Page 1

1

NON-REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6541 OF 2016

[ @SPECIAL LEAVE PETITION (C) NO. 11159 OF 2011 ] JAWAHARLAL                                   Appellant(s)

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

J U D G M E N T

KURIAN, J.

1. Leave granted.   

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

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

Page 2

2

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

“We  have  heard  learned  counsel  for  the

parties and noted that the dues of Canara

Bank as well as workers is more than Rs.

8,00,00,000/-  (Rupees  eight  crores  only).

The proposals that have been given to this

Court do not exceed Rs. 6.5 crores.   

Under  the  circumstances,  the  appropriate

course  is to  auction all  the properties.

Necessary steps may be taken in this regard

immediately  and  the  auction  process  be

completed within eight weeks.   

List thereafter.”

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

“Learned  counsel  for  the  official

liquidator says that the auction has been

conducted  and  three  bids  were  received.

Learned counsel says that he would like to

file  a  status  report.   Further,  he  says

that the petitioner was the second highest

bidder and has moved the Company Court to

Page 3

3

increase the bid amount.   

Learned counsel appearing on behalf of the

petitioner says that since earlier an offer

of Rs. 6.5 crores was made in this Court,

his client is ready to make the deposit in

the  Registry  of  this  Court  without

prejudice to the rights and contentions of

the parties.   

Learned counsel for the highest bidder is

present in Court and would like to file an

application for appropriate directions.   

Status  report  may  be  filed  within  four

weeks from today and the deposit be made by

the petitioner within six weeks from today.

List the matter in July, 2015.”

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

“The application for intervention is allowed.

The learned counsel for the intervenor - D.

Pradap  submits  that  he  had  originally

participated  in  the  auction  conducted  by

Page 4

4

the  Official  Liquidator  and  he  was  the

highest bidder.   

Be  that  as  it  may,  in  view  of  the

subsequent  developments,  we  made  a

suggestion  in  court  as  to  whether  he  is

prepared to go beyond Rs. 7 crores, which

was offered by the petitioner.  The learned

counsel  for  the  intervenor  has  submitted

that he is prepared to deposit an amount of

Rs. 7.30 crores (Rupees Seven Crores and

Thirty Lakhs).   

It  is  submitted  that  he  has  already

deposited  Rs.  30  Lakhs  before  the  High

Court.  It is further submitted that the

remaining amount of Rs. 7 crores shall be

deposited  before  the  High  Court  by

06.07.2016.  The undertaking is recorded.   

Post on 14.07.2016.”

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

Page 5

5

8. Today, when the matter was taken up, the appellant has submitted that he is prepared to raise the offer and  by  stages,  finally  it  has  come  up  to  Rs.8.70 crores.  The learned counsel for the appellant is still prepared to go beyond that, once the mind of the other side is known.    9. Having regard to what has transpired in the Court, when the case was taken up on 09.05.2016, we gave one chance  to  the  17th Respondent  as  to  whether  he  is prepared to go beyond Rs. 8.70 crores.  It is submitted before this Court that they will pay Rs. 8.75 crores, to have a full and final settlement of the whole issue.

10. Now that the 17th Respondent has submitted that he  is  prepared  to  deposit  Rs.  8.75  Crores,  having regard to the entire background of the hearing before this Court, we are of the view that the matter should end there.    11. At the same time, we are also aware of the fact that the appellant had made a deposit before this Court pursuant to orders of this Court.   

12. In our view, the interest of justice would be met in  case  the  amount  deposited  by  the  appellant  is directed to be returned along with the accrued interest

Page 6

6

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

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

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

Page 7

7

are distributed.   

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

16.  With  the  above  observations  and  directions,  the appeal is disposed of.  

No costs.   .......................J.

             [ KURIAN JOSEPH ]  

.......................J.               [ ROHINTON FALI NARIMAN ]  New Delhi; JULY 14, 2016.