valuer has mentioned (in column No.6 which is titled as 'condition' of plant and machinery) that the condition of most of the plant and machinery was found to be poor as on date of inspection and valuation. Likewise, as regards furniture and fixtures also, the valuer has mentioned that condition was found to be from fair to poor. Other relevant aspect which emerge from the said report is that in most of the items, some of the crucial parts, necessary for its operation, were found to be missing, e.g. so far as Item Nos.1, to 8, 10, 12, 15 and 18 were found to be without their motor and / or burner and other accessories. As regards item No.5, the valuer has mentioned that many parts and machineries were missing and for item No.9, the valuer has mentioned that horizontal compressor was without its motor compressor and it was in skeleton condition. For item No. 1,9,11 and 21 valuer has mentioned that skeleton exists. A glance at valuer's report makes out that the plant and machinery was, as on the date of the inspection / valuation already in poor condition. On that basis, the valuer appears to have submitted the valuation of the items in question. 15.3 It was having regard to the said report that the order dated 30.4.2013 came to be passed in OLR No.21/2013 under which the valuer's report was accepted and on that basis, the upset price was determined. On perusal of the said report it comes out that the valuer considered all relevant aspects while assessing the market / fair value of the property. On perusal of the said report it comes out that the valuer considered all relevant aspects while assessing the market / fair value of the property. Upon considering the age of the property and the property's physical condition described by the valuer, it appears that valuation of the fair / market value of the property by the valuer was reasonable and in view of the facts of the case it cannot be said to be grossly inadequate. It is pertinent that before the said report was placed before the Court and before it was considered by the Court the sale committee had considered and accepted it and recommended the reserved price which came to be approved by the court vide order dated 30.4.2013. 15.4 At this stage it is relevant to mention that in present case property in question is plant and machinery, furniture and fixtures and therefore its resell value or market value will depend on its age and physical condition at the relevant time. In such case it would not be possible for the Court to ascertain market value of such property in same manner as it can be decided in case of immovable property like land. Therefore, court has to rely on valuation or estimation by qualified valuer. 15.5 After having examined the said report, it appears that in the facts of the case and having regard to the condition of the plant and machinery described by the valuer it is not possible for the Court to hold at this stage that the market price and realizable value of plant and machinery and fixtures and their valuation by the valuer was grossly inadequate, more particularly when the hard reality of the case is kept in focus viz. machinery was purchased in 1993 and the operation of the company remained closed before the order appointing OL as liquidator came to be passed and that therefore the plant and machinery also remained in unused and non-operational condition (which would obviously deteriorate their condition). In such circumstances, it is not possible to hold that the valuation and / or determination of reserved price was inadequate. In such circumstances, it is not possible to hold that the valuation and / or determination of reserved price was inadequate. 15.6 Moreover, in present case it is also relevant that though about 16 persons had visited and inspected the property in question and after inspection of the properties less than half of them i.e. only 6 persons submitted their bids and thereafter, during auction one of the said 6 bidders did not even come forward to participate in auction. At the time of auction any other bidder, including the applicant, did not come forward to participate in the auction process. 16. When all these aspects are collectively and cumulatively taken into consideration then it appears that in the facts and circumstances of the present case it is not possible to hold that reserved price was grossly inadequate. 16.1 Now, after having ascertained that it is not possible to hold that the reserved price can be said to be inadequate the next step is to ascertain as to whether price offered and received at the auction and approved / finalized by the Court at the auction can be said to be grossly inadequate. 16.2 On this count it is relevant to note that the reserved price was fixed at Rs.16,50,000/-whereas the highest price offered at auction is Rs.20,10,000/-Thus, the price offered and received at the auction is higher than the reserved price. Consequently, as a corollary it cannot be said that the price offered and received at the auction is grossly inadequate. 17. It is relevant to note that applicant herein has not placed any material on record to satisfactorily demonstrate that the valuation by the valuer and the reserved price are grossly inadequate. The applicant has merely come forward offering higher price. On the other hand the opponent has alleged that the applicant is proxy of one of the bidders who did not increase its offer at the auction and now the said bidder is trying to sabotage the sale confirmation in favour of the opponent. On this count there are allegation and counter allegation and therefore Court would not enter into said aspect. The fact remains that the applicant has not demonstrated satisfactorily that the property's valuation is grossly inadequate. 18. On this count there are allegation and counter allegation and therefore Court would not enter into said aspect. The fact remains that the applicant has not demonstrated satisfactorily that the property's valuation is grossly inadequate. 18. Under the circumstances, the primary and fundamental requirement which, in light of the observation by the Apex Court, in all decisions, consistently appear to be sine qua non is absent in present case. Differently put the paramount requirement viz. the price offered and received at the auction is, grossly inadequate is found to be absent, and is not available, in present case. 18.1 The applicant has failed to establish the said aspect. Actually, the applicant has not even expressly pleaded such case. Without such clear and specific assertion the applicant has merely offered higher price. 18.2 In view of this Court, higher offer made after confirmation of sale will not necessarily and automatically mean that reserved price determined on the basis of valuer's report is grossly inadequate and / or that the price received at the auction is grossly inadequate. 18.3 Once the Court reaches the conclusion that the two most relevant and important factors viz. (a) illegality or irregularity or fraud in sale process; and (b) grossly inadequate price, are absent then the request such as the applicant's request will have to be examined in light of the principle enunciated by the Apex Court which is consistently followed in all cases viz. mere higher offer, without anything more cannot be a good and valid ground to deconfirm and cancel the confirmed sale. 19. Relying on the observation “.....it is abundantly clear that the Court is the custodian of the interests of the Company and its creditors. Hence, it is the duty of the Court to see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud....” in the decisions Divya Manufacturing (supra) and the observations in the decision in case of FCS Software Solutions Ltd and Shraddha Aromatics (supra) Mr. Desai, learned Counsel for the applicant would submit that it is not always necessary that the applicant should demonstrate fraud or irregularity or illegality in the sale process. Desai, learned Counsel for the applicant would submit that it is not always necessary that the applicant should demonstrate fraud or irregularity or illegality in the sale process. 19.1 It is true that in the decision in case of Divya Manufacturing (supra) Hon'ble Apex Court observed that “ it is the duty of the court to see that price fetched at auction is adequate price even though there is no suggestion or irregularity or fraud....”, however, the observations which Mr. Desai, learned Counsel for the applicant emphasized have to be read in conjunction with and in light of the observations in the same decision i.e. the observation that ....when correct market value of the “ assets was not properly known to the Court and the sale was confirmed at grossly inadequate price, it was open to the Court to set it at naught in the interest of the company, its secured and unsecured creditors and the employees....”. 19.2 When the decision is read as a whole, it emerges that the decision explains that even in cases where there is no suggestion or allegation about irregularity or fraud the Court may cancel the confirmed sale but such course of action can be adopted only when it is conclusively demonstrated that the sale was made and confirmed at grossly inadequate price since correct market value of the assets was not properly known to the Court and that therefore it would be in the interest of the company, secured and unsecured creditors and the employees that the confirmed sale may be quashed so that correct and adequate price can be received. Thus, what emerges is the clear principle that in the cases where there is no allegation about fraud and where the sale is not infected by fraud, it would not be just and proper for the Court to cancel the confirmed sale unless and until it is satisfactorily established that the sale was effected at grossly inadequate price. The said criterion is a consistent and continuous thread which is passing thorough as a common factor in all decisions which are referred to hereinabove. 19.3 In this context, it would be appropriate to recall the observation by the Calcutta High Court wherein, the Court observed that:- “... The said criterion is a consistent and continuous thread which is passing thorough as a common factor in all decisions which are referred to hereinabove. 19.3 In this context, it would be appropriate to recall the observation by the Calcutta High Court wherein, the Court observed that:- “... merely because on second thoughts on the next day, the appellant came forward with an offer to pay more, there would be no justification, without more, to deconfirm the sale already made...” In the said decision the Court also observed that:- “.....However, the investment of such power does not mean that the Court should review and set aside an order confirming a sale which has already taken place merely because at a later stage on second thoughts someone, more particularly, an offeror who was outbidden, says that he is willing to pay more. Once the Court has come to the conclusion that the price offered is adequate and has confirmed the sale, the subsequent higher offer made under such circumstances, without anything more, cannot constitute a valid ground for interfering with the rights arising out of sale which has already been confirmed....” 19.4 Therefore, the paramount criterion for considering such request is as to whether the sale was confirmed at grossly inadequate price. 19.5 In all cases, except the cases where sale is demonstrably hit by fraud or similar illegality or irregularity, the Court has to pause, while considering the tempting offer for more amount and ask the question, whether the price offered and received at the auction / during sale process was grossly adequate. If the answer is negative then there would be hardly any room for interfering with confirmed sale. 19.6 At this stage, the Court would hasten to add that there could be an exception to the aforesaid position. In a given case fresh offer may be very high (i.e. the gap between the price accepted while confirming sale and the amount of fresh offer, may be so large) which would in itself demonstrate that the sale was confirmed at grossly inadequate price, then in such circumstance the Court, as custodian of the interest of the company, the creditors and the workmen and having regard to the duty to protect the interest of secured and unsecured creditors and workers, may, in appropriate case, interfere with confirmed sale and cancel the sale confirmation order. In such cases, the very quantum of the fresh offer itself would constitute satisfactory material to demonstrate that the price offered and received at the sale process was grossly inadequate and / or that the relevant aspects were not taken into account or that there was failure to apply mind to relevant facts and sale confirmation order was made and signed routinely. Such flaw, as observed in the decision in case of Kay Jay Industries, amounts to material irregularity and that would also establish that there is presence of both elements, irregularity and injury. 19.7 In the cases where before inviting bids the valuation of property is made by duly certified and expert persons such as government approved and registered valuer and on base of his estimation / valuation the reserved price is settled and thereafter offers are invited with clear stipulation that offer should not be lesser than the reserved price and sale is confirmed in favour of an offer which is higher than the reserved price and also highest amongst the offers made during the sale process, there would be little scope for interference with confirmed sale except in above mentioned two eventualities. 19.8 In present case after considering relevant material and details it is not possible to hold that the reserved price settled by the Court after taking into consideration valuer's report as well as the suggestion / recommendation by sale committee (comprising OL, representative of secured creditors) is grossly inadequate and when it has emerged from the facts and from the record that the price offered and received at the time of inter-se bidding is not less than the reserved price, the corollary would be that the sale price cannot be said to be grossly inadequate. Thus, in present case on one hand there is complete absence of any allegation or suggestion about illegality or irregularity or fraud in the sale process. Even the applicant has not made such allegation. On the other hand it has emerged that it is not possible to hold that the reserved price determined on the basis of report by government approved / registered valuer is grossly inadequate. Even the applicant has not claimed and established that reserved price and / or sale price are “grossly inadequate”. Even the applicant has not made such allegation. On the other hand it has emerged that it is not possible to hold that the reserved price determined on the basis of report by government approved / registered valuer is grossly inadequate. Even the applicant has not claimed and established that reserved price and / or sale price are “grossly inadequate”. In such circumstances it would not be proper and just for the Court to cancel confirmed sale more particularly when the offer for higher price is made i.e. almost 40 days after the order confirming sale came to be passed and thereafter the successful bidder has deposited / paid the entire sale price. 19.9 It is true that physical possession of the property in question is not handed over to the successful bidder by OL however, in view of the observations by Apex Court in case of Valji Khimji (supra), the sale / contract in present case can be said to be concluded. In this context it is appropriate to refer to the observations by the Apex Court in case of Valji Khimji (supra) which read thus:- “29. In the present case we are satisfied that there is no fraud in the auction sale. It may be mentioned that auctions are of two types - (1) where the auction is not subject to subsequent confirmation, and (2) where the auction is subject to subsequent confirmation by some authority after the auction is held. 30. In the first case mentioned above, i.e. where the auction is not subject to confirmation by any authority, the auction is complete on the fall of the hammer, and certain rights accrue in favour of the auction-purchaser. However, where the auction is subject to subsequent confirmation by some authority (under a statute or terms of the auction) the auction is not complete and no rights accrue until the sale is confirmed by the said authority. Once, however, the sale is confirmed by that authority, certain rights accrue in favour of the auction-purchaser, and these rights cannot be extinguished except in exceptional cases such as fraud.” 19.10 In view of the said observation the sale in favour of successful bidder has to be treated as concluded sale / contract. In such circumstances the Court cannot overlook or ignore rights of a party to a conclude contract and / or Court's obligation to maintain sanctity of concluded contract. In such circumstances the Court cannot overlook or ignore rights of a party to a conclude contract and / or Court's obligation to maintain sanctity of concluded contract. 19.11 However, when the sale is neither vitiated by fraud nor it is established that the sale was effected at grossly inadequate price, then the Court would not be justified in cancelling confirmed sale and concluded contract merely because someone has subsequently come forward with higher offer and at relevant time he / it, without any justification, did not participate in the sale process. If the Court starts setting aside confirmed sale in such cases also then not only the sanctity of concluded contract would be lost but the very bases and foundation of sale by the Court will be shaken and the trust of the bidders to come forward and participate in sale by Court will also be shaken, if not completely lost. The entire process would get paralyzed. 19.12 At this stage it is relevant to recall that at the initial stage of hearing learned counsel for the opponent No.2 i.e. successful bidder had stipulated before the Court that opponent No.2 will match the offer of the applicant. In pursuance of the said stipulation Mr.Rao, learned Counsel for the opponent No.2 again reiterated that the opponent No.2 will match the said applicant's offer and shall pay same price. In view of the said stipulation by the opponent, interest of the creditors, secured as well as unsecured and the workmen will be served. 20. In this background, when the above mentioned observations by Hon'ble Apex Court that mere offer of higher price, without anything more, cannot be the criterion and basis to de-confirm a confirmed sale, are applied to the facts of present case (wherein the only basis on which the applicant has preferred this application is that he offers higher price) is applied in present case then it leads to the inevitable conclusion that this is not a case wherein the confirmed sale should be and can be deconfirmed and the sale confirmation order can be recalled and cancelled. 21. 21. At this stage, it is relevant to mention that vide order dated 25.9.2013 the Court observed that the applicant has kept his last offer close to his chest and until the said order was passed and even until 6.10.2013, the applicant did not come forward with any offer higher than the amount mentioned in the application and it was only on 7.10.2013 i.e. after the Court made above observation in the order dated 25.9.2013 that Mr.Desai, learned advocate for the applicant made his last offer which is higher by Rs.2 lakh i.e. the applicant has offered Rs.32 lakh. Mr. Rao, learned advocate for the opponent, though reluctantly, however in pursuance of and to abide by his earlier stipulation, agreed to match the said price. 22. In the result and for the foregoing discussion and reasons the request-submission made by the applicant is not accepted and the application is rejected. 23. In compliance of its stipulation, the opponent No.2 shall deposit further amount of Rs. 12 lacs. The opponent No.2 is granted time of 2 weeks to deposit balance amount of Rs.12 lakh. After the said amount is deposited, the other procedure may be completed by the Official Liquidator. 24. In view of the submissions made by opponent No.2 and the learned advocates for the Official Liquidator, and secured creditor the cost of this application is quantified at Rs.25,000/-which shall be paid by the applicant by permitting OL to adjust the cost from the deposited amount. 25. Mr. Desai, learned advocate for the applicant has requested that the amount deposited by the applicant may be returned to the applicant. After the applicant makes written request to OL the balance amount may be returned by the Official Liquidator to the applicant on or before 9.10.2013. 26. In view of the foregoing discussion and in light of the above discussed reasons, present application is not accepted and is hereby rejected with the aforesaid clarification. Orders accordingly. (RRP) (Application rejected)