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IN THE MATTER OF M/S CHAMPARAN SUGAR COMPANY LTD

High Court of Judicature at Allahabad

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In The Matter Of M/S Champaran Sugar Company Ltd - MISC. COMPANY APPLICATION No. 2 of 1993 [2007] RD-AH 11699 (11 July 2007)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

In Chambers

Misc. Company Application No. 2 of 1993

In the matter of Champaran Sugar Co. Ltd.

(in liquidation)

Hon. S.P. Mehrotra, J.

Pursuant to the order dated 23.5.2007, the case is listed today. The said order dated 23.5.2007 is reproduced below:

"Pursuant to the order dated 21.5.2007 passed by a Division Bench of this Court in Special Appeal No. 232 of 2007 read with the order dated 22.5.2007 passed in the said Special Appeal, the matter has been placed before this Court.

By the said order dated 21.5.2007, the Division Bench has, interalia, directed as under:

"In view of the above discussion, the impugned order dated 12.2.2007 can not be sustained. There was no good ground for canceling the accepted bid of the appellant. Consequently there was no occasion to re-value or re-advertise the property. The fact that after six years somebody was making a higher offer was not sufficient, in absence of such reservation of power in the 'terms and conditions of sale', to warrant cancellation of the appellant's bid. Further, the departure from the original payment schedule, in making deposit of sale consideration was not because of any fault on part of the appellant but, because of the stay orders passed in special appeals which remained pending for almost six long years. The short delay between the dismissal of the special appeals and the deposit is also not sufficient for canceling the appellant's bid. That short delay can be compensated by ordering the appellant to pay interest at the rate of 10 per cent per annum from the date on which the special appeals were dismissed till the date on which the impugned order was passed i.e. 12-2-2007, and thereafter from the date on which, pursuant to this decision, the learned Company Judge passes the order permitting deposit of the balance till the date on which actual payment is made by the appellant. The rate of interest has been fixed on the criteria that if payment had been received by the Official Liquidator on the due date i.e. 5-12-2006, this rate is roughly the rate at which he would have earned interest from the bank deposit pending disbursement of the deposit to creditors. It is clarified that the interest will cease to be payable on any part amount deposited, as from the date of the deposit. The period after 12-2-2007 has been excluded from interest liability because non-deposit after that date would be attributable to the impugned order and would not be attributable to the appellant.

 

Thus the interest would be payable @ 10% on the amount of Rs. 1.5 crore from 5-12-2006 up to 9.2.2007 i.e. the date on which that amount was deposited with the Liquidator. Interest at the same rate would also be payable on the remaining sale consideration of Rs. 3 crore 40 lac {i.e. Rs. 5 crores as reduced by (i) the earnest money of Rs. 10 lacs and (ii) the deposited amount of Rs. 1.5 crore} from 5-12-2006 up to 12-2-2007, i.e. the date of the impugned order, and thereafter again from the date of the next order of the Company Judge permitting such deposit of the balance upto the date of its actual deposit.

We are not fixing the payment time schedule here because summer vacations are very close, the availability of the learned Company Judge during vacations is not known, and we were informed that the case is tied up with the Hon'ble Judge who passed the impugned order. We do not think it would be just to compel the appellant to make the entire deposit and then to make him wait unduly long even for possession of the property for which he has made full payment. Further, we are of the opinion that finalising the sale is beyond the scope of this special appeal, and more so when we have not even heard arguments from that point of view. However, we may suggest that it will be open to the learned Company Judge to consider, having regard to the delay which has already taken place as also the ensuing vacations, while fixing the time for payment of the balance, as to whether the order should include a direction to the Liquidator to deliver possession after the full payment is credited to the Liquidator's bank account, without waiting for the formalities of sale-confirmation and sale-deed/sale-certificate, which formalities can be completed later. This suggestion will not be interpreted to mean that the learned Company Judge is bound to go ahead with the sale even if there is any other legally valid ground to refuse such relief.

Order:

In the circumstances, this appeal is allowed. The impugned order dated 12.2.2007 is set aside. All relevant parties are represented in this appeal, and they are put to notice that the office is being hereby directed to place the matter before the learned Company Judge again for appropriate orders on 23.5.2007 or on the next date of his availability thereafter, if the learned Judge is not available on 23-5-2007. Certified copy of this order be issued, on application and payment of requisite charges, today."

Civil Misc. Application No.........of 2007 has been filed today on behalf of Vishnukant Gupta (applicant), who had filed the aforesaid Special Appeal.

Registry is directed to give appropriate number to the said application.

Copy of the said Application has been served on Shri Anjani Kumar Mishra, learned counsel for the Official Liquidator. Let copy of the said Application be also served on Shri O.P. Misra, learned counsel for the Secured Creditors within 24 hours.

The following prayers have been made in the said Application:

"(i) To allow one month's time to the applicant to pay to/ deposit with the official liquidator, the balance sale price of Rs. 3 Corers 40 Lacs together with interest thereon @ Rs. 10% p.a. w.e.f. 05.12.2006 upto 12.02.2007 along with further amount of interest @ c 10% p.a. on the already paid amount of Rs. 1.5 Crorers w.e.f. 05.12.2007 to 09.02.2007.

(ii) To directed the official liquidator to accept the aforesaid payments as and when made within the time allowed by this Hon'ble Court.

(iii)To further direct the official liquidator to deliver possession of the sold unit i.e. Bara Chakia Unit of the Champaran Sugar Co. Ltd.(Company under liquidation) to the applicant after the full payment is credited to the liquidator's Bank account without waiting for the formalities of sale confirmation and sale deed/sale certificate, which formalities may be completed later.

(iv) To pass such other or further order as this Hon'ble Court may deem fit and proper in the facts and circumstances of this case."

Having regard to the averments made in the said Application and its accompanying affidavit, and having considered the submissions made by Shri Chhotey Lal Pandey, learned Senior Counsel assisted by Shri P.C. Jain, learned counsel for the applicant (Vishnukant Gupta), and Shri Ashok Mehta, learned counsel for the Official Liquidator, and keeping in view the directions given by the Division Bench in its aforesaid order dated 21.5.2007, I am of the opinion that while the question of confirmation of sale is still pending consideration, one month's time, as prayed for in prayer no.(i) in the aforesaid Application, may be granted for making deposit as per the directions given in the  said order dated 21.5.2007, and further, the applicant (Vishnukant Gupta)be made liable to deposit interest with effect from today till the date of actual deposit with the Official Liquidator, as per the directions given in the said order dated 21.5.2007.

Accordingly, while the question of confirmation of sale is still pending consideration, the applicant (Vishnukant Gupta) is granted one month's time for making deposit as per the directions given in the said order dated 21.5.2007 passed by the Division Bench in the aforesaid Special Appeal No. 232 of 2007. While making the deposit, the applicant (Vishnukant Gupta)will further deposit interest with effect from today till the date of deposit, as per the directions given in the said order dated 21.5.2007.

As the applicant (Vishnukant Gupta) himself has prayed for time for making deposit, as mentioned above, other prayers made in the aforesaid Application will be considered on the next date fixed in this case.

List this case in Chambers on 11.7.2007."

The Official Liquidator has submitted today his Report being Report No. 182 of 2007.

It is, interalia, stated in the said Report that in compliance with the order dated 23.5.2007 passed by the Company Judge as also the order dated 21.5.2007 passed by the Division Bench in Special Appeal No. 232 of 2007, the said Vishnu Kant Gupta (purchaser) has deposited with the Office of the Official Liquidator an amount of Rs. 5,00,00,000/- (Rupees Five Crores) against the sale consideration from time to time and finally on 5.6.2007 including the earnest money of Rs. 10,40,000/- (Rupees Ten Lacs and Forty Thousand), which was already paid against the earnest money.

It is, interalia, further stated in the said Report  that the said Vishnu Kant Gupta (purchaser) has paid Rs. 10,40,000/- against the amount of interest calculated in terms of the order dated 23.5.2007.

It is, interalia, further stated in the said Report that thus, the total amount of sale consideration alongwith interest as stipulated in the aforesaid orders has since been paid.

Prayer is made in the said Report for considering the matter of confirmation of sale of land and building and plant & machinery etc. (Unit as a whole) of Bara Chakia of M/s Champaran Sugar Mills Limited (in liquidation) in favour of the said Vishnu Kant Gupta (purchaser).

Civil Misc. Application No. 149927 of 2007 has been filed today on behalf of the said Vishnu Kant Gupta (purchaser), interalia, praying that the title of Bara Chakia Unit of M/s Champaran Sugar Mills Limited (in liquidation) be transferred to the said Vishnu Kant Gupta (purchaser) (applicant in the said Application) by execution of an appropriate transfer deed, and further direction for delivery of actual physical possession of the said Unit to the said Vishnu Kant Gupta (purchaser) forthwith be also given.

The said Application is accompanied by an affidavit, sworn by the said Vishnu Kant Gupta on 4.7.2007.

It is, interalia, stated in the said affidavit that by the order dated 23.5.2007, the Company Judge allowed one month's time to the said Vishnu Kant Gupta (purchaser) to make deposits, as per the directions of the Division Bench in Special Appeal No. 232 of 2007 vide judgment dated 21.5.2007; and that accordingly, on 5.6.2007, the said Vishnu Kant Gupta (purchaser) has paid to the Official Liquidator the entire amount, i.e., Rs. 3,50,40,000/- towards the balance bid money and interest thereon with effect from 21.5.2007.

Copies of the receipts dated 5.6.2007 issued by the Official Liquidator have been filed as Annexure-1 to the said affidavit.

In the order dated 21.5.2007, passed by the Division Bench in the said Special Appeal No. 232 of 2007, the Division Bench noticed as under:

".............Before the said period of three months, fixed for the payment of first installment, could expire on 30.4.2001, two Special Appeals were filed. They were (i) Special Appeal No. 153 of 2001, M/s Hanuman Industries (India) Pvt. Ltd. Versus Official Liquidator; and (ii) Special Appeal No. 195 of 2001 M/s. N.N.P. Trading versus Official Liquidator. In those appeals by interim orders dated 7.2.2001 and 13.3.2001, the Appellate Bench stayed the operation of the order of the Company Judge dated 31.1.2001 quoted above.

Both the special appeals aforesaid were dismissed for want of prosecution on 5.12.2006 and the stay orders were discharged. ........"

Today, an Application has been filed on behalf of the aforementioned M/s Hanuman Sugar Industries  Limited through Shri Anurag Asthana, Advocate.

The said Application is accompanied by an affidavit, sworn on 11.7.2007 by Nankoo Prasad Pandey, stated to be the Principal Officer of M/s Hanuman Sugar Industries Limited.

It is, interalia, stated in the said affidavit that  the aforementioned Special Appeal No.153 of 2001 and the aforementioned Special Appeal No. 195 of 2001 were filed against the order dated 31.1.2001; and that one of the Counsel, who was appearing on behalf of the appellant in the said Special Appeals, has been elevated to the Bench of this Court while the other Counsel, who was appearing on behalf of the appellant in the said Special Appeals, belongs to Delhi; and that in the circumstances, the said Special Appeals were dismissed in default for non-appearance; and that the said Counsel, who belongs to Delhi, has come to know about the dismissal of the said Special Appeals when she came for giving appearance in another matter.

It is, interalia, further stated in the said affidavit that Restoration Application has been filed in the said Special Appeals, and the same is pending.

Shri O.P. Mishra, learned counsel for IFCI Ltd., IDBI and ICICI Bank Ltd. has produced before the Court a Communication dated 5.7.2007 received by him from IFCI Ltd., interalia, stating that it has been decided in the joint meeting of the Institutions/ Bank held on 29.6.2007 that SLP has to be filed by the Institutions before the Supreme Court against the said order dated 21.5.2007 passed by the Division Bench in the said Special Appeal No. 232 of 2007.

I have heard Shri C.L. Pandey, learned Senior Counsel assisted by Shri P.C. Jain, learned counsel for the said Vishnu Kant Gupta (purchaser), Shri Ashok Mehta, learned counsel for the Official Liquidator, Shri O.P. Mishra, learned counsel for IFCI Ltd., IDBI and ICICI Bank Ltd. and Shri Anurag Asthana, learned counsel for the said M/s Hanuman Sugar Industries Limited, and perused the record.

It is submitted by Shri Anurag Asthana that  Restoration Applications have been filed in the aforesaid Special Appeal No. 195 of 2001 and Special Appeal No. 153 of 2001, and the said Restoration Applications are coming up before the Division Bench on 12.7.2007 for consideration.

It is further submitted by Shri Asthana that on account of the circumstances narrated in the aforementioned Application and its accompanying affidavit, filed today on behalf of M/s Hanuman Sugar Industries Limited, appearance could not be made in the said Special Appeals on 5.12.2006 when the said Special Appeals were dismissed in default for non-appearance. It is further submitted that the knowledge regarding the dismissal of the said Special Appeals in default was received by Ms. Geeta Luthra, who was appearing as the learned counsel for the appellant in the said Special Appeals, only in the end of the month of May, 2007, and the Restoration Applications have been filed on 6.7.2007 immediately after the reopening of the High Court after summer vacation.

It is submitted by Shri Anurag Asthana that in the circumstances, the matter regarding confirmation of sale may be postponed for a reasonable period so that in the meantime, suitable orders may be passed by the Division Bench in respect of the Restoration Applications filed in the aforementioned Special Appeals.

Shri O.P. Mishra, learned counsel for IFCI Ltd., IDBI and ICICI Bank Ltd. submits that as the Institutions have decided to file SLP against the order dated 21.5.2007 passed by the Division Bench in the aforementioned Special Appeal No. 232 of 2007, the matter for confirmation of sale may be postponed for a reasonable period so that in the meantime needful may be done for filing SLP before the Supreme Court.

Shri C.L. Pandey, learned Senior Counsel assisted by Shri P.C. Jain, learned counsel for Vishnu Kant Gupta (purchaser) has objected to the prayer made on behalf of the said M/s Hanuman Sugar Industries Limited as well as on behalf of IFCI Ltd. for postponement of the matter regarding consideration of confirmation of sale.

It is submitted by Shri Pandey that huge amount of Rs. 5,10,40,000/- has been deposited by the said Vishnu Kant Gupta (purchaser), and there is no occasion for delaying the matter regarding confirmation of sale in his favour. It is further submitted that M/s Hanuman Sugar Industries Limited has come up before the Company Judge today with the Application for adjournment merely to delay the confirmation of sale in favour of the said Vishnu Kant Gupta (purchaser). It is submitted that the Restoration Applications have been filed at a much belated stage, and therefore, the matter regarding confirmation of sale may be considered today itself.

Shri Ashok Mehta, learned counsel for the Official Liquidator submits that in view of the fact that the Restoration Applications are coming up for consideration before the Division Bench on 12.7.2007, it would be appropriate that the matter regarding confirmation of sale may be postponed for a reasonable period.

I have considered the submissions made by the learned counsel for the parties, and perused the record.

As noted above, the said Vishnu Kant Gupta (purchaser)has deposited the entire amount of sale consideration with interest as per the directions given in the orders mentioned above. The Court does not appreciate the conduct of M/s Hanuman Sugar Industries  Limited in coming up today before the Court with an application for adjournment when the question of confirmation of sale is to be considered.

However, in view of the statement made by Shri Anurag Asthana, learned counsel for M/s Hanuman Sugar Industries Limited that the Restoration Applications are coming up for consideration before the Division Bench on 12.7.2007 (i.e., tomorrow), I am of the opinion that it would be in the interest of justice that the matter regarding consideration of confirmation of sale in favour of the said Vishnu Kant Gupta (purchaser) may be postponed for a period of two weeks.

The Institutions represented by Shri O.P. Mishra may also take appropriate steps for filing SLP before the Supreme Court during the said period of two weeks.

List this case on 25.7.2007 in Chambers.

Dt. 11.7.2007

safi


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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