JUDGMENT Hon’ble Surya Prakash Kesarwani, J.—Heard Sri J. Nagar, Senior Advocate, assisted by Sri Prateek J. Nagar, learned counsel for M/s. Cosmos Technologies, Post Office Renuekoot, District Sonbhadra on Application No. 269043 of 2014 filed under Rule 6 and Rule 9 of the Companies (Courts) Rules, 1959. In the application, the applicant has prayed to recall the order dated 30th July, 2014 and permit the applicant to bid for sale of plant and machinery of the company (In liquidation). In paragraph No. 2, 3, 4 and 5 of the affidavit accompanying the said publication, the applicant has stated as under : “2. That the Hon’ble Court by its order dated 30.7.2014 was pleased to sell plant and machinery of the company (In Liquidation) to M/s. Star Trading Company for a sum of Rs. 97,00,000/- (Rupees Ninety-Seven Lacs). 3. That the applicant is prepared to purchase the plant and machinery for a sum of Rs. 1,10,00,000/- (Rupees One Crore and then lacs). In order to prove its bona fide, the applicant -company is depositing with the Official Liquidator a sum of Rs. 25,00,000/- (Rupees Twenty Five Lacs) by Demand Draft No. 978038 dated 14.8.2014, drawn in favour of the Official Liquidator, U.P., Allahabad, on the State Bank of India. 4. That the price offered by the applicant is higher than the price offered by M/s. Star Trading Company. Further, the applicant is prepared to deposit the balance amount of Rs. 85,00,000/- (Rupees Eighty-Five Lacs) within three days from the acceptance of his offer. 5. That it is expedient in the ends of justice that the Hon’ble Court be pleased to recall its order dated 30.7.2014 and permit the applicant to bid for sale of plant and machinery of the company, Alfa Springs Limited (In liquidation) and for this act of kindness the applicant as is duty bound shall always pray.” 2. Sri J. Nagar, Senior Advocate, assisted by Sri Prateek J. Nagar, learned counsel for M/s. Cosmos Technologies has produced in Original the Bank Draft No. 978038, dated 14th August, 2014, of Rs. 25,00,000/- of State Bank of India, Renukoot Branch drawn on Allahabad Branch. Sri J. Nagar, Senior Advocate states that the applicant undertakes to offer a minimum of Rs. 1,10,00,000/- for Lot-B in respect of which auction took place on 16th July, 2014 and in which the bid of M/s. Star Trading Company for Rs. 25,00,000/- of State Bank of India, Renukoot Branch drawn on Allahabad Branch. Sri J. Nagar, Senior Advocate states that the applicant undertakes to offer a minimum of Rs. 1,10,00,000/- for Lot-B in respect of which auction took place on 16th July, 2014 and in which the bid of M/s. Star Trading Company for Rs. 97,00,000/- was found to be highest. He states that the applicant undertakes to deposit remaining Rs. 85,00,000/- of his minimum offer during the course of day failing which the aforesaid amount of Rs. 25,00,000/- of the aforesaid bank draft may be forfeited. He further states that the applicant undertakes to offer minimum bid of Rs. 1,10,00,000/- and in case the applicant either does not participate or does not make minimum offer of Rs. 1,10,00,000/- then the entire money of Rs. 1,10,00,000/- deposited by the applicant to show his bona fide, may be forfeited for which the applicant shall have no objection of any kind whatsoever. 3. In support of his submission, he relies upon an order dated 6.9.2011 passed by this Court in Company Petition No. 44 of 1999 in the matter of M/s. Rajendra Steel Limited in which after bidding took place and the highest bidder had deposited the entire amount a application was submitted by M/s. Pearless Consultancy Services Pvt. Ltd. through Shri N.R. Bachhawa making offer of Rs. 15,05,15,000/- as against the highest bid of Rs. 13.10 crore. The increase made in the said offer/application by Sr. R.N. Bachhawa was about 13%. On these facts, this Court observed and allowed the bidding between Sri N.R. Bachhawa and the highest bidder after observing as under : “Reference orders dated 15.7.2011 and 20.8.2011, the highest bid of M/s. Aslina Builders & Developer Pvt. Ltd., of Rs. 13.30 crores for Lot No. II (Industrial leasehold land of M.I.D.C. Plot No. 17, Road No. 9, MIDC, Roral Andheri (E), Mumbai area 1000 square meters and building constructed thereon) as against the reserved price of Rs. 12.62 crores, was accepted in the competitive bidding in which out of eight initial bidders, two parties, namely M/s. Westin Construction Pvt. Ltd and M/s. Aslina Builders & Developer Pvt. Ltd. participated. After adjusting the earnest money, the entire amount was to be deposited within 90 days. M/s. Aslina Builders & Developer Pvt. Ltd. deposited the entire balance amount upto 9.8.2011. After adjusting the earnest money, the entire amount was to be deposited within 90 days. M/s. Aslina Builders & Developer Pvt. Ltd. deposited the entire balance amount upto 9.8.2011. Shri N.R. Bachhawat, appearing through Shri Anil Kumar Mehrotra made an application dated 27.7.2011, alongwith demand draft dated 21.7.2011 of Rs. 31, 550, 000/- and made an offer of Rs. 15, 05, 51,000/-. The offer was received before the highest bidder had deposited the balance amount. The Court found that ordinarily such offer, after the highest bid has been accepted, should not be entertained, but that the Court is also required to protect the interest of the stakeholders in the company (in liquidation), and should endeavour to obtain the best price. The Court thus gave an opportunity to Shri N.R. Bachhawat, to deposit the entire offered amount, to consider the bona fides of the offer. Shri Ashok Mehta, learned counsel appearing for Official Liquidator informs that Shri N.R. Bachhawat representing Pearless Consultancy Services Pvt. Ltd has, in pursuance to the opportunity given by the Court on 20.8.2011, has deposited a demand draft No. 266636 dated 3.9.2011 for Rs. 119,001,000.00 in favour of Official Liquidator, U.P. & Uttrakhand in the account of M/s. Rajendra Steels Ltd (in liquidation) drawn at Standard Chartered Bank. Shri Ashok Mehta appearing for Official Liquidator states that the draft has been received. Shri A.K. Gaur has entered appearance on behalf of M/s. Aslina Builders & Developer Pvt. Ltd., Mumbai. He has raised an objection to the offer made by Shri N.R. Bachhawat. He submits that once the highest bid of M/s. Aslina Builders & Developer Pvt. Ltd. was accepted and the entire amount of the bid of Rs. 13.30 crores was deposited, the Court should not entertain the offer of Shri N.R. Bachhawat. Every one was given an opportunity to participate in the auction proceedings. The confidence of the sale conducted by the Court and sanctity of the proceedings will be affected, if the offer is accepted, after the entire amount is deposited by the highest bidder. There must be some end to the bidding process. As observed in the order dated 20.8.2011, though ordinarily the order accepting the highest bid should not be disturbed as it may cause financial implication to the highest bidder, the Court is under statutory duty to obtain the best price of the asset of the company. There must be some end to the bidding process. As observed in the order dated 20.8.2011, though ordinarily the order accepting the highest bid should not be disturbed as it may cause financial implication to the highest bidder, the Court is under statutory duty to obtain the best price of the asset of the company. In this case since the bid of Shri N.R. Bachhawat is 13% more than the highest bid accepted by the Court, and that the entire amount has been deposited showing his bona fides, it will be appropriate that the property be put to competitive bidding between M/s. Aslina Builders & Developer Pvt. Ltd. and Shri N.R. Bachhawat. Shri A.K. Gaur, learned counsel appearing for M/s. Aslina Builders & Developer Pvt. Ltd. states that his client is prepared to offer an amount higher than the amount offered by Shri N.R. Bachhawat. Shri Santosh Kumar Srivastava appearing for M/s. Westin Construction Pvt. Ltd. states that his client had participated in the competitive bidding on 15.7.2011. He is now prepared to offer Rs. 15.10 crores for the property. M/s. Westin Construction Pvt. Ltd. has withdrawn the earnest money and thus its offer cannot be entertained by the Court. Let the matter be fixed again on 15.9.2011 at 03.00 PM for bidding between M/s. Aslina Builders & Developer Pvt. Ltd. and Shri N.R. Bachhawat in chambers.” 4. Sri Imran Ullah appearing on behalf of the highest bidder M/s. Star Trading Company, proprietor Sri Mohd. Yameen submits that the advertisement was published for auction sale of property in question of the company (in liquidation) in daily newspapers on 27th/28th May, 2014. Pursuant to the said tender notice, the highest bidder inspected the factory premises of the company (in liquidation) on 16th June, 2014. He submitted tender on 30th June, 2014 alongwith a Bank draft of Rs. 17,50,000/- towards earnest money and made offer of Rs. 81,00,000/-. On 16th July, 2014 bidding took place and the offer was increased by him to Rs. 97,00,000/- which was found to be the highest bid. He deposited the balance amount of Rs. 79,50,000/- in August, 2014. Thus, entire amount stands deposited. In the objection dated 27th August, 2014 filed against the application of M/s. Cosmos Technologies, it is stated in paragraph No. 13 that the application of M/s. Cosmos Technologies is nothing but an effort in collusion with others to frustrate his claim. He deposited the balance amount of Rs. 79,50,000/- in August, 2014. Thus, entire amount stands deposited. In the objection dated 27th August, 2014 filed against the application of M/s. Cosmos Technologies, it is stated in paragraph No. 13 that the application of M/s. Cosmos Technologies is nothing but an effort in collusion with others to frustrate his claim. In paragraph No. 14, it is stated that the application of M/s. Cosmos Technologies is likely to be dismissed by this Court on the ground that he had not mentioned in his application as to why he could not participate in the auction proceeding earlier and what prompted him to give an application at the time when everything has been finalized. In paragraph No. 18, it is alleged that the oblique motive of M/s. Cosmos Technologies is also evident from the fact that instead of depositing the entire desired amount i.e. Rs. 1,10,00,000/- before this Court, he has only deposited Rs. 25,00,000/- through bank draft. Which also give reasons to the deponent to believe that the same is only to abuse the process. 5. Sri Imran Ullah submits that after the highest bid, amount has been deposited by the bidder, the process of auction cannot be disturbed at the instance of the applicant i.e. M/s. Cosmos Technologies. In support of his submission, he relied upon the judgment of Hon’ble Supreme Court in the case of M/s. Valji Khimji and Company v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and others, (2008) 9 SCC 299 . 6. Sri Om Prakash, learned counsel for the Official Liquidator has drawn attention of this Court to the O.L. Report (Judicial) 238/2014, wherein it is mentioned that as directed by this Court vide order dated 20th August, 2014 the highest bidder M/s. Star Trading Company, Kanpur has been informed to appear on 27th August, 2014. It is mentioned in paragraph No. 4 of the report that the O.L. has received, a copy of application dated 14th August, 2014 filed on behalf of M/s. Cosmos Technologies that the applicant is prepared to purchase the plant and machinery for a sum of Rs. 1,10,00,000/- and that he is ready to deposit the balance amount of Rs. 85,00,000/- within three days from the acceptance of his offer. 7. 1,10,00,000/- and that he is ready to deposit the balance amount of Rs. 85,00,000/- within three days from the acceptance of his offer. 7. He submits that the auction sale in question has not been confirmed as yet, and therefore, to protect the interest of the stake holders of the company (in liquidation) an endevour should be made to obtain best price. He submits that the offer made by the M/s. Cosmos Technologies is about 13% higher than the amount offered by the highest bidder and to show his bona fide, M/s. Cosmos Technologies has deposited today in Court the bank draft of Rs. 25,00,000/- in original and has also undertaken to deposit remaining amount Rs. 85,00,000/- of the minimum offer of Rs. 1,10,00,000/-, during the course of day failing which the amount of Rs. 25,00,000/- may be forfeited, for which they shall have no objection. He further submits that the said M/s. Cosmos Technologies has also offered today through his counsel before this Court that in case M/s. Cosmos Technologies either do not participate in the bidding or do not offer the minimum of Rs. 1,10,00,000/- for Lot -B then the entire amount deposited by him i.e. Rs. 1,10,00,000/- be forfeited for which he shall have no objection at all of any kind. 8. He, therefore, submits that reserving minimum price of Lot-B of Rs. 1,10,00,000/- and treating the application of the applicant M/s. Cosmos Technologies to be his offer, a fresh auction notice may be permitted to be published and bidding may be allowed to take place so as to obtain the best price for Lot-B. He submits that under the circumstances, the sale may not be confirmed. 9. I have carefully considered the submission of learned counsel for the parties. 10. Pursuant to the order of this Court dated 14th May, 2014, notices inviting tenders were published in daily newspapers, namely, “Dainik Jagran (Hindi Edition, Kanpur)”, and “Times of India (English Edition, Kanpur)” on 28th and 27th May, 2014. Inspection of the property was allowed to the prospective bidder on 16th and 17th June, 2014. Eleven persons inspected the factory premises of the company (in liquidation), 14 tenders forms were obtained by prospective bidders. Ten envelopes of tender forms of the interested parties were received till the last date of receipt of tender i.e. 30th June, 2014. Inspection of the property was allowed to the prospective bidder on 16th and 17th June, 2014. Eleven persons inspected the factory premises of the company (in liquidation), 14 tenders forms were obtained by prospective bidders. Ten envelopes of tender forms of the interested parties were received till the last date of receipt of tender i.e. 30th June, 2014. As per schedule, the offers received in sealed cover were opened on 16th July, 2014. In the process of bid, the highest price as per tender was Rs. 81,00,000/- of M/s. Star Trading Company for Lot-B, who subsequently increased the bid during the course of bidding process to Rs. 97,00,000/-. As per bid sheet prepared on that date; the offer was increased only by M/s. Star Trading Company out of ten bidders. 11. Under the circumstance, vide order dated 16th July, 2014, this Court directed to obtain comments of all the secured creditors with regard to highest bid of Lot-B of Rs. 97,00,000/- of M/s. Star Trading Company. vide order dated 23rd July, 2014, this Court again granted time to the secured creditors, namely, U.P.F.C., PICUP and Canara Bank to file their comments in compliance to the order dated 16th July, 2014. On 30th July, 2014, the secured creditors, namely, PICUP and Canara Bank have filed their comments. However, the secured creditors U.P.F.C. has not filed its comments. Under the circumstances, the Official Liquidator was directed to proceed with the matter in accordance with law and as per the terms and conditions of the tender. The matter was directed to be listed after two months or immediately after deposit of the bid amount by the highest bidder, M/s. Star Trading Company, Kanpur. The facts of the case and various orders dated 16th July, 2014, 23rd July, 2014 and 30th July, 2014 clearly shows that the auction sale in question has not been confirmed so far. However, in the mean time, an application No. 269043of 2014 has been moved by M/s. Cosmos Technologies represented by the Senior counsel Sri J. Ngar assisted by Sri Prateek J. Nagar advocate. This application was moved on 16th August, 2014, the matter could not be considered due to illness slip of Sri Shubham Agarwal, learned counsel for the Official Liquidator. The matter was directed to be listed on 3rd September, 2014 i.e. today. 12. This application was moved on 16th August, 2014, the matter could not be considered due to illness slip of Sri Shubham Agarwal, learned counsel for the Official Liquidator. The matter was directed to be listed on 3rd September, 2014 i.e. today. 12. Judgment of Hon’ble Supreme Court in case of M/s. Valji Khimji and Company v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and others, is distinguishable on the facts of the present case, inasmuch as in the present set of facts the sale has not been confirmed while in the said case the sale was confirmed. In the aforesaid case of M/s. Valji Khimji and Company (supra), Hon’ble Supreme Court observed in paragraph No. 11, 28 and 35 as under : “11. It may be noted that the auction sale was done after adequate publicity in well-known newspapers. Hence, if any one wanted to make a bid in the auction he should have participated in the said auction and made his bid. Moreover even after the auction the sale was confirmed by the High Court only on 30.7.2003, and any objection to the sale could have been filed prior to that date. However, in our opinion, entertaining objections after the sale is confirmed should not ordinarily be allowed, except on very limited grounds like fraud, otherwise no auction sale will ever be complete. 28. The facts of the case were that at the initial stage the appellant offered 37 lakhs for purchasing the property in question. At the intervention of the Court the price was raised to 1.3 crores, and ultimately it was found that the property could be sold for Rs. 2 crores. It was on these facts that this Court held that even after confirmation of the sale the same could be set aside. 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. 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.” 13. This supports the view that until the sale is confirmed, no rights accrue to a bidder. 14. During the course of hearing, Sri J. Nagar, learned Senior Counsel, assisted by Sri Prateek J. Nagar has produced in original manager’s cheque No. 004695 dated 3rd September, 2014 for Rs. 85,00,000/- of HDFC Bank Ltd., Allahabad. He states that this is a banker’s cheque. Thus, to show his bona fide M/s. Cosmos Technologies has submitted before this Court a bank draft of Rs. 25,00,000/- and manager’s cheque of Rs. 85,00,000/- total Rs. 1,10,00,000/- which is accepted in terms of their undertaking that they shall submit minimum offer of Rs. 1,10,00,000/- for Lot-B of the company (in liquidation) and if they either fail to submit an offer or do not make minimum offer of Rs. 1,10,00,000/- then the entire amount of Rs. 1,10,00,000/- consisting of the aforesaid bank draft and the manager’s cheques shall stand forfeited. The aforesaid bank draft of Rs. 25,00,000/- and the manager’s cheque of Rs. 85,00,000/- have been handed over in original to the Official Liquidator to deposit in the Bank account. 15. Normally, after the highest bid, an offer for increased amount may not be entertained. But looking into the entirety of the facts and circumstances of the case and also that higher minimum offer of Rs. 1,10,00,000/- within a month of bidding; alongwith bank draft and manager’s cheques for the entire amount has been submitted with an undertaking as recorded herein above this Court may considers it appropriate to recall the earlier order dated 30th July, 2014 and directs the Official Liquidator to make a fresh advertisement inviting tenders for sale of plant and machinery (Lot-B) of the company (in liquidation) fixing minimum reserved price of Rs. 1,10,00,000/- and earnest money of 25% and on usual terms and conditions and also to invite tender for Lot-A with minimum reserved price of Rs. 1,53,98,000/-. 1,10,00,000/- and earnest money of 25% and on usual terms and conditions and also to invite tender for Lot-A with minimum reserved price of Rs. 1,53,98,000/-. The advertisement shall be published in two newspapers, namely, “Dainik Jagran (Hindi Edition)”, and “Times of India (English Edition)”, both published from Kanpur on or before by 8th September, 2014. Inspection of the aforesaid Lot A and B may be permitted by the Official Liquidator on 20th/21st September, 2014. The last date for submission of tender forms shall be 30th September, 2014 and the tender shall be opened in chamber on 8th October, 2014. 16. Sri Imran Ullah appearing on behalf of the highest bidder, M/s. Star Trading Company prays that the entire money deposited by them i.e. Rs. 97,00,000/- be returned to them as the said highest bidder wants to withdraw his bid. Prayer is accepted. Official Liquidator is directed to return the entire amount deposited by M/s. Star Trading Company within a week from today. 17. The application No. 269403/2014 submitted by M/s. Cosmos Technologies, the objection dated 27th August, 2014 filed by M/s. Star Trading Company and the O.L. Report (Judicial) No. 238 of 2014 are disposed of. —————