WINGS WEAR WORKERS LAL JHANDA UNION v. WINGS WEAR PVT. LTD.

1. The property concerned in the present applications is plot No. 1818, Block B-II, Mohan Co-operative, Badarpur, New Delhi. On 1st November, 2018, this Court had reduced the reserve price to Rs. 5 Crores as the parties were ad-idem that the property was not being sold at a higher reserved price. The Court had permitted the Official Liquidator to publish a fresh sale notice 2019:DHC:6516 at a reserve price of Rs. 5 crores with 10% as the Earnest Money Deposit and auction was fixed for 11th January, 2019.

2. On 11th January, 2019, one bidder on behalf of M/s Lloyd Global Trade Private Ltd. had appeared in Court and had offered to buy the property at the reserve price of Rs. 5 crores. He was carrying a draft of Rs. 50 lakhs towards the earnest money. This Court had accepted the bid keeping in view the fact that when the earlier sale notice was published, no bids had been received. In this background, the Court had, after accepting the bid of M/s Lloyd Global Trade Private Ltd., directed them to make the balance payment towards the purchase price. A period of 90 days was granted to make the balance payment and the matter was listed for directions on 4th April, 2019.

3. Thereafter, an application was filed being Co. Appl. No. 337/2019 by M/s Conchem Construction Private Ltd. seeking recall of the order dated 11th January, 2019 on the ground that the offer of the sole bidder had been accepted at a knock down price and without fresh publication of the sale notice, which has caused prejudice to the interest of the Company, its employees, creditors including the applicant, who was the secured creditor. The applicant stated that he had a claim of Rs. 3,40,90,548.00 plus interest pending with the Official Liquidator and had acquired the financial assets/debt of the Company in Liquidation from Canara Bank, the erstwhile creditor. It was stated that the plot was situated at one of the prime industrial areas of the capital city and could fetch a much higher market value. Even going by the circle rates fixed by the MCD, the valuation would be Rs. 1,27,680/- per square meter i.e. the valuation would be at least four times the bid price of Rs. 5 crores. A direction was sought to recall the order dated 11th January, 2019 and direct the Official Liquidator to make fresh publication after cancelling the bid of M/s Lloyd Global Trade Private Ltd.

4. The said application was listed on 4th April, 2019 and notice was issued to M/s Lloyd Global Trade Private Ltd. and further process in respect of the earlier bid was put on hold.

5. Thereafter, Co. Appl. No. 475/2019 was filed by M/s Lloyd Global Trade Private Ltd. seeking an order to complete the sale in its favour without putting it on hold or changing the conditions of the said order. The locus of M/s. Conchem Construction Pvt. Ltd. to oppose the sale was questioned. Notice was issued on the said application on 3rd May, 2019. Thereafter another application being Co. Appl. No. 674/2019 was filed by M/s Lloyd Global Trade Private Ltd. seeking a direction to cancel all applications of M/s. Conchem Construction Pvt. Ltd. and a declaration that M/s. Conchem Construction Pvt. Ltd. could not be treated as a secured creditor. Notice was issued on the said application on 12th July, 2019.

6. On 18th July, 2019 this Court had recorded that pursuant to fresh advertisement at a reserve price of Rs. 6 crores a bid had been received from Watta Finance and Investment Company Private Ltd. for a sum of Rs. 6.11 crores. Bid was accompanied with a banker’s cheque of Rs. 60 lakhs towards earnest money deposit. The matter was then listed for arguments and was adjourned thereafter from time to time.

7. When the matter was taken up for hearing on 03.09.2019, learned counsel for the applicant in the recall application being Co. Appl. NO. 337/2019 submitted that she had instructions to withdraw the application. The Official Liquidator as well as the counsel for M/s Lloyd Global Trade Private Ltd. vehemently opposed the recall without putting the applicant to terms, as it was this application which had led to the property being put to fresh advertisement and the bid of M/s Lloyd Global Trade Private Ltd. being derailed for a long period of time.

8. Learned counsel for M/s Lloyd Global Trade Private Ltd. submitted that he was willing to deposit the balance amount of Rs. 3.75 crores and his bid be accepted again and sale of the plot be confirmed in its favour.

9. On 03.09.2019, orders were reserved in the present applications. The Official Liquidator was directed to give detailed calculation of the interest that would have accrued had the auction money being deposited within the stipulated period for confirmation of first sale. Some calculations were given on 07.11.2019, but there was no clarity on how the amount had been arrived at. The matter was listed for directions on 19.11.2019. Necessary clarifications were given by the learned counsel for the Official Liquidator on the said date.

10. I have heard the learned counsel for the parties and examined their submissions.

11. Co. Appl. No. 337/2019 is permitted to be withdrawn by the applicant subject, however, to the applicant depositing with the Official Liquidator an amount of Rs. 11,68,664/-. This amount has been worked out by calculating the interest that would have accrued on the sale consideration of Rs. 5 crores had the same been deposited with the Official Liquidator by 12th March, 2019 when the time for deposit ended. This Court is of the view that the applicant has unnecessarily delayed the process by filing a recall application and putting the process on hold and is now seeking to withdraw the application. The delay is thus of a period of 175 days. Taking the interest at the rate of 6.[5] % per annum, the applicant will deposit Rs. 11,68,664/- with the Official Liquidator within a period of four weeks as costs on account of withdrawing the application, for recall.

12. The bid of M/s Lloyd Global Trade Private Ltd. is hereby accepted. Since an amount of Rs. 1.25 crores has already been deposited by the auction purchaser, it would now make payment of the balance amount of Rs. 3.75 crores within a period of four weeks from today. After the balance amount has been received to the satisfaction of the Official Liquidator, the sale would stand confirmed in favour of M/s Lloyd Global Trade Private Ltd. The OL would execute the necessary title deeds in favour of M/s Lloyd Global Trade Private Ltd. within a period of two months, from the date of confirmation of the sale.

13. The present applications are disposed of in the aforesaid terms.