Holding

Once the Company Court records that the price offered is adequate and accepts the highest bid, subsequent higher offers or later developments cannot be a ground to set aside or refuse confirmation of the sale.

Summary

The case concerned the auction of a free‑hold land of a company in liquidation. The Company Judge accepted the highest bid of Vedica Procon Private Ltd. (Rs 148 crore) on 17‑12‑2013 and the official liquidator treated the order as confirming the sale. The unsuccessful bidder, Balleshwar Greens Pvt. Ltd., later offered a higher price and argued that the Court should recall the order because the land’s value had increased due to a change in floor‑space‑index regulations and because the successful bidder’s shareholding pattern had changed. The High Court set aside the 17‑12‑2013 order, prompting the appeal. The Supreme Court held that once the Court records that the price is adequate and accepts the highest bid, a later higher offer or subsequent increase in property value cannot be a ground to reopen or refuse confirmation of the sale. The Court also rejected the contention that the order merely accepted the bid without confirming the sale, finding that the sale was effectively confirmed. Consequently, the Supreme Court allowed the appeal, restoring the original order accepting the appellant’s bid.

Issues considered

Can a Company Court set aside an order accepting the highest bid and confirming a sale on the basis of a subsequent higher offer?
Does a subsequent increase in the value of the property (e.g., due to change in FSI) constitute a valid ground to refuse confirmation of a sale already accepted?
Is an order that accepts the highest bid also a confirmation of the sale, or can it be treated as merely an acceptance pending further confirmation?
Does a change in the share‑holding pattern of the successful bidder affect the validity of the sale under the tender conditions?
What is the scope of the Company Court’s discretion to reopen a concluded sale absent fraud or material irregularity?

Subjects

auctioncompany liquidationsale confirmationsubsequent higher offerproperty valuationcourt discretionshareholding changefloor space index

Judgment

(2015] 8 S.C.R. 1099

VEDICAPROCON PRIVATE LIMITED A
v.
BALLESHWAR GREENS PRIVATE LIMITED & OTHERS
(Civil Appeal No. 6165 of 2015)
B
AUGUST 13, 2015
[J. CHELAMESWAR AND
ABH"AY MANOHAR SAPRE, JJ.]
Auction - Company under liquidation - Auction of c
properly- Highest bid by the appellant-Acceptance of the
bid by the company judge - Subsequently, unsuccessful
bidder sought revocation of said orderon the ground that the
unsuccessful bidder was willing to offer higher price - High
Court held that the Company judge's order accepting bid of D
the appellant-highest bidder was .vitiated as judge failed to
take note of potential value of land and bid of the appellant
was inadequate price to the said property- Justification of-
Held: High Courl was not justified in recalling the order -
Highest bid of the appellant was accepted by the Company E
Court and none of the stake-holders of the company in
liquidation as also first respondent ever objected to the offer
of acceptance - Rise in the value of the property in view of
the subsequent development not a relevant consideration -
Submission that there was no confirmation of sale in favour F
of the appellant but only acceptance of the highest bid, thus,
the courl could reject confirmation of the sale in view of the
subsequent developments cannot be accepted - No
subsequent higher offer can constitute a valid ground for G
refusing confirmation of the sale or offer already made -
Furthermore, acceptance of payment of 25% of the sale
consideration by the official liquidator and the Company Courl
without raising any objection for the same and withdrawal of
earnest money deposit by first respondent-unsuccessful H
1099
1100 SUPREME COURT REPORTS (2015] 8 S.C.R.

A bidder without raising any objection regarding adequacy of
the price offered by the appellant clearly indicate that the
sale in favour of the appellant was confirmed by the said order
- Subsequent event.

B Allowing the appeals, the Court

HELD: 1.1 It is well-settled principle that once the
Company Court recorded its conclusion that the price
is adequate, subsequent higher offer cannot be a ground
c for refusing confirmation. The judgment relied upon by
the first respondent does not indicate that this Court has
ever laid down a principle that whenever a higher offer
is received in respect of the sale of the property of a
company in liquidation, the Court would be justified in
D reopening the concluded proceedi.ngs. [Para 39, 44)
[1122-E-F; 1127-B-C]

1.2 The High Court was not justified in recalling
the order dated 17.12.2013 for following reasons. The
E highest bid of the appellant was accepted by the
Company Court and all the stake-holders of the
company in liquidation were heard before such an
acceptance. Nobody ever objected· including the first
respondent at that stage on any ground whatsoever,
F such as, that there was any fraud or irregularity in the
sale nor was there any objection from any one of them
that the price offered by the appellant was inadequate.
No doubt, the property in question became more
valuable in view of the subsequent development. It is
G not a relevant consideration in determining the legality
of the order dated 17.12.2013. Imagine, if instead of
increasing the floor space index for construction from
1.0 to 1.8 the State of Gujarat had decided to reduce it
below 1.0 subsequent to 17.12.2013, could the appellant
H be heard to argue that it would be legally justified in
VEDICAPROCON PRIVATE LTD. v. BALLESHWAR 1101
GREENS PVT. LIMITED

resiling from its earlier offer which was accepted by the A
Court and not bound by the contractual obligation ·
flowing from such an offer and acceptance _[Paras 47,
48] [1127-G-H; 1128-A-D]

1.3 The submission thatthe order dated 17.12.2013 B
only accepted the highest bid but it did not confirm the
sale and, therefore, the Court is at liberty to decline
confirmation of. the sale in view of the subsequent
developments cannot be accepted because there is no
specific format in which a sale conducted by the official C
liquidator is to be confirmed by the Company Court. The
mere absence of the expression "that the sale is ·
confirmed" in the order dated 17.12.2013 is not
determinative of the question. The totality of the
circumstances, such as, the very tenor of the order that D
none of the stake-holders of the Company in liquidation
ever objected to the offer of the appellant on the ground
that it is inadequate consideration for the property; the
fact that the official liquidator himself understood the
order dated 17 .12.2013 to be an order not only accepting E
the highest bid of the appellant but also as an order
confirming the sale in favour of the appellant, as
evidenced by his letter dated 19.12.2013 and the fact that
the first instalment of the payment of 25% of the sale F
consideration was accepted both by the official liquidator
and the Company Court without raising any objection
for the same and the fact that the first r~spondent
withdrew its earnest money deposit without raising any
objection regarding adequacy of the price offered by the G
appellant clearly indicate that the sale in favour of the
appellant was confirmed by the order dated 17 .12.2013.
·Assuming for the sake of argument that there is no
confirmation, in the absence of any legally tenable
ground for not-confirming the sale, it cannot be declined H
1102 SUPREME COURT REPORTS [2015] 8 S.C.R.

A to the appellant as it was observed in Navalkha case that
" ... no subsequent higher offer can constitute a valid
ground for refusing confirmation of the sale or offer
already made". [Para 50] [1128-E-H; 1129-A-E]

B 1.4 The submission made before the Division
Bench of the High Court and this Court by the first
respondent that there was a change in the share-holding
pattern of the appellant company subsequent to the
order dated 17.12.2013 and that such a change would
C virtually amount to a nomination by the successful
bidder in favour of a third party contrary to the conditions
of the tender notice does not deserve any consideration.
This was not the ground on which the first respondent
initially sought recall of the order. Such a recall was
D sought only on one ground. The first respondent kept
on adding new grounds from stage to stage for attacking
the order dated 17 .12.2013. The conduct of the first
respondent is understandable. The value of the property
must have escalated substantially in view of the
E developments subsequent to the order dated 17.12.2013
but allowing such an attempt, would rob the sales
conducted by the Courts of all sanctity. [Para 51] [1129-
F-H; 1130-A-B]

F Navalkha & Sons v. Sri Ramanya Das & Ors. (1969) 3
SCC 537: 1970 (3) SCR 1- relied on.

Manoj I Naik &Associates v. Official Liquidator(2015)
3 SCC 112- Held inapplicable.
G
Shradhha Aromatics Private Limited v. Official
Liquidator for Global Arya Industries Limited & Ors.
(2011) 6 sec 207 - distinguished.

Valji Khimji & Company v. Offir:ial Liquidator of
H Hindustan Nitro Product (Gujarat) Limited &·ors. (2008)
VEDICAPROCON PRIVATE LTD. v. BALLESHWAR 1103
GREENS PVT. LIMITED

9 SCC 299: 2008 (12 ) SCR 1;; Divya Manufacturing A
Company (P) Ltd. v. Union Bank of India & Ors.'(2000)
6 SCC 69: 2000 (1) Suppl. SCR 474; FCS Software
Solutions Ltd. v. LA Medical Qevices Ltd. & Ors. (2008)_
10 SCC 440: 2008 (10) SCR 479 - referred to.
~
8
Case Law Reference

2008 (12) SCR 1 referred to. Para 34
1970 (3) SCR 1 relied on. Para 39,50
2000 (1) Suppl. SCR 474 referred to. Para 35,37 c
2008 (10) SCR 479 referred to. Para 35,45
(2015) 3 sec 112 Held inapplicable.Para 46
(2011) 6 SCC 207 . distinguished. Para 46 D
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
6165 of2015
From the Judgment and Order dated 04.12.2014 of the
High Court of Gujarat at Ahmadabad in OJ Appeal No. 36 of E
2014 in OL Report No. 43 of 2013 in OL Report No. 36 of
2011 in OL Report No. 136 of 2010.

WITH

C.A. No. 6166-6167 of2015 F

Kapil Sibal , Shyam Divan, V. Giri, Manali Singhal,
Saurabh Kirpal, Sanjay Agarwal, Diksha Rai, Watta.n Sharma,
Deepak Singh Rawat, Nikhil Goel, Naveen Goel, Marsook
Bafaki, for the Appellant. G

Dushyant A. Dave, Meenakshi Arora, Anjl Kumar
Sangal, Ramesh Singh, Hursh Jain, Manisha Handa, Mohit D.
Ram, Ravindra Kumar, Aditya Kr. Choudhal)', V.S. Dhindsa,
H
1104 SUPREME COURT REPORTS (2015] 8 S.C.R.

A Himanshu Setia, Manila Choudhary, Anil Kumar Sangal,
Siddharth Sangal, D. P. Mohanty for the Respondents.

The Judgment of the Court was delivered by

CHELAMESWAR, J. 1. Leave granted.
B
2. Mis Omex Investors Ltd. was ordered to be wound
up by the Company Judge of the Gujarat High Court by an
order dated 6.3.1990. The Official Liquidator attached to the
Gujarat High Court was appointed as the Liquidator of the said
C company.

3. By order dated 26.3.2013, the official liquidator was
directed to put the freehold land of the company ad measuring
13895 sq. mtr. to auction for sale by inviting offers from the
D intending purchasers in sealed covers. By the said order, the
High Court also fixed an upset price at Rs.55 crores and
earnest money deposit (EMO) at 10% thereof.

4. Tender Notice (containing the terms and conditions
E of sale) inviting offers from the prospective purchasers in
sealed covers was widely published. 11 prospective
purchasers responded to the notice. On 17.12.2013, an auction
was held in the open court. After inter-se bidding of 12 rounds,
the appellant in Civil Appeal arising out of SLP (Civil) No.2198
F of 2015 ("Vedica Procon Private Limited", hereinafter referred
to as "the appellant") became the highest bidder with an offer
of Rs.148 crores 1 - whereas the first respondent (Balleshwar
Greens Private Limited) in the abovementioned SLP made
the second highest bid. The High Court accepted the bid of
G the appellant.

1 In order of the High Court dated 17.12.2013, it is recorded as follows:

7. Jn view of the aforeSa1d, it transpires that Mis Vedia Procon Pvt. Ltd. being the
H highest bidder, has offered Rs.148 Crores (RupeP.c: 0ne HuQdred Forty Eight Crores)
for the land admeasuring 13895 Sq. Mtrs. Approx. situated at T.P. No.18 of F.P. No.32/
VEDICAPROCON PRIVATE LTD. v. BALLESHWAR 1105
GREENS PVT. LIMITED [J. CHELAMESWAR, J.)

5. By the same order the High Court recorded that the A
earnest money deposit by the appellant and the first respondent
be retained by the official liquidator and the earnest money
deposits made by the other unsuccessful bidders be returned.

6. On 19.12.2013, the official liquidator addressed a B
letter to the appellant referring to the order dated .17.12.2013
of the High Court and informed the appellant as under:

"With reference to the subject cited above, I have to state
that pursuant to order dated 17.12.2013 passed by the c
Hon'ble High Court of Oujarat in Official Liquidator Report
No.43 of 2013, the sale of Freehold land of the
company in Liquidator (sic liquidation) ad measuring
13895 sq. mtrs. approx. at T.P. No.18, F.P. No.32/P,
bearing Survey No.25, 27-B/1, 31, 38, Moje Rajpur - D
Hirpur, Outside Raipur Gate, behind New Cloth Market,
Opp. Hirabhai Market, Diwan Ballubhai Road, Raipur,
Ahmedabc;id is confirmed in your favour for Rs.148
Crores. A copy of.said order is enclosed herewith for
your ready reference and perusal. In this connection, E
you are requested to deposit sale proceed 25% i.e.
Rs.37 .00 Crores on or before 16.02.2014 and balance .
remaining 75% i.e. Rs.106.50 Crores on or before

P, bearing Survey No.25, 27/B/1, 31,-36, Moje Rajpur Hirpur, Outside Raipur Gate, F
behind New Cloth Market, Opp. Hirabhai Market, Diwan Ballubhai Road, Raipur,
Ahmedabad.
8. Ms. Amee Yajnlk, learned counsel for the Official Liquidator, Mr. D.S. Vasavada,
learned counsel for respondent No.6 - Union, Mr. U.R. Bhatt, learne~ counsel for
respondent No.1 - State Bank of India and Mr. Anip Gandhi, learned counsel for. the G
ARCIL, have expressed that the bid of M/s. Vedica Procon Pvt. Ltd. may be accepted.
9. In view of the aboVe discussion, the bid of M/s. Vedica Procon Pvt. Ltd. being the
highest bidder, .who has offered Rs.146 Crores for the land mentioned in the tender
notice deserves to be accepted and is hereby accepted as per the tender conditions
on as is where is basis and whatever there is basis. H
1106 SUPREME COURT REPORTS [2015] 8 S.C.R.

A 16.04.2014, after adjusting Rs.4.50 Crores behind EMD
in final payment of sale proceed. You are, therefore,
requested to kindly deposit the sale proceed with
this office, within stipulated time given by the Hon'ble
. High Court of Gujarat in terms of order dated
B 17.12.2013 and Tender document."

[emphasis supplied]

7. Pursuant to the said letter, the appellant deposited
c on 06.01.2014 an amount of Rs.37 crores being 25% of the
purchase price by Demand Draft drawn on ICICI Bank.

8. By letter dated 09.1.2014, the first respondent
requested the official liquidator to refund its earnest money
deposit. The relevant portion of the letter reads as follows:
0
"5. As. per condition no.29 of Tender Document, the
EMD of second highest bidder i.e. Baleshwar Greens
Pvt. Ltd. was to be returned after 25% of the sale
consideration is deposited by the successful bidder.
E
6. We have come to know that successful bidder M/s.
Vedia Procon Pvt. Ltd. has deposited 25% of the sale
consideration in the office of Official Liquidator.
7. Therefore we hereby request you to kindly refund
F our EMO of Rs.4.5 Cr and late fees of Rs.23.5 lakhs at
the earliest.
[emphasis supplied)
9. Admittedly, the EMO of the first respondent was
G returned.

10. On 16.01.2014, the appellant informed the official
liquidator that they had deputed security persons to "protect
the possession" of the property in question for various reasons
H detailed in the said letter. In response, the official liquidator by
VEDl(;A PR OCON PRIVATE LTQ. v. BALLESHWAR 1107
GREENS PVT. LIMITED [J. CHELAMESWAR, J.)

its letter dated 24.01.2014 informed the appellant inter alia A
as follows:
. ~~

"Besides this it is brought to your notice that the
..-
office of
the Official Liquidator has already deployed security at
the mills premises of the company in Li~uidation. B
However, keeping in view the facts and apprehension
stated by you in the aforesaid letters, if you so desire,
you can post your security outside the premises
purchased by you to protect your interest and avoid the
possibility of any casualty under the control and C
supervision of the security posted by official liquidators
office at your risk, cost and consequence in addition to
existing security arrangement made by this office." ·

. 11. On 25.03.2014, the appellant filed an application .
0
before the High Court seeking extension of time to deposit
the balance consideration of Rs.106.5 crores. The said
application was allowed after hearing the secured creditors,
by an order dated 31.03.2014, extending the time for payment
up to 31.07.2014. However, the appellant deposited the entire E
balance amount of Rs.106.5 crores on 16.04.2014 without
availing the benefit of the extended time by the order of the
High Court (referred to supra). The said fact is acknowledged
by the official liquidator in his letter dated 16.04.2014 calling
upon the appellant to take over the possession of the said F
land on 17 .04.2014 at 11.30 am in presence of the
representatives of the official liquidator. The relevant portion
of the letter reads as follows:

"Accordingly, you have deposited the entire full sale
G
consideration i.e. Rs.148.00 Crores with this office.
In this connection, you are requested to depute your
authorized representative at freehold land admeasuring
13895 Sq. Mtrs. Approx. situated at T.P. No.18, F.P.
No.32/p, bearing Survey No.25, 27-8/1, 31, 38 Moje H
1108 SUPREME COURT REPORTS (201_5] 8 S.C.R.

A Raipur-Hirapur, Outside Raipur Gate, behind New Cloth
market, Opp. Hirabhai market, Diwan Ballut;>hai Road,
Raipur, Ahmedabad for taking over possession of the
said land on 17.04.2014 at 11.30 am.when the
representatives of this office will remain present for
B handing over possession of the said land to you, in terms
of order dated 17.12.2013 passed by the Hon'ble High
Court of Gujarat in Official Liquidator Report No.43 of
2013." [emphasis supplied]

C 12. The first respondent preferred OJ Appeal No.9/
2014 against the order dated 31.03.2014 of the High Court
granting extension of time to deposit the balance amount by
the appellant. In the said appeal, the first respondent
expressed its willingness to raise its offer to an amount of
D Rs.160 crore for the land in question and also offered to
deposit the said amount within 72 hours.

13. On 17.04.2014, a possession memo was drafted
purporting to handover the property in question. It appears
E from the copy of the said possession memo that it was signed
by two UDC officials of the Official Liquidator by name S. R.
Meena, STA and C.G. S. Karki and one Ganesna
Venkataramana on behalf of the appellant. The first respondent
disputes the fact that the possession of the property in question
F was infact delivered to the appellant herein. However, the
Division Bench of the High Court by the impugned order found
no substance in the objection of the first respondent:
" ... Though it is disputed by the present application, the
record reveals that on 17.4.2014 when O.J.Appeal No.9
G
of 2014 came to be heard and disposed of by the
Division Bench of this Court, the Official Liquidator
handed over the possession of the lands in question to
opponent No.9. However, it is an admitted position that
H ·the sale deed is not executed .... "
VEDICA PROCON PRIVATE LTD. v. BALLESHWAR 1109
GREENS PVT. LIMITED [J. CHELAMESWAR, J.)

14. The first respondent's appeal (OJ Appeal No.9/ A
2014) was disposed of by an order2 dated 17.04.2014 by
issuing directions. The substance is:
1. That the first respondent herein would move an application
before the learned Coinpany Judge showing his desire "to 8
apply afresh for the bid";
2. That the parties are directed to maintain status quo till such
a period; -
3. The respondent herein is directed to handover a DD of C
Rs.160 crores to the Deputy Official Liquidator;
4. That it would be open to the learned Single Judge to decide
the application of the respondent herein (if made) on merits.
2
1. The appellant before us will move before the learned Company Judge within a D
period of one week with an appropriate application showing his desire ta· apply afresh
for the bid, as according to Mr. Trivedi, the order dated 17.12.2013 is not finalized and
it still requires confirmation of the learned Single Judge. Be that as it may, if the
application ts not made within one week, the benefit of this order will not ensure for the
. benefit of present appellant. The parties are directed to maintain status-quo till the
appellant files an application before the learned Single Judge and the learned Company E
Judge shall decide the question of interim relief on merits.
2. The appellant shall handover the Demand Draft of Rs.160 crores to Mr. R.C. Mishra,
Deputy Official Liquidator, who is present in the Court, today its•lf. The Deputy Official
Liquidator has accepted it and shall pass the receipt of the. same ta the oresent
appellant. The Official Liquidator shall see that the amount is kept in Fixed Deposit at F
least for one month so that there is no loss of interest.
3. It goes without saying that we have not entered into the merits of the matter and the
deposit of Rs.160 crores with Official Liquidator is without prejudice to the rights ·and
contentions of the parties and we have adopted this only because of the view expressed
by the Apex Court in the case of Shradhha Aromatics Private Limited (supra). G
4. It goes without saying that once the application is made, it will be open for the
learned Single Judge to decide the same on merits. The status-quo thereafter will be
subject to the order which may be passed by the learned Single Judge after hearing
the parties.
5. The order dated 31.03.2014 passed in Misc. Civil Application No.53 of 2014 by the H
learned Company Judge is inteifered with to the above extent only.
1110 SUPREME COURT REPORTS [2015] 8 S.C.R.

A 15. In order to complete the narration offacts, it may be
mentioned herein that the appellant herein moved a review
application Misc. CA No.90 of 2014 O.J. Appeal No.9 of 2014
before the Division Bench of the High Court which was partly
allowed making some minor modification in the order dated
B 17 .04.2014, the details of which may not be relevant for our
purpose.

16. Pursuant to the order dated 17.04.2014, the first
respondent moved an application OJMCA 89 of 2014 seeking
C recall of the order dated 17.12.2013 on various grounds. The
said application was allowed by an order dated 11.08.2014.
By the said order, the learned Single Judge had set-aside the
sale made in favour of the appellant herein on 17.12.2013 and
ordered the return of the amount already paid by the appellant.
D The learned Single Judge also directed a fresh auction of the
property in question. He also directed the first respondent to
pay an amount of Rs.25 lakhs to the appellant herein.

17. Aggrieved by the order dated 11.08.4014, the
E appellant carried the matter to the High Court in O.J. Appeal
No.36 of 2014 which was dismissed by the Division Bench
vide order dated 04.12.2014. The said order is the subject
matter of SLP (Civil) No.2198 of 2015. The appellant also
chose to prefer SLP (Civil) No.10148-10149 of 2015 against
F the order dated 17.04.2014 passed in o:J. Appeal No.9 of
2014 as modified vide order dated 22.04.2014 passed in
Review Application (Misc. Civil Application No.90 of 2014).

18. The order dated 17.04.2014 of the Division Bench
G of the High Court is passed in appeal (OJA No.9 of 2014)
preferred by the first respondent against the order dated
31.03.2014 with leave of the Division Bench. The only ground
on which the respondent challenged the order of the learned
Single Judge granting extension of time in favour of the
H appellant herein for depositing the balance sale consideration
VEDICA PROCON PRIVATE LTD. v. BALLESHWAR 1111
GREENS PVT. LIMITED [J. CHELAMESWAR, J.]

was that the first respondent had been deprived of making a A
better offer. According to the first respondent, he believed that
the appellant herein would faithfully comply with the tender
conditions and the earlier order of the Court in terms of which
the appellant was bound to deposit the entire sale consideration
on or before 16.01.201~. If only the respondent had known B
that the time schedule for the payment of sale consideration is
flexible even the respondent would have offered price highe'r
than what had been offered (Rs.148 crores) by the appellant.

19. The Division Bench without examinin~"or C
recording any finding ih regard to the tenability of the
submissions made by the respondent chose to dispose of tile·
matter with certain directions which are already extracteg ln
the earlier part of this judgment. The reason given by the
Division Bench for such an order is that the Division Bench D
has adopted such a course of action in. view of an earlier
decision of this Court in Shradhha Aromatics Private Limited
v. Official Liquidator For Global Arya Industries Limited &
Others, (2011) 6 sec 207.
E
20. The Division Bench recorded the submission
made by the first respondent that by order dated 17.12.2013,
the Company Judge accepted only the offer of Rs.148 crores.
made by the appellant herein but no order of confirmation of
sale was made. But the Division Bench did not record any F
finding whether such a submission was accepted or not. Frcim
the order, it appears that the Division Bench was greatly
influenced by the fact that the first re"spondent was willing to
enhance the bid to Rs.160 crores.
G
21. From direction No.3 contained in the order, it is
clear that the Division Bench did not adjudicate the rights of
the .respective parties.
.
At the cost of repetition, we reproduce
-~fl{

direction No.3 as under: •-:..
·I:''''" H
1112 SUPREME COURT REPORTS (2015] 8 S.C.R.

A "3. It goes without saying that we have not entered
into the merits of the matter and the deposit of Rs.160
crores with Official Liquidator is without prejudice to the
rights and contentions of the parties and we have
adopted this only because of the view expressed by the
B Apex Court in the case of Shradhha Aromatics Private
Limited (supra)."

[emphasis supplied]

c A procedure which is-not very desirable. It is inconsistent with
the principle that the judicial process and adjudication demand
certainty and finality.

22. Pursuant to the abovementioned direction of the
. Division Bench, the learned Company Judge, on an application
0
filed by the first respondent, by his order dated 11.08.2014,
recalled the order dated 17.12.2013 and set aside the sale
made in favour of the appellant. When the said order was
challenged by the appellant herein before the Division Bench
E of the High Court, the same was dismissed by the impugned
judgment.

23. It is interesting to notice that the respondent in its
application took various grounds (for setting aside the order
F dated 17.12.2013 of the Company Judge) other than the ground
which the respondent pleaded in its earlier appeal OJA No.9
of2014. This time the respondent pleaded:

1. That there was a change in the share-holding pattern
of the appellant company which amounted to the
G violation of condition no.31 of the tender notice which
provided that the nomination would not be allowed by
the successful bidder;

2. That by virtue of a subsequent event the value of the
H land in question was likely to fetch a much higher price
VEDICA PR OCON PRIVATE LTD. v. BALLESHWAR 1113
GREENS PVT. LIMITED [J. CHELAMESWAR, J.]

than the price at which the property was sold on A
17.12.2013: The event being the revision of certain
regulations (the Gujarat Town Planning and Urban
Development Act, 1976) whereby the Floor Space
Index (FSI) for construction applicable to the area in
which the property in question is located had been B
increased from 1.0_to 1.8. In other words, in view of the
revised regulations, it would be open to construct a
much larger built up area on the property in question
than what was permissible as on 17.12.2013.

24. Two factors weighed heavily before the Company
Judge for recalling the earlier Order dated 17.12.2013 by his
Order dated 11.8.2014. They are: (i) by a notification dated
04.03.2014 of the Government of Gujarat, the FSI applicable
to the area in which the land is located is increased from 1.0 D
to 1.8. As a consequence, the value of the property in question
increased considerably, (ii) that during the pendency of the
recall application, the first respondent herein, who had already
deposited an amount of Rs. 160 crores as a condition
precedent for filing the recall application, further enhanced his E
offer by another Rs. 40 crores, pursuant to the order of the -
Company Court dated 9.5.2014 and deposited the said
amount, and it appears thatthe respondent agreed to further
enhance the offer by another Rs.14 crores, making it a total of F
Rs. 214 crores. ·

25. In view of the above-mentioned two facts, the High
Court recorded the conclusion that the Company Judge's order
dated 17.12.2013 (accepting the bid of the appellant herein
of Rs. 148 crores) is vitiated (i) by an irregularity inasmuch as G
the Company Judge failed to take note of the potential value
of the land and the possibility of its fetching a higher price than
Rs. 148 crores, (ii) the bid of the appellant herein of Rs.148
crores was an inadequate price to the property in question, H
(iii) because of the failure of the company court to discharge
1114 SUPREME COURT REPORTS [2015] 8 S.C.R.

A its obligation (as custodian of the properties of a company in
consideration) to secure the best price possible, when the
assets of the company in liquidation are sold, (iv) when the
facts and circumstances indicate that the property in question
is in fact capable of securing a much higher price, the sale of
B the property at a lesser price also resulted in an injury to the
interest of various stakeholders who are entitled for the
distribution of the proceeds of the sale of the assets of the
company in liquidation.

C 26. The learned counsel forthe appellant submitted that
th,e impugned order is untenable for the following reasons:-

(i) That the offer of Rs. 148 crores made by the appellant and
accepted by the Company Court was the best price for the
D land having regard to the facts and circumstances as they
existed on that date of the order i.e. 17.12.2013. The factthat
some two and a half months later (on 4.3.2014), the
Government of Gujarat decided to increase the FSI which
resulted in increase in the value of the land in question can
E legally never be a relevant consideration for determining the
regularity and the legality of the order dated 17.12.2013, (ii)
the Division Bench chose to recall the order dated 17.12.2013
on erroneous logic and recorded an untenable conclusion:

F " ... .However, it is required to be noted that the averments
in the application before the learned Company Court by
respondent No. 1 herein - original applicant that
everybody was aware of change/increase in FSI, but it
was not brought to the notice of the lei;irned Company
G Court, considering the submissions made by the
appellant before the learned Company Court recorded
in the impugned order, it does not appear that the
·aforesaid was disputed by the appellant. As observed
tierein above and even at the cost of repetition it is to be
~·

H noted that the learned Company Court has recalled its
VEDICA PR OCON PRIVATE LTD. v. BALLESHWAR 1115
GREENS PVT. LIMITED [J. CHELAMESWAR, J.]

earlier order dated 17.12.2013 accepting the higher offer A.
of the appellant of Rs. 148 crores and the relevant factors
like potential development of the land were not considered
which had a direct bearing .on the determination of the
market price .... "
B
27. The learned counsel argued that the submission
made by the first respondent herein that everybody knew ttie
fact which was not in existence as on 17.12.2013 could nbt
· have been accepted by the High Court on the ground that the
appellant herein did not specifcally dispute the same. Such a· C
logically at>Surd submission was made and the first respondent
- ·• j

made no effort to prove such an assertion though in law frie
burden of proving such an assertion lies on the maker of suc:;h.
assertion.
D
28. The learned counsel submitted that assuming for
the sake of argument that the conclusion recorded by the
Division Bench is legally tenable, such a conclusion is based
on the plea of the respondent herein that "everybody was aware
of the change/increase in FSI, but it was not brought to the E
notice of the learned Company Court ...... " necessarily implies
that even the first respondent herein was aware of it and he
also failed to bring that fact to the notice of the Company Court.
Obviously, the only inference that can be drawn from the
conduct of such respondent is that it would disentitle the F
respondent to seek any remedy from the court.

29. It is further submitted that the conduct of the
respondent in writing t6 the official liquidator on 9.1.2014
claiming the refund of his EMO without indicating even at that G
stage that the land in question is more valuable than Rs. 148
crores and that the first respondent was willing to make a higher
offer would only go to show that all the allegations made in the
recall application are tailor made to suit the convenience of
the respondent in view of the increase in the FSI and the H
1116 SUPREME COURT REPORTS (2015] 8 S.C.R.

A consequential escalation of the price of the property in
question.

30. The learned counsel argued that no doubt the
subsequent events made the property in question more
B valuable, ·but such subsequent events are wholly irrelevant in
determining either the adequacy of the bid made by the
appellant on the relevant date or the regularity and legality of
the order dated 17.12.2013 of the Company Judge in
assessing the injury to the stakeholders.
c
31. In the alternative, it is submitted on beftalf of the
appellant that in the absence of any plea and proof that sale
was vitiated by fraud, the inadequacy of consideration
especially when none of the stakeholders in the company
o liquidation raised such an objection on 17.12.2013 can never
be a ground for recalling an order of accepting the highest bid
at the instance of an unsuccessful bidder on a subsequent date
on the ground that on a subsequent date such unsuccessful
bidder is willing to offer higher price. Approving such course
E of action would denude the proceedings of a court of law and
the sales undertaken in the course of judicial proceedings, of
all element of certainty and finality. Such uncertainty would be
a disincentive for genuine prospective purchasers. It adversely
affects the possibility of attracting best offers in court sales
F and would be detrimental to the public interest

32. On the other hand, it is argued by the learned counsel
forthe first respondent that (i) the substantial hike in the offer
made by the first respondent (Rs.66 crores) is a relevant factor
G as the benefit of such enhanced price would go to all the
stakeholders in the company in liquidation. Therefore, the High
Court rightly recalled the order dated 17.12.2013. (ii) by the
impugned order, the first respondent is not going to get the
property in question, but it only throws open for everybody an
H opportunity to participate in the fresh auction to be conducted;
VEDICA PROCON PRIVATE LTD. v. BALLESHWAR 1117
GREENS PVT. LIMITED [J. CHELAMESWAR, J.]

(iii) the property would still be sold to the highest bidder, (iv) A
but in the process all the stakeholders would be benefited.
Therefore, the impugned order calls for no interference.

33. It is also submitted on behalf of the first respondent
that there is no confirmation of the sale in favour of the appellant s
herein though the order dated 17.12.2013 recorded that the
highest bid by the appellant is accepted by the Court.
Acceptance of the bid is different from confirmation of the sale.
Confirmation of sale requires an active application of mind by
the court to ensure that there is no irregularity in the conduct of C
the sale and the price fetched is the best price for the value of·
the property. It is al.so argued on behalf of the respondent that ·
the company court being the custodian of the property of the
company in liquidation, should always make an endeavour to
secure the best price for the property put to sale in order to D
give maximum benefits to all the stake holders who are entitled
for the distribution of sale proceeds of the assets of the
company in liquidation.

34. In support of the submission that a concluded sale E
in an auction by the court cannot be reopened except on the
ground of fraud, learned counsel for the appellant relied upon
a judgment of this Court reported in Valji Khimji & Company
v. Official Liquidator of Hindustan Nitro Product (Gujarat)
Limited & Others, (2008) 9 SCC 299. It was a case where F
the properties of a company in liquidation were put to sale in
an auction. In the said auction, the highest bid was Rs.3.51
crores which was accepted by the court and the sale was
confirmed. The court directed the auction purchaser to pay
the consideration in certain instalments. Some two and a half G
months later, a third party sent a letter to the official liquidator
offering a higher amount of Rs.3.75 crores. Almost a year
later, another party offered an amount of Rs.5 crores.
Subsequently, both the parties approached the Company H
Judge seeking a recall of the order of co1firmation of the sale.
1118 SUPREME COURT REPORTS (2015] 8 S.C.R.

A Such application was allowed by the Company Court. The
auction purchaser unsuccessfully carried the matter in an intra
court appeal and finally landed up in this Court. This Court
allowed the appeal upholding the order confirming the sale.
This Court held:
B
"11. It may be noted thatthe auction-sale was done after
adequate publicity in well-known newspapers. Hence, if
anyone wanted to make a bid in the auction he should
have participated in the said auction and made his bid.
C Moreover, even afterthe 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
D on very limited grounds like fraud, otherwise no auction-
sale will evl?r be complete."

35. On the other hand, .learned counsel for the first
re·spondent relied upon decisions of this Court in Navalkha &
E Sons v. Sri Ramanya Das & Others, (1969) 3 SCC 537,
Divya Manufacturing Company (P) Ltd. v. Union Bank of
India & Others, (2000) 6 SCC 69, FCS·Software Solutions
Ltd. v. LA Medical Devices Ltd. & Others, (2008) 10 SCC
440, ShradhhaAromatics Pvt. Ltdv. Official Liquidator for
F Global Arya Industries Limited & Others, (2011) 6 SCC
207 and Manoj I Naik & Associates v. Official Liquidator,
(2015) 3 sec 112.

36. In Navalkha & Sons v. Sri Ramanya Das &
G Others, (1969) 3 SCC 537, certain moveable and immovable
properties of a company in liquidation were brought to sale.
The Company Court directed the sale to be conducted by three
persons jointly appointed as Commissioners for the conduct
of sale. The sale was conducted. The appellant before this
H Court was the only offerer. The offer was accepted by the
VEDICAPROCON PRIVATE LTD. v. BALLESHWAR 1119
GREENS PVT. LIMITED [J. CHELAMESWAR, J.]

Commissioners. The Commissioners made an application A
to the Company Court for the confirmation of sale. Atthat stage,
a third party made an application claiming that he was willing
to offer a higher price. The Company Court then decided to
put the property once again for auction but only between the
original offeror and the objector. In such a process, the original B
offeror once again became the highest bidder. That bid was
accepted by the Company Judge. At that stage, another third
party came forward objecting to the procedure adopted by the
High Court for confining the auction only between the two
parties without any fresh advertisement. Such an objection C
was rejected by the Company Judge. Aggrieve'd by the same,
the objector carried the matter in an intra court appeal to the·
Division Bench successfully. Hence the ap~e·a·I before this
Court by the original offeror. This Court dismi~sed the appeal D
approving the view of the Division Bench that the procedure
adopted by the learned single Judge was ~not legally
sustainable. In the process, this Court indicated the principles
governing the confirmation of sales conducted_by t~e Company
Courts by the official liquidators. ,,.,. 1- E

"6. The principles which should govern confir!nation of
~---.,....

sales are well-established. Where the acceptance of the
offer by the Commissioners is subject to con'firmation of
the Court the offeror does not by mere acceptance get
F
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 G
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 val.ue 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 H
1120 SUPREME COURT REPORTS [2015] 8 S.C.R.

A would not be a proper exercise of judicial discretion. In
Gordhan Das Chuni Lal v. S. Sriman Kanthimathinatha
Pillai, AIR 1921 Mad 286, it was observed that v.ihere
the property is authorised to be sold by private contract
or otherv-iise it is the duty of the Court to satisfy itself that
B 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
c had to the interests of the Company and its creditors as
well. This principle was followed in Rathnaswami Pillai
v. Sadapathi Pillai, Al R 1925 Mad 318 and S. Soundajan
v. Mis. Roshan& Co., AIR 1940 Mad42. lnA. Subbaraya
Mudaliarv. K.Sundarajan, A.l.R. 1951Mad1986, it was
D
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
E 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 suggestio~ of irregularity or fraud.
It is well to bear in mind the·other principle which is equally
F 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 Rosh an
G & Co's case)."

37. Divya Manufacturing Company (P) Ltd. v. Union
Bank of India & Others, (2000) 6 sec 69 was a case where
the assets of the company in liquidation were s·oJd in favour of
H the appellant before this court and the sale was confirmed by
VEDICA PR OCON PRIVATE LTD. v. BALLESHWAR '1121
GREENS PVT. LIMITED [J. CHELAMESWAR, J.)

the Company Court. Within a week thereafter, an application A
came to be filed by one of the participants in the auction
proceedings praying that the order of confirmation be recalled
and the applicant was willing to offer an amount higher than
what was offered by the appellant before this Court.
Subsequently, more number of applications came to be filed B
before the Court offering higher amounts. Therefore, the
Company Court recalled the order confirming the sale. Hence,
the appeal before this Court. This Court, while reiterating the
principles laid down in Navalkha case (supra), declined to ·c
interfere with the order of the court and held as follows:

"16 .....As stated above, neither the possession of the
property nor the sale deed was executed in favour of the
appellant. The offer of Rs.1.30 crore is tot<!llY inadequate
in comparison to the offer of Rs.2 crores and in case D
where such higher price is offered, it wouJd be in the
interest of the Company and its creditors to set aside
the sale. This may cause some inconvenience or loss to
the highest bidder but that cannot be helped in view of
the fact that such sales are conducted in Court precincts E
and not by a bu!?iness house well versed wit~ the market
forces and price. Confirmation of the sale by a Court at a
grossly inadequate price, whether or not it is a
consequence of any irregularity or fraud in the conduct of
F
sale, could be set aside on the ground that it was not just
and proper exercise of judicial discretion. In such cases,
a meaningful intervention by the Court may prevent, to
some extent, underbidding at the time of auction through
Court. In the present case, the Court has reviewed its G
exercise of judicial discretion within a shortest time."

38. We cannot help pointing out that their Lordships
came to such a conclusion placing. reliance on para 6 of
Navalkha case (supra). Their Lordships failed to take note of H
1122 SUPREME COURT REPORTS [2015) 8 S.C.R.

A the last sentence of the paragraph but placed reliance on the
penultimate sentence of the paragraph. No doubt, the
penultimate statement of the paragraph recognises the
discretion of the Company Court either for accepting or
refusing the highest bid at the auction, it also emphasizes the
B obligation of the Court to see that the price fixed at the auction
is adequate price even though there is no irregularity or fraud
in the conduct of the sale. However, the penultimate sentence
restricts the scope of such discretion in the following words:

c "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 cpnfirmation of the sale or offer already received.
D (See the decision of the Madras High Court in Roshan
& Co's case."

39. In other words, in Navalkha case, this Court only
recognized the existence of the discretion in the Company
E Court either to accept or reject the highest bid before an order
of confirma.tion of the sale is made. This Court also
emphasized that it is equally a well-settled principle that once
the Company Court recorded its conclusion that the price is
adequate, subsequent higher offer cannot be a ground for
F refusing confirmation.

40. In FCS Software Solutions Ltd. v. LA Medical
Devices Ltd. & Others, (2008) 10 SCC 440, the property of
a company in liquidation was brought to sale and confirmed
G by the company court. The Company Court directed the official
liquidator to deliver possession of the property after executing
the sale deed in favour of the successful bidder after receiving
full and final payment. The official liquidator instead of delivering
the possession of the property, filed an application before the
H Company Court saying that he had received two higher offers.
VEDICAPROCON PRIVATE LTD. v. BALLESHWAR 1123
GREENS PVT. LIMITED [J. CHELAMESWAR, J.]

Upon such application, the Company Court stayed the delivery A
of the possession of the property. The successful bidder
moved the Company Court praying that the liquidator be
·directed to execute the sale deed and deliver the possession
of the property. However, the Company Court directed the
official liquidator to issue fresh advertisements. Pursuant to B
fresh aqvertisement, much higher offers were received. The
original purchaser unsuccessfully challenged in an intra court
appeal the decision of the Company Judge to reopen the
concluded proceedings and thereafter approached this Court.
This Court rejected the case of the original purchaser on the C
ground that in the proceedings which culminatectfn the sale in
favour of the appellant before this Court, there were certain
irregularities and that the Company Judge failed-tci'notice such
irregularities until such irregularities were brou'gntto his notice D
by the third parties who subsequently offered higher price .
. .J~··' ~

"28 .... From the facts stated above, it is clear that in
November, 2004, the bid of the appellant was highest
and was accepted by the Official Liquidator. But
it is also
E
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 disdosed at
the time of sale notice. They related to valuation of
movable and immovable properties, fixation of reserve
F
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 himself, ordered fresh auction. We find no G
illegality in the said approach. When fresh bids were
received, it was found that the highest offer was of
respondent No. 3-Society which was of Rs.3.5 crores.
The Company Judge extended an opportunity to the
appellant to raise its bid. It, however, appears that the H
1124 SUPREME COURT REPORTS [2015) 8 S.C.R.

A appellant was adamant to get the property for Rs.1.4 7
crores on the ground that the said offer was highest and
all the proceedings taken by the Official Liquidator and
Company Judge thereafter were totally illegal and
unlawful. In our opinion, the respondents are right that in
B such cases, the approach of the Company Judge should
be to get highest price so as to satisfy maximum claims
against the Company in liquidation. The procedure
followed by the Company Judge, therefore, cannot be
said to be illegal."
c
41. In Shr;f!dhha Aromatics Pvt. Ltd v. Official
Liquidator for Global Arya Industries Ltd & Others, (2011)
6 SCC 207, the Company Judge approved the highest bid of
the 2nd respondent before this Court for the purchase of the
D property of a company in liquidation. Subsequently, an
application came to be filed by a third party offering a higher
amount for the property which was rejected by the Company
Court. However, a second application was filed by the same
third party with a further enhancement of the offer. This time,
E the Company Judge thought it fit to recall its earlier order
confirming the sale in favour of the above mentioned 2nd
respondent by placing reliance on the judgment of this Court
in Divya Manufacturing Company (supra). Aggrieved, the
F original purchaser carried the matter in an intra court appeal
before the Division Bench. Once again, the Division Bench
permitted both the parties to give further offers. However, after
such a strange exercise, the Division Bench opined that learned
Company Judge could not have recalled the confirmed sale
G because subsequently a higher price was offered by
somebody else. Even before this Court, an intervener made a
better offer.. It may be mentioned here that there was a time
gap of more than three years between the original confirmation
and such subsequent higher offer made in this Court. However,
H this Court disposed of the appeal accepting the much higher
VEDICAPROCON PRIVATE LTD. v. BALLESHWAR 1125
GREENS PVT. LIMITED [J. CHELAMESWAR, J.]

offer made by the intervener in this Court and directing the A
execution of the sale deed in favour of such intervef!Orforthe
following reasons:
"15. We have considered the respective submissions
and carefully perused the record. Ordinarily, the Court is B
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 c
rule. Admittedly, total area of the land advertised by the
Committee is 12,500 square meters and the same is
situated in an important district of Gujarat. It is also not in
dispute that the area has been substantially developed
in the last four years. The initial offer made by Mis Patel D
Agro Diesel Ltd. was of Rs. 83 lakhs and the highest
revised offer given before the learned Company Judge
was of Rs. 1.27 crores. After acceptance of the revised
offer by the learned Company J.!Jdge, the appellant
stepped in and made an offer to pay Rs. 1.41 crores. E
The first application filed by it was dismissed but the
second application was allowed and·the increased offer
of Rs. 1.51 crores was accepted by the learned Company
Judge vide order dated 27-11-2007. That order did not
find favour with the Division Bench, which restored the F
first order passed by the learned Company Judge. If the
order of the Division Bench is sustained, the creditors of
the Company are bound to suffer because the amount
available for repayment of the dues of the creditors would
G
be a paltry sum of Rs. 1.27 crores. As against this, if the
offer made by the intervenor-cum-promoter is accepted,
the Official Liquidator will get an additional amount of
more than Rs. 4.25 crores. The availability of such huge
amount will certainly be in the interest of the creditors H
1126 SUPREME COURT REPORTS [2015] 8 S.C.R.

A including GSllC. Therefore, it is not possible to approve
the order passed by the Division Bench of the High Court.
In a somewhat similar case-FCS Software Solutions
Ltd. v. La Medical Devices Ltd., (2008) 10 SCC 440,
this Court approved the acceptance of revised bid of Rs.
B 3.5 crores given by the appellant with a direction to
compensate the earlier highest bidder by payment of the
specified amount."
[emphasis supplied]
c As indicated in the above extract, such a decision was
rendered on the PECULIAR FACTS of that case.

42. Manoj I Naik &Associates v. Official Liquidator,
(2015) 3 sec 112, once again was a case where certain
D properties of a company in liquidation was brought to sale.
The company Judge declined to accept the highest offer
received on the ground that the value of the property would be
much higherthan what was offered. Eventually, when the matter
reached this Court at the instance of the highest bidder, the
E highest bidder himself substantially raised his offer whereas
certain other respondents also offered much higher amounts
for the property. From the judgment, it appears that there was
virtually a scramble for the property, each of the parties to the
F proceedings offering very high prices. While the original
successful bidder's offer was only Rs.1.3 crores, by the time
the matter was heard and disposed of by this Court, it reached
an amount of Rs.70 crores. Once again, it must be noticed
that there is a time gap of almost a decade. It is not possible
G to cull out from the judgment the actual date of the auction by
the official liquidator.

43. But the fact remains that one of the secured
creditors objected to the sale in favour of the appellant before
this Court on the ground that the value of the property even on
H the date of the original sale was worth around Rs.6.25 crores
VEDICA P.ROCON PRIVATE LTD. v. BALLESHWAR 1127
GREENS PVT. LIMITED [J. CHELAMESWAR, J.)

as against the highest offer of Rs.1.3 crores of the appellant A
herein. Therefore, the decision of the Company Judge to reject
the highest offer is perfectly justified.

44. A survey of the abovementioned judgments relied
upon by the first respondent does not indicate that this Court··· B
has ever laid down a principle that whenever a higher offer is
received in respect of the sale of the property of a company in
liquidation, the Court would be justified in reopening the
concluded proceedings. The earliest judgment relied upon by
the first respondent in Navalkha & Sons (supra) laid down C
the legal position very clearly that a subsequent higher offer is
no valid ground for refusing confirmation of a sale or offer
already made. Unfortunately, in Divya Manufacturing
Company (supra) this Court departed from the principle laid
down in Navalkha & Sons (supra). We have already D
explained what exactly is the departure and how such a
departure was not justified.
45. Coming to the decision in FCS Software
Solutions Ltd., we have already noticed that this Court rightly E
reopened the finalized sale on the ground that there was
material irregularity in the conduct of the sale.

46. Shradhha Aromatics (supra), as already noticed,
is a decision rendered on the peculiar facts of the case and, in F
our opinion, does not lay down any principle applicable across
the board. Whereas in Manoj I Naik (supra) the Company
· Court itself declined to accept the highest offer, therefore, it
has no relevance in the context of the case on hand.
G
47. In our opinion, in the case on hand, the High Court
was not justified in recalling the order dated 17.12.2013 for
following reasons:

48. Tl:'ie highest bid of the appellant herein was H
accepted by the Company Court and all the stake-holders of
1128 SUPREME COURT REPORTS [2915] 8 S.C.R.

A the company in liquidation were heard before such an
acceptance. Nobody ever objected including the first
respondent herein at that stage on any ground whatsoever,
such as, that there was any fraud or irregularity in the sale nor
was there any objection from any one of them that the price
B offered by the appellant herein was inadequate. No doubt,
the property in question became more valuable in view of the
subsequent development. In our opinion, it is not a relevant
consideration in determining the legality of the order dated
C 17.12.2013. Imagine, if instead of increasing the floor space
index for construction from 1.0 to 1.8 the State of Gujarat had
decided to reduce it below 1.0 subsequent to 17.12.2013,
could the appellant be heard to argue that it would be legally
justified in resiling from its earlier offer which was accepted by
the Court and not bound by the contractual obligation flowing
0
from such an offer and acceptance?

49. Certain incidental questions raised by the first
respondent are required to be answered at this stage.

E 50. The first respondent submitted that the order dated
17.12.2013 only accepted the highest bid but it did not
confirm the sale and, therefore, the Court is at liberty to
decline confirmation of the sale in view of the subsequent
developments. In our opinion, the said submission is to
F be rejected because there is no specific format in which
. a sale conducted by the official liquidator is to be
confirmed by the Company Court. The mere absence of
the expression "that the sale is confirmed" in the order
dated 17.12.2013 is not determinative of the question.
G The totality of the circumstances, such as, the very tenor
of the order (Footnote 1 supra) that none of the stake-
holders of the Company in liquidation ever objected to
the offer of the appellant herein on the ground that it is
inadequate consideration for the property; the fact that
H
VEDICAPROCON PRIVATE LTD. v. BALLESHWAR 1129
GREENS PVT. LIMITED [J. CHELAMESWAR, J.]

the official liquidator himself understood the order dated A
17 .12.2013 to be an order not only accepting the highest
bid of the appellant herein but also as an order confirming
the sale in favour of the appellant, as evidenced by his
letter dated 19.12.2013, (the relevant portion of which is
already extracted earlier) and the fact that the first B
instalment of the payment of 26% of the sale
consideration was accepted both by the official liquidator
and the Company Court without raising any objection for
the same and the fact that the first respondent withdrew
its earnest money deposit without raising any objection c
regarding adequacy of the price offered by the appellant
herein, in our view, clearly iricicate that the sale in favour
of the appellant was confirmed by the order dated
17.12.2013. Assuming for th_e sake of argument that
D
there is no confirmation, in the absence of any legally.
tenable ground for not confirming the sale, it cannot be
declined to the appellant as it was observed in Navalkha
case (supra) that "... no subsequent higher offer can
constitute a valid ground for refusing confirmation of E
the sale or offer already made".

51. The other submission made before the Division
Bench of the High Court and before us by the first respondent
that there was a change in the share-holding pattern of the F
appellant company subsequent to the order dated 17.12.2013
and that such a change would virtually amount to a nomination
by the successful bidder in favour a of third party contrary to
the conditions of the tender notice, in our opinion, does not
deserve any consideration. This was not the ground on which G
the first respondent initially sought recall of the order dated
17.12.2013. Such a recall was sought only on one ground, the
details for which are already noted earlier in this judgment.
The first respondent kept on adding new grounds from stage
to stage for attacking the order dated 17.12.2013. The conduct H
1130 SUPREME COURT REPORTS [2015] 8 S.C.R.

A of the first respondent is understandable. The value of the
property in question must have escalated substantially in view
of the developments subsequentto the order dated 17.12.2013
but allowing such an attempt, in our opinion, would rob the sales
conducted by the Courts of all sanctity.
B
52. For all the above-mentioned reasons, we allow the
appeals of the appellant Yedica Procon Private Limited, with
costs.
Nidhi Jain Appeals allowed.
c