Holding

Properties of a company under liquidation must be sold by a proper, fair auction that fetches the maximum price, and the Court may intervene to ensure such a sale.

Summary

The petition concerned the sale of 291 plots belonging to Vitta Mazda Ltd, a company under liquidation. The Official Liquidator, following orders of the Company Court, attempted to auction the plots at prices far below market value, prompting the petitioners to challenge the price fixation and the liquidation process. The Supreme Court examined whether the liquidator could sell public‑interest assets at a token price and held that assets of a liquidated company must be disposed of through a proper, fair auction that secures the maximum price for the benefit of creditors and statutory dues. Relying on precedents emphasizing the public character of such property, the Court directed a fresh auction, set a reserve price of Rs 10 crores, and required the interested parties to deposit earnest money before bidding. The Court further ordered the liquidation proceeds to be deposited in a fixed‑deposit account and directed refunds of deposits where appropriate, thereby ensuring that the assets are sold at a price reflecting their true market value.

Issues considered

Whether the Official Liquidator can fix the sale price of liquidated company assets without a proper auction.
Whether the Supreme Court can intervene in the auction process of assets of a company under liquidation.
Whether selling the assets at a price substantially lower than market value violates statutory duties under the Companies Act, 1956.
Whether the Company Judge's rejection of the highest offer was valid.
Whether the Court can direct deposits and set a reserve price for the auction.

Legislation cited

Companies Act, 1956

Subjects

auctionliquidationprice fixationpublic propertyCompanies Act, 1956official liquidatorjudicial interventionfair market pricestatutory dues

Judgment

[2014] 13 S.C.R. 1

MANOJ I NAIK &ASSOCIATES A

v.
OFFICIAL LIQUIDATOR

(Special Leave Petition (Civil) Nos. 34782~34783 of 2012) B
OCTOBER 28, 2014
[DIPAK MISRA, R. F. NARIMAN AND
UDAY UMESH LALIT, JJ.]
Companies Act, 1956 - Auction sale of properties C
owned by liquidated company - Price fixation - Judicial
intervention - Held: When properties of a company under
liquidation are sold, there has to be a proper auction, a fair
one - It must fetch the maximum price - It takes care of
statutory dues, dues of the workmen and the credi~ors - It D
has its own public character - In any case, it cannot be allowed
to be sold for a song.
Ram and Shyam Company v. State of Haryana
1985 (1) Suppl. SCR 541 : 1985 (3) SGC 267; E
Committee of Management of Pachaiyappa's
Trust v. Official Trustee of Madras and Another
1993 (3) Suppl. SCR 110: 1994 (1) sec 475; _
Chenchu Rami Reddy v. Govt. of A. P. 1986 (1)
SCR 989 : 1986 (3) SCC 391; Mee rut F
Development Authority v. Association of
Management Studies and Another 2009
(6) SCR 663 : 2009 (6) SCC 171- referred to.

Wayde's treatise on Administrative Law G
Administrative Law, 91h Edn., H.W.R. Wade &C.F.
Forsyth - referred to.

H
1

T
2 SUPREME COURT REPORTS [2014] 13 S.C.R.

A Case Law Reference:

1985 (1) Suppl. SCR 541 referred to Para 9
1993 (3) Suppl. SCR 710 referred to Para 11

B 1986 (1) SCR 989 referred to Para 11

2009 (6) SCR 663 referred to Para 12

CIVIL APPELLATE JURISDICTION: SLP (C) Nos.
34 782-34 783 of 2012.
c
From the Judgment and Order dated 24-08-2012 and
30-08-2011 of the High Court of Gujarat atAhmedabad in MCA
No. 77of2012inOJANo.81 of2004inOLRNo.100of2003
and in OJA No. 81 of 2004 in OLR No. 100 of 2003 in OLR
D No. 24 of 2002.
A. Saran, Sr. Adv., Amit Kumar, Ms. Rekha Bakshi,
Shaurya Sahay for the Petitioner.
Tushar Mehta, ASG, A. K Srivastava, C. R. Singh, Shyam
E Divan, Shirish H. Sanjanwala, Sr.Advs .. Braj Kishore Mishra,
Ms. Aparna Jha, Abhishek Yadav, Ejaz Maqbool, Mrigank
Prabhakar, GauraveAgrawal,A. L. Shah, R. Shaa, P. Soma
Sundaram, David Rao, Amar Dave, Pradhuman Gohil, Vikas
Singh, Ms. Taruna Singh Gohil, Ms. Jaikriti Sinh Jadeja, Ms.
F Prabuddha Sharma, Amit Anand Tiwari, Avinash Tripathi,
Shamik Sanjanwala, Kailash Pandey, Ranjeet Singh, K. V.
Sreekumar, E. C. Agrawala, Ankur Saigal, Mahesh Agarwal,
Vivek Singh for the Respondent.
G The Judgment of the Court was delivered by
DIPAK MISRA, J. 1. The factual exposition that is
capable of being encapsulated in a real small compass, has,
with some_ passage of time and turn of events, grown into a
H colossal structure having the effect potentiality to amaze and
MANOJ I NAIK &ASSOCIATES V. OFFICIAL LIQU.IDATOR 3
[DIPAK MISRA, J.]

perplex any prudent man. The chronology of events pyramids A
a gradual financial structure, making it limpid·how on certain
occasions properties are sold for a song in so called sales
made in the proceedings under the provisions of the
Companies Act, 1956 (for brevity 'the Act') and how with some
intervention the said competitors metamorphose themselves B
into different incarnations, and the roses on the table turn into
pearls and diamonds in the private closets. To put it succinctly,
the price fixed at Rs.6.25 crores for 291 plots has fetched, by
the intervention of this C?urt, Rs.70 crores for 113 plots. It is
not change of heart, but the price reality that gets manifest. C
Not for nothing it has been said, "money can solve the problems
concerned with money". The large amount of money, we are
incli~ed to think, would solve the problems of the company in
question.
D
2. The short narration. A company, namely, M/s Vitta
Mazda Ltd. went into liquidation and on 21.02.2002, the High
Court of Gujarat directed the Official Liquidator to put up the
properties of the company in liquidation (exceptthose for which
applications are pending before the said Court for E
regularisation of transactions) to auction for sale. Thereafter
many an order was passed. On 18.12.2004, the learned
Company Judge, by taking into consideration many aspects,
declined to accept the rerort of the Official Liquidator for
acceptance of the offer made before the sale Committee. An F
appeal was preferred being O.J. Appeal No. 81 of 2004,
wherein the Division Bench of the High Court on 30.08.2011
passed the following order:
"1. The present appeal arises against the order dated G
18.12.2004 p.assed by the learned Company Judge in
OLR No. 100 of 2003, whereby the learned Company
Judge has not accepted the report of the OL for
acceptance of the offer made before the Sale Committee.
H
4 SUPREME COURT REPORTS [2014] 13 S.C.R.

A 3. It is an admitted position that the appellant was one of
the offerers, who submitted the highest offer before the
Sale Committee and when the report was made by the
OL for approving the offer accepted by the Sale
Committee subject to approval.of the company Court,
B the learned Company Judge found that it would not be a
, case for acceptance of the offer and, therefore, rejected
the report submitted by the OL.
5. Apart from the above, even if the matter is to be
C considered for the test of exercise of the judicial discretion
exercised by the learned Company Judge, it appears
that the learned Company Judge, at paragraph 5,
recorded that the valuation made by the Bank of Baroda
of the property is much more than the offer submitted by
D the appellant. If the said aspect is further considered, it
, appears thatthe offer of the appellant was Rs. 1.03 crore,
whereas it is a part of the record of the Sale Committee's
proceedings that as per Bank of Baroda, the valuation
of the property was Rs. 6.25 crore. It has been stated
E that there was also another report, which was shown to
the Court.
6. Be that as it may, even if it is considered that the offer
of the bank of Baroda was of Rs. 6.25 crore as per the
F valuation report available and the highest offer was of
Rs. 1.03 crore coming on record and under these
circumstances, if the learned Company Judge found it
proper not to accept the offer by confirming the sale, such
an exercise cannot be said to be erroneous. On the .
G contrary, the exercise would be in the larger interest of
the corpus of the company.
7. Additionally the learned Company Judge, in the
impugned order, has also recorded the fact that the total
H
I

MANOJ I NAIK &ASSOCIATES v. OFFICIAL LIQUIDATOR 5
[DIPAK MISRA;J.]
),
. chunk of property comprises o(various plots of different A
: ~''.' ' characteristics' namely; that on some plots, there were
;_ • encroactiin'ents'.' for some plots: there were litigations and .- I

. , some plots were clear. ·Therefore, the learned Company
'Judge found that if ihe prpperties are~ sold as it is,
comprising of all the plots simultaneously: it may create B
,,;· :: 'complications and,' therefore, the learned Company
:en' 'Judge directed the OL to prepare a list of the plots, which
:J:'.: ; were not occupied bYanyone·and in respect of which,
. there was no' dispute or litigation and. thereafter to
. , , undertake the process to sell and dispose of the plots at C
'.. . ' • .. i ;., ' '1 •< ·, '' • ~ • ' ' ' • - • ' ••

· ,'· a later.-.
·:::~·
stage.·.-___ In .,-.,,·,.,,,,_..·,,,.,,
view of the above, if the property
'-
is
·.segregated into various compartments of clear property,
propert}' with dog and/or property' with encroachment,.
: ,•;: while disposing of.the immovable properties, it would
.::::;'::be.rather in the interest of the company, since the clear D
·,_.·:.:·property is bound to fetch higher price in comparison to.
)? '. · · the other two properties namely; with clog in the title and/
i '. orwith encroachment or otherwise." ' · ·· .. · .
·, . --- ,. : '

.3. When the matter was listed 'on vario~~ dates, it was E
thought it appropriate that there should be a proper auction
and, accordingly~ the following order came to be passed on
02.07.2014:~:L... ::•: :c :::.1•: ·: .. ' .:·. " · ·.

.. .• ~ThisCdurt; while issuing ~oti~r{on o2~11.~012 h~d F
: J. ,· P.~~~e~ ~he follp~i.llg ?rd~{. . . · " · • · · •
>'• : "• r"Leamed senior counsel appearing for the
: · ' ' ('' petitioner submits that the petitjoner is willing to match
'o.: ·the offer"of Rs.6.25 crores· made'tiy the Bank of G · ·
'" :• - . Baroda: Submission recorded.~.· :: ' · .,"
.-.- •' . ,.,
·· Ther~after, ihe matter has been adjourned and certain
applications have
· allowed.
been
filed for impleadment, which are
· · · .· ,. · · ·
H
6 SUPREME COURT REPORTS [2014] 13 S.C.R.

A Mr. Ahmadi, learned senior counsel appearing for the
applicant Mis. SNDT Enterprises in IA 6-712013 has
submitted that the applicant therein is prepared to pay
Rs. 25 crores for the property that was sought to be
auctioned.
B
Not intending to lag behind, Mrs. Meenakshi Arora,
learned senior counsel appearing for Mis. Star and
Associates in IA No.10-11/2013 submitted that the
applicant herein is prepared to pay Rs.30 crores.
c Mr. Pradhuman Gohil, learned counsel appearing for
Mr. Ranjitsinhji N. Parmar in IAB-9/2013 equalises the
offer given by Mr.Ahmadi, i.e. Rs. 25 crores.
Mr. Sharan, learned senior counsel appearing forthe
D petitioner has expressed the skepticism to the offers
made by the applicants. It is his submission that if they
intend to show their bona tides, they should deposit at
least Rs.10 crores before this Court as the petitioner is
also inclined to deposit Rs.10 crores.
E
In view of the aforesaid submission, we direct that
the applicants, whose names have been mentioned
hereinabove as well as the petitioner shall deposit a sum
of Rs. 10 crores each by way of bank draft drawn in favour
F of the Secretary General of this Court within three weeks
from today. Needless to say that this amount may be
treated as off-set price and thereafter this Court may think
of going through the bidding process, if required. Let it
be stated the offer is made keeping in view the auction
G notice. Nothing more, nothing less.After the deposit of
the amount, the same shall be kept in a nationalised
bank in a short-term interest bearing account.
List on 11.08.2014."
H
MANOJ I NAIK&ASSOCIATESv.OFFICIALLIQUIDATOR 7
.[DIPAK MISRA, J.]

4. After the said order was passed, certain deposits were A
made by 3 firms/companies. Regard being had to the said
. situation, on 19.08.2014, after referring to the earlier orders,
the following order came to be passed :-
"We have been apprised by the Registry that deposits 8
which were directed by this Court have already been
made and, therefore, all the parties have complied with
the order. In view of the aforesaid position, we direct the
Offidal Liquidator to proceed with the fresh auction. The
factum of auction shall be advertised in local Newspapers c
one in English and another in vernacular language. That
apart there should be an advertisement in any daily ·
National Newspaper having adequate circulation in the
country, regard being had to the issue involved in such a
matter. The·upset price shall be fixed at Rs. 10 crores. D
·The advertisement shall be issued within a period of
two weeks from today. The bidding process shall be
completed within four weeks therefrom. As far as M/s
Star and Associates is concerned, if they offer a bid less
than Rs.30 cores that bid 'Shall not be accepted but their E
claim of amount shall be con.sidered subject to further
orders of this Court. Similarly, as far as Mr. Ranjitsinh
Parmar is concerned, his bid for less than Rs.25 crores
shall not be considered but he would be entitled to claim
refund of the amount subject to further orders of cost. F

The Managing Director of M/s. SNOT Enterprises on
whom cost of Rs. 5 lakhs was imposed shal! remain
personally present on the next date of hearing if the cost,
as directed, is not deposited before the Registry of this G
Court. In case the deposit is made, an affidavit shall be
filed and he need not appear in person. Needless to
emphasise that in the event of non-deposition, he shall
personally appear and this Court may consider passing
H
8 SUPREME COURT REPORTS [2014] 13 S.C.R.

A appropriate orders in that regard.

We may add that anyone who intends to bid, he has to
deposit a sum of Rs.10 crores as earnest money so that
he can claim parity with the three contenders who are
B before this Court. Barring what we have stated, the other
conditions in the initial notice for auction shall remain the
same. As the three bidders have deposited Rs.10 crores,
they need not to deposit earnest money, as the
deposition of that amount before this Court tantamounts
C to deposition of earnest money.
The place of auction will be atAhmedabad. There will
be stay offurther proceedings before any Court relating
to the property involved in this case.
D· The Registry shall keep the deposited amount in
F.D.Rs. in a nationalised bank in a short-term interest
bearing account."
5. In the meantime, certain unwarranted, unhappy and
E · uncalled for situation took place. The Official Liquidator filed a
report before the learned Company Judge seeking permission
to exclude certain plots from the original list and, accordingly,
the learned Company Judge granted the extension of time. In
our considered opinion, when the mater was subjudice before
F this Court, the learned Company Judge should not have dealt
with the same regard being had to the fundamental concept of
judicial discipline. Be that as it may, the Official Liquidator
issued an advertisement in respect of 291 plots wherein it was
clearly mentioned that the sale had been confirmed by the
G learned Company Judge in respect of 87 plots and the said
confirmations were the subject matter of appeals before the
Division Bench which were subjudice. Similarly, it was also
mentioned that the order of status quo was operational in
respect of 10 plots and the said order of status quo had been
H
MANOJ I NAIK &ASSOCIATES'v: OFFICIAUUouibATOR 9·
[DIPA_K MISRA, J.]

passed :by a coordinate Bench ofthis Court. 1 1t was 'alsci1 A\
postulated therein that certain plots had been encroached upon j
a'nd certain plots were subject matter of registered sale deeds;'
though no ·application' had been·filed before the·CoU'rt ·for;
validation. In course of hearing of these petitions, we nave been•·
apprised'that applications for validation are pending before· 8~
1

the learned Company Judge. ·· '. ~ .. ' ·,·~
,=,ft .. ~ 1
1 ,,
• • o:... 4.··t: ~1·.J·::,,' ·-ru riJ
ic:_, 6.. Qn a perusal of the ~dve,r:tisel}l_en~, i~_is,cle'\IJ_as pry~.~a!;
that 113 plots.adrri~~s.uri~g.91,960:ZR _s,q. mtrs. forl!J]~g·?W~!! 1
of Annexure-J;JI of the Corrig~ndum was absplutelyJree arid · 1 c
availablG for auction.
"/.At this juncture, it is pertinent to mention that the bids
w~ich .:1i,ere 9~ered iq' respecfof tp~.pio~s .t~~t ~er~ip~t}R.· -
a1:1_c~i.Ql)1.,~cre, OP.~r:i.esJ_-be.f9[~.:us:,: M/~;fv1an9U -~(lik. &_, 0 .
Associates, the appellant herei~,.has offer~d Rs:_ten.<?Lctr.~~ 1
eleven thousand; Mr. Laxmi Narayan Garg has made an offer
of Rs. 10 crores; M/s Star &'Associates•has offered Rs. 31
croresflt is submitted by Mr. A. Saran, learn'ed senior counsel
for the· appellant, tht.t the Official Liquidator had no authority to E•
issue a Corrigendum or to place a clarificatory note in respect
of the plots. That' apart, subniits Mr. Saran,- the 1Qfficial
Liquidator has committed grave illegality and,·ih a way,
contempt of the Court by apprqaching the ·High Court and
stating that this Court had· made certain' oral observations. F"
which was really hot correct, ·for everythingwas unequivocally
stated ir1'the order. Ordinarily, we would have proceeded to
addres~Hhe submissions made With emphasis by Mr: A. Saran,
tiut as advised at present, we are refraining from doin!.1so, for
what has· happened in .the course of heating. !j g;··i<.~ ·Jn.' G
~--~~ ..... ;~dt, ,.'i .,. .. ~rt·· _,,·; .-. )l i~-.-r ,~. ·'t;r ....,"". . lisvr- qrU
8. Here 'the sad sad story~begins. ·Mr.''1ushar. Mehta,
learned Addition al Solicitor General, while defending the stand
of the Officiel Liquidator, though made certain efforts to justify
10 SUPREME COURT REPORTS [2014] 13 S.C.R.

A his action, yet ultimately realised that it was a sisyphean
endeavour because the action may be genuine but should not
have been undertaken. Mr. Tushar Mehta learned Additional
Solicitor General, and Mr. Gaurav Agrawal, learned counsel,
appearing for the Official Liquidator, while expressing regret
B about the steps taken by the Official Liquidator who has also
rendered unconditional apology, submitted that the prices of
the land have gone up and there is a valuation report by the
Gujarat Industrial and Technical Consultancy Organisation Ltd
(GITCO) which has estimated the price at Rs. 66, 15,22,000/-
C in respect of total freehold land available for sale, that is, 113
plots.

9. The said valuation report compelled us to think in a
different way and impelled us to recapitulate certain authorities
D of this Court. In Ram and Shyam Company Vs. State of
Haryana 1, the Court observed thus:
"12 .... Owner of private property may deal with it in any
manner he likes without causing injury to any one else.
E But the socialist or if that word is jarring to some, the
community or further the public property has to be dealt
with for public purpose and in public interest. The marked
difference lies in this that while the owner of private
property may have a number of considerations which may
F permit him to dispose of his property for a song. On the
other hand, disposal of public property partakes the
character of a trust in that in its disposal there should be
nothing hanky panky and that it must be done at the best
price so that larger revenue coming into the coffers of
G the State administration would serve public purpose viz.
the availability of larger funds. This is subject to one
important limitation that socialist property may be
disposed at a price lower than the market price or even

H 1 (1985) 3 sec 267
MANOJ I NAIK &ASSOCIATES v. OFFICIAL LIQUIDATOR 11
[DIPAK MISRA, J.]

for a token price to achieve some defined constitutionally A
recognized public purpose, one such being to achieve
the goals set out in Part IV of the Constitution. But where
disposal is for augmentation of revenue and nothing else,
the State is under an obligation to secure the best market
price available in a market economy. An owner of private B
property need not auction it nor is he bound to dispose it
of at a current market price. Factors such as personal
attachment, or affinity, kinship, empathy, religious
sentiment or limiting the choice to whom he may be willing
to sell, may permit him to sell the property at a song and C
without demur. A welfare State as the owner of the public
property has no such freedom while disposing of the
public property. A welfare State exists for the largest good
of the largest number more so when it proclaims to be a
socialist State dedicated to eradication of poverty. All D
its attempt must be to obtain the best available price while
disposing of its property because the greater the
revenue, the. welfare activities will get a fillip and shot in
the arm. Financial constraint may weaken the tempo of E
activities. Such an approach serves the larger public
purpose of expanding welfare activities primarily for which
the Constitution envisages the setting up of a welfare
State."
10. In the aforesaid case, the Court held auction in Court F
in respect of some quarries relating to minor minerals. The·
appellant therein who initially had given an offer of Rs.5.5 lakhs,
eventually offered Rs.25 lakhs. Taking note of the state of affairs,
the Court observed:
G
"6. Shock and surprise was visible on the face of each
one in the Court. Shock was induced by the fact that
public property was squandered away for a song by
persons in power who hold the position of trust. Surprise
H
12 SUPREME COURT REPORTS [2014] 13 S.C.R.

A was that how judicial intervention can serve larger public
interest. One would require multi-layered blind-fold to
reject the appeal of the appellant on any tenuous ground
so that the respondent may enjoy and aggrandize his
unjust enrichment. On this point we say no more."
B
11. In Committee of Management of Pachaiyappa's
Trust Vs. Official Trustee of Madras andAnother, the Court
placing reliance on paragraph 12 in Ram & Shyam Company
(supra) and Para 27 in Chenchu Rami Reddy \I. Govt. of
c A.P. 3 , opined thus:
"28. The aforesaid observations in the context of public
property and property belonging to religious and
charitable endowments and institutions would equally
apply to trust property as in the present case."
D
12. In Meerut Development Authority \I. Association
of Management Studies and Another', after referring to
number of decisions including Ram and Shyam Co. (supra),
the Court reproduced a passage from Wayde's treatise on
E Administrative Law5, which is as follows:
"The powers of public authorities are therefore essentially
different from those of private persons. A man making
his will may, subject to any rights of his dependants,
F dispose of his property just as he may wish. He may act
out of malice or a spirit of revenge, but in law this does
not affect his exercise of his power. In the same way a
private person has an absolute power to allow whom he
likes to use his land, to release a debtor, or, where the
G law permits, to evict a tenant, regardless of his motives.
This is unfettered discretion. But a public authority may
2
(1994)1sec475
3 (1986) 3 sec 391

' (2009) 6 sec 111
H 5 Administrative Law, 9th Edn., H.W.R. Wade & C.F. Forsyth
MANOJ I NAIK &ASSOCIATES v, OFFICIAL'LIOUIDATOR 13
[DIPAK MISRA, J.]

do none of these things unless it acts reasonably and in - A\
' -· good faith and upon lawful and relevant grounds of public·
interest. So a city council acted unlawfully when it refused
unreasonably to get a locally-rugby football club use the
city's sports ground, though a private owner could of
~-.:· course have refused "with impun'ity. Nor may local s a
. - ' authority"arbitrarily release'debtors:and if it ev.icts tenants, -
''°1-' even though .in accordance with a contract, it must act
r~ .~ ~ . • • . .'. '1 , , ~I , , j • . ·:' ~. l~ <

(' ~ i
reasonably and 'within the limits offair
, - .. 1•
dealing'.
' .
' .. ' . . '
The
. --~I Ii ~- . . < •• I ' - . '. • L

whole Conception qf unfettered discretion is inappropriate
. r - to a public autbority: ·~hi ch po~sess~s ppwe'rs solely in ' c
_, order tha_t it may use them for thE;l pubiic good." ., .

·. - · 13. At this juncture, we are obliged state that in the' to
case at hand, we are dealing with properties owned by a·
company under liquidation'and therEfhas been price fixation· D'
by the Company Court. GITCO has estimated the valuation in'
praesenti. It is not in dispute; as per the orders passed by the
Company Court as well as the Division .Bench in Company
Appeal and as understood by this Court, 291 'plots were to be·
put to auction and for the total number of plots the prices were E
offered by the bidders who had shown interest before this
Court to bid and this Court had fixed the reserve price at Rs.10,
crores. Counsel for the parties on 02.07.2014 had gone to
the extent of saying that they were prepared to offer Rs.25~30 F .
crores in the auction and we have already mentioned offers
have come in the sealed cover. -· •· ,.,,~. · ·'
~ . . ''· I . - I ,' • - • -. - ' , .

. 14. Ordinarily, what we would have done is absolutely.
another .matter. There can be po speck of doubt tha(the
properties of a company under liquidation when sold, there G.
a
has to be proper auction, fair one. It must fetch the maximum a
price. It takes care of statutory dues, dues of the workmen
and the creditors. It has its own public character. In any case,
it cannot be allowed to be sold for a song;'The estimated price
H
14 SUPREME COURT REPORTS [2014J13S.C.R.

A given by GITCO is more than Rs.66 crores for 113 plots, which
are free. Therefore, we thought it seemly to ask the learned
counsel appearing for the parties, if they are agreeable for
open auction by giving their offers befote this Court.

B 15. Mr.A. Saran, learned senior counsel, Mr. Braj Kishore
Mishra, learned counsel, Mr. Vivek Singh, learned counsel and
Mr. Amar Dave, learned counsel, conceded to the said
suggestion. In the High Court initially Rs.6.25 crores had been
offered, and we had fixed the reserve price at Rs. 10 crores
c and, to test the bona fide of the bidders, we had directed them
to deposit Rs. 10 crores each before the Registry of this Court
which has been done. Now the initial thought, graduated to a
shock. When auction commenced, Mr. Braj Kishore Mishra,
learned counsel, along with Mr. Vivek Trivedi, learned counsel,
D after obtaining instructions from Mr. S.D. Verma, a partner of
Mis Star &Associates, informed the Court that they are willing
to offer Rs. 31 crores for 113 plots which are free. Determined
not to lag behind, Mr. A. Saran, being instructed by Mr. Amit
Kumar, learned counsel, on behalf of the petitioner, ultimately
E raised the figure upto Rs.65 crores. Be it stated, we had
requested the bidders to hike their price by Rs.5 crores so
that the auction becomes real and not unnecessarily time-
consuming. Mr. A. Saran, learned senior counsel, Mr. Braj
Kishore Mishra, learned counsel, Mr. Vivek Singh, learned
F counsel and Mr. Amar Dave, learned counsel, co-operated.
Eventually, Mr. Braj Kishore Mishra, learned counsel, appearing
for M/s Star &Associates enhanced the price to Rs. 70 crores,
Mr. A. Saran, Mr. Vivek Singh and Mr. Amar Dave did not think,
G as instructed by their respective clients, to bid further. Thus,
we find that the report submitted by GITCO appears to be
correct. That is a redeeming feature to pardon the Official
Liquidator and we do so.
16. In view of the aforesaid, we direct Mis. Star and
H
MANOJ I NAIK &ASSOCIATES v. OFFICIAL LIQUIDATOR 15
[DIPAK MISRA, J.]

Associates to deposit a sum of Rs.20 crores by the end of A
November, 2014 and another Rs.40 crores by March 15, 2015
before the Registry of this Court. The amount shall be
deposited in an interest bearing fixed deposit in a UCO Bank,
Supreme Court Compound, New Delhi. After Rs.60 crores
are deposited, Rs. 10 crores that have been deposited by the B
company before the Registry shall be added and handed over
by way of a banker's cheque to the Official Liquidator along
with interest. Needless to emphasise, if any of the directions
is not complied with or for any reason, extension is sought,
Rs. 10 crores that has been deposited before this Court along C
with interest shall stand forfeited and go to the account of the
company. This aspect is also conceded to by Mr. Braj Kishore
Mishra and Mr. Vivek Trivedi. ·

17. As far as deposits made by the petitioner and Mr. D
Ranjitsinh Parmar before this Court are concerned, the
deposits shall be refunded along with interest within two weeks
hence. The amount deposited by Mr. Laxmi Narayan Garg with
the Official Liquidator shall also be refunded within a week
from today. Any earnest money that has been deposited with E
the Official Liquidator shall also be refunded to the concerned
company/person.
18. At this juncture, it is appropriate to mention that the
rest of the plots in respect of which there is an order of status F
quo by this Court or which are subjudice before the appellate
court on the company side before the High Court, needless to
say, shall be dealt with at the subsequent date.
19. At this juncture, we are obligated to clarify that G
interlocutory applications which have been filed before this
Court can be filed before the High Court and the orders passed
by the High Court shall be filed before this Court in these
special leave petitions so that they can be appositely dealt
H
16 , SUPREME COURT REPORTS [2014] 13 S.C.R.

A with. The order of stay granted earlier, that is, directing stay of
further proceedings before any Court relating to the property
involved in this case, is modified to the extent indicated above.

20. Let the matter be listed for further hearing on March
B 24, 2015.

Bibhuti Bhushan Bose Matter adjourned.