JAWAHARLAL Vs. OFFICIAL LIQUIDATOR,H.C. OF KERALA&ORS.

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 6541 of 2016, Judgment Date: Jul 14, 2016

                                                         NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 6541 OF 2016
              [ @SPECIAL LEAVE PETITION (C) NO. 11159 OF 2011 ]

      JAWAHARLAL                                   Appellant(s)

                                VERSUS

      OFFICIAL LIQUIDATOR,H.C. OF KERALA&ORS.      Respondent(s)

                               J U D G M E N T

KURIAN, J.

1.    Leave granted.

2.    The appellant has approached this Court,  aggrieved  by  the  impugned
Judgment dated 27.10.2010 passed by the High Court of  Kerala  at  Ernakulam
in Company Appeal No. 11 of 2010.

3.    Though the case has a chequered history, we do not think it  necessary
to go into the factual matrix, in the nature of the developments which  have
taken place during the pendency of this appeal.  Pursuant  to  the  impugned
Judgment  passed  by  the  High  Court,  the  appellant  was  sought  to  be
dispossessed and that is how, he is before this Court.

4.    On 19.01.2015, this Court passed the following order:-

“We have heard learned counsel for the parties and noted that  the  dues  of
Canara Bank as well as workers is more than Rs. 8,00,00,000/- (Rupees  eight
crores only).  The proposals that have been  given  to  this  Court  do  not
exceed Rs. 6.5 crores.
Under the circumstances, the  appropriate  course  is  to  auction  all  the
properties.  Necessary steps may be taken in  this  regard  immediately  and
the auction process be completed within eight weeks.
List thereafter.”

5.    Thereafter, on 13.04.2015, this Court, taking note of  the  statements
made on behalf of the appellant, passed the following order :-

“Learned counsel for the official liquidator says that the auction has  been
conducted and three bids were received.  Learned counsel says that he  would
like to file a status report.  Further, he says that the petitioner was  the
second highest bidder and has moved the Company Court to  increase  the  bid
amount.
Learned counsel appearing on  behalf  of  the  petitioner  says  that  since
earlier an offer of Rs. 6.5 crores was made in this  Court,  his  client  is
ready to make the deposit in the Registry of this  Court  without  prejudice
to the rights and contentions of the parties.
Learned counsel for the highest bidder is present in Court  and  would  like
to file an application for appropriate directions.
Status report may be filed within four weeks from today and the  deposit  be
made by the petitioner within six weeks from today.
List the matter in July, 2015.”

6.    In the meanwhile, the  learned  counsel  appearing  for  the  Official
Liquidator submits that the entire liability of the Company has  been  wiped
out by proceeding against other assets of  the  Company.   After  impleading
the 17th Respondent – Mr. D. Pradap on 09.05.2016,  this  Court  passed  the
following order :-

            “The application for intervention is allowed.
The learned counsel for the intervenor -  D.  Pradap  submits  that  he  had
originally participated in the auction conducted by the Official  Liquidator
and he was the highest bidder.
Be that as it may, in  view  of  the  subsequent  developments,  we  made  a
suggestion in court as to whether he is prepared to go beyond Rs. 7  crores,
which  was  offered  by  the  petitioner.   The  learned  counsel  for   the
intervenor has submitted that he is prepared to deposit  an  amount  of  Rs.
7.30 crores (Rupees Seven Crores and Thirty Lakhs).
It is submitted that he has already deposited Rs. 30 Lakhs before  the  High
Court.  It is further submitted that the remaining amount of  Rs.  7  crores
shall be deposited before the High Court by 06.07.2016.  The undertaking  is
recorded.
Post on 14.07.2016.”

7.    We are informed today that the 17th Respondent has deposited the  said
amount of Rs. 7 crores before the High Court, in addition to  Rs.  30  Lakhs
deposited before  the  Official  Liquidator  when  he  participated  in  the
auction.

8.    Today, when the matter was taken up, the appellant has submitted  that
he is prepared to raise the offer and by stages, finally it has come  up  to
Rs.8.70 crores.  The learned counsel for the appellant is still prepared  to
go beyond that, once the mind of the other side is known.

9.    Having regard to what has transpired in the Court, when the  case  was
taken up on 09.05.2016, we gave one chance to  the  17th  Respondent  as  to
whether he is prepared to go  beyond  Rs.  8.70  crores.   It  is  submitted
before this Court that they will pay Rs. 8.75 crores, to  have  a  full  and
final settlement of the whole issue.

10.   Now that the 17th Respondent has submitted  that  he  is  prepared  to
deposit Rs. 8.75 Crores, having regard  to  the  entire  background  of  the
hearing before this Court, we are of the view that  the  matter  should  end
there.

11. At the same time, we are also aware of the fact that the  appellant  had
made a deposit before this Court pursuant to orders of this Court.

12. In our view, the interest of justice would be met  in  case  the  amount
deposited by the appellant  is  directed  to  be  returned  along  with  the
accrued interest and he is also compensated appropriately, which we  fix  at
Rs. 50 Lakhs.  Hence, it is directed that the appellant will be entitled  to
get the deposit with interest refunded and  also  an  additional  amount  of
Rs.50 Lakhs (Rupees Fifty Lakhs), out  of  the  deposit  made  by  the  17th
Respondent.  The 17th Respondent is directed to deposit the balance  of  his
offer of Rs. 8.75 crores within six weeks from today before the  High  Court
and if not, the appellant will be entitled to have the offer settled in  his
favour for his offer of Rs. 8.70 crores.

13. On the deposit made by the 17th Respondent, the Registry will  make  the
payment of Rs. 50 Lakhs to the appellant  and  the  remaining  amount  along
with accrued interest will be transferred to the Official  Liquidator.   The
Official Liquidator will thereafter take steps to transfer the  property  in
favour of the 17th Respondent.

14. The learned counsel for the Canara Bank  –  Respondent  No.  15  submits
that they have a decree against Respondent No. 16 – Company, which is  being
wound up.  If there is such a decree, the learned counsel appearing for  the
Official Liquidator submits that the same can  be  looked  into  and  proper
action can be  taken  for  satisfying  the  decree  before  the  assets  are
distributed.

15. For any of the remaining issues, it will be open to both the parties  to
approach the High Court in the Company Petition.

16. With the above observations and directions, the appeal is disposed of.
            No costs.
                                                   .......................J.
                                                        [ KURIAN JOSEPH ]

                                                   .......................J.
                                                [ ROHINTON FALI NARIMAN ]

      New Delhi;
      JULY 14, 2016.