Vedica Procon P. Ltd. vs Balleshwar Greens P. Ltd. and Others

M.R. Shah, J.

Feeling aggrieved and dissatisfied with the impugned judgment and order dated August 11, 2014, passed by the learned single judge of this court (hereinafter referred to as "company court") passed in Miscellaneous Civil Application No. 89 of 2014 in O.L.R. No. 43 of 2013 by which the learned company court has recalled its earlier order dated December 17, 2013, passed in O.L.R. No. 43 of 2013 and has issued the directions for fresh auction of the land in question of the company in liquidation, fixing the upset price at Rs. 214 crores and the EMD at Rs. 21.4 crores, the appellant herein--original opponent No. 9--Vedica Procon P. Ltd., whose earlier offer of Rs. 148 crores was accepted by the learned company court vide order dated December 17, 2013, has preferred O.J. Appeal No. 36 of 2014. Feeling aggrieved and dissatisfied with the impugned order August 11, 2014, passed by the learned company court in O.J. Civil Application No. 283 of 2014 by which the learned company court has dismissed the said application preferred by the appellant herein--Narmada Fintrade P. Ltd., in which the appellant prayed to permit it to be joined as party respondent in O.J. MCA No. 89 of 2014 as necessary and/or proper party, the appellant herein--original applicant Narmada Fintrade P. Ltd., who is claiming to have 92 per cent of the shareholding of the company in liquidation has preferred O.J. Appeal No. 66 of 2014.

Facts leading to the present appeal in nutshell are as under:

That the company named Omex Investors Ltd., (hereinafter referred to as "company in liquidation") was ordered to be provisionally wound up by the order dated October 26, 1989, passed by this court in Company Petition No. 156 of 1989 and the company was thereafter ordered to be wound up by an order dated March 6, 1990 and the official liquidator attached to this court came to be appointed as liquidator of the said company. That the dispute is with respect to the completely freehold land of the company in liquidation admeasuring 13,895 sq. meter situated in the very prime location of the city of Ahmedabad. That by order dated March 26, 2013, passed in Company Application No. 475 of 2013, the learned company court directed the official liquidator to put the aforesaid freehold land for sale by inviting offers from intending purchasers in a sealed cover. That the learned company court also fixed the upset price at Rs. 55 crores and the EMD was fixed at 10 per cent thereof. Accordingly, the official liquidator invited the offers by giving advertisement in newspapers having wide circulation in the State of Gujarat as well as in the city of Mumbai. That in response to the said advertisement, 12 tender forms were sold, however only one tender was received from M/s. Jai Bholenath Project P. Ltd., in a sealed cover. That thereafter Company Application No. 151 of 2013 was filed, wherein it was prayed by the said offer to accept the offer of Rs. 45 crores. That the learned company court did not accept the same, however directed the official liquidator to issue a fresh advertisement in the said newspapers in English as well as Gujarati as provided in the earlier order, inviting the offers for sale of the land in question on same terms and conditions, however refixed the upset price at Rs. 45 crores. That fresh advertisements were issued in the newspapers as directed. Pursuant to the said advertisement, 13 tender forms were sold, out of which, 3 tenders were received from the intending purchasers in a sealed cover up to the last date, i.e., July 22, 2013. The official liquidator filed O.L.R. No. 43 of 2013 and, inter alia, prayed to consider the views of the secured creditors of the company in liquidation in respect of the highest bid that may be received in the inter se bidding and to confirm the sale in favour of the highest bidder on the terms and conditions of sale as per the tender document and/or such other and further terms and conditions as may be considered appropriate or to readvertise the sale in case the court finds that the highest offer received in the inter se bidding is not appropriate offer looking to the fair market price and the valuation of the assets of the company in liquidation. It appears that over and above the aforesaid three offers, other 8 bidders made offer and deposited EMD along with the late fee charges which came to be permitted by the learned company court. That the aforesaid O.L.R. No. 43 of 2013 was heard by the learned company court on December 17, 2013. The learned company court was pleased to conduct the auction accordingly in the open court, wherein 11 participants including respondent No. 1 herein as well as the appellant herein (original opponent No. 9--Vedica Procon P. Ltd.) participated. Ultimately, after inter se bidding, the appellant herein--original opponent No. 9 emerged to be the highest bidder at Rs. 148 crores. That as the appellant herein--original opponent No. 9 was the highest bidder who offered Rs. 148 crores, the learned company court by order dated December 17, 2013, accepted the offer/bid of the appellant herein--original opponent No. 9--Vedica Procon P. Ltd., being the highest bidder who offered Rs. 148 crores for the land in question and disposed of the aforesaid O.L.R. No. 43 of 2013. It appears that thereafter the appellant herein--original opponent No. 9 deposited 25 per cent of the sale consideration as per the conditions of the tender, i.e., Rs. 37 crores on January 16, 2014. It appears that thereafter the appellant herein--original opponent No. 9 filed M.C.A. No. 53 of 2014 before the learned company court with a prayer to grant extension of four months to deposit the balance sale consideration of Rs. 106.50 crores. That by order dated March 31, 2014, the learned company court disposed of the said application and granted four instalments as under:

(1) Rs. 34 crores on or before April 30, 2014;

(2) Rs. 24 crores on or before May 30, 2014;

(3) Rs. 24 crores on or before June 30, 2014;

(4) Rs. 24.5 crores on or before July 30, 2014;

The learned company court also directed the appellant herein to pay 10 per cent interest per year starting from April 16, 2014, till the last instalment of Rs. 24.5 crores was paid.

That feeling aggrieved and dissatisfied with the aforesaid order dated March 31, 2014, passed by the learned company court in M.C.A. No. 53 of 2014, respondent No. 1 herein preferred appeal being O.J. Appeal No. 9 of 2014. It appears that at the time of hearing of the aforesaid appeal, it was submitted on behalf of respondent No. 1 herein that they desire to apply afresh for the bid and they are prepared to offer/pay even more than Rs. 148 crores and wants to enhance their offer substantially. That the Division Bench of this court vide judgment and order dated April 17, 2014, disposed of the said appeal on the following consensus:

"The record further indicates that thereafter, further applications were filed being Company Application No. 475 of 2011, wherein this court by an order dated March 26, 2013, directed the official liquidator to put freehold land as discussed hereinabove for sale by inviting offers from intending purchasers in a sealed cover. This court was also pleased to further provide that the usual terms and conditions for such auction shall be similar to the matter of Ahmedabad Manufacturing and Calico Printing Mills Co. Ltd. (O.J. Civil Application No. 183 of 2012). This court was pleased to fixed the upset price under auction at Rs. 55 crores and EMD was fixed at 10 per cent thereof. This court further directed the official liquidator to give public advertisement for sale in two daily Gujarati newspapers having wide circulation in the State of Gujarat and in the city of Mumbai and also in one English newspaper ''Times of India'' in the State of Gujarat and in the city of Mumbai. It further appears from the record that accordingly, the official liquidator published advertisement on April 10, 2013, in Gujarati dailies ''Gujarat Samachar" and ''Divya Bhaskar'' and ''Mumbai Samachar'' and ''Gujarat Samachar'' in the city of Mumbai and ''Times of India'' in the State of Gujarat and city of Mumbai for sale of the aforesaid lands of the company under liquidation. The record further reveals that in response to the said advertisements, 12 tender forms were sold, however, only 1 tender was received from M/s. Jay Bholenath Project P. Ltd., in a sealed cover. It further appears that thereafter, Company Application No. 151 of 2013 was filed, wherein it was prayed by the said offer to accept the offer of Rs. 45 crores. Considering the said application, this court was pleased to refix the upset price at Rs. 45 crores and directed the official liquidator to issue a fresh advertisement in the same newspapers in English and Gujarati as provided in the earlier order, inviting offers for sale of lands in question on same terms and conditions and the official liquidator was further directed to set out the time schedule for different stages for the public auction."

It appears that thereafter one M.C.A. No. 90 of 2014 in O.J. Appeal No. 9 of 2014 came to be filed by the appellant herein--original opponent No. 9, which came to he disposed of by the said Division Bench vide order dated April 22, 2014, deleting the word "consensus" from second line of paragraph 6 of the judgment dated April 17, 2014. At this stage it is required to be noted that order passed by the Division Bench of this court in O.J. Appeal No. 9 of 2014 has attained finality.

That thereafter opponent No. 1 herein who was the second highest bidder submitted MCA No. 89 of 2014 in OLR No. 43 of 2013 before the learned company court mainly praying for recall of the order dated December 17, 2013, on two main grounds more particularly enumerated in paragraphs 2.9, 2.10, 2.11 and 3 of the said application. That it was mainly contended on behalf of opponent No. 1 herein--original applicant as under:

"(a) That while passing the order dated December 17, 2013, the successful bidder Vedica Procon P. Ltd.--opponent No. 9 herein requested for permission of one nominee, but such a request was declined as observed in paragraph 10 by this court in its order dated December 17, 2013. It is contended that in disregard to condition No. 31 as well as the order dated December 17, 2013, Vedica Procon P. Ltd., has surreptitiously undergone a material change and has changed its registered office as well as share capital of Vedica Procon P. Ltd., and the earlier directors Tamanna Paras Pandit and Paras Chamanlal Pandit who were directors of Vedica Procon P. Ltd., since its inception have resigned and one Narendra Natwarlal Patel and Jayesh Tansukhlalbhai Kotak have become directors of the said company with effect from January 17, 2014. It is alleged that such material aspect has been suppressed and such aspect has been resorted to in total disregard with the condition of auction as well as the order dated December 17, 2013 and hence, it is alleged that the same is fraudulent in nature vitiating the order dated December 17, 2013 and also the subsequent order dated March 31, 2014.

(b) It is contended by the applicant herein that there is a change in the development regulations of Ahmedabad Urban Development Authority with effect from March 4, 2014, whereby the floor space index has been enhanced from 1.0 to 1.8 which would entitle the developer of the land for more construction. It is contended that the applicant is ready and willing to shell out an amount of Rs. 160 crores for the land in question which has already been deposited as per the order passed by the hon''ble Division Bench.

(c) In paragraph 3 of the application, as such factual aspects are contended by the applicant and it is contended that the applicant has filed this application to apply for a fresh bid as per the order of the hon''ble Division Bench. It is also contended that even though Vedica Procon P. Ltd., has deposited the entire amount on April 16, 2014, the sale of the land in question is not yet confirmed by this court and no sale deed is yet executed. It is also reiterated that Vedica Procon P. Ltd., has committed gross material irregularity by not adhering to the terms and conditions of the tender documents more particularly, as regards nomination. It is also reiterated that during the interregnum period, there is increase in floor space index which has enhanced the original value of the property in question. The applicant has candidly submitted that the order dated March 31, 2014, has lost its efficacy in view of the subsequent development and it is specifically contended by the applicant that the said order dated March, 31, 2014, has now become infructuous. The applicant has also contended that this court is the custodian of the interest of the company and its creditors."

That the aforesaid application was opposed by the appellant herein--original opponent No. 9--Vedica Procon P. Ltd. It was submitted that the said application is not maintainable in law and no grounds are made for recall of the order. It was also contended that the application suffers from gross delay and laches. It was further contended that it was declared as the highest bidder and it has also paid the full amount of sale consideration on April 16, 2014 and therefore, thereafter it is not open to pray to recall of the earlier order dated December 17, 2013, accepting the highest bid/offer of the appellant. It was further contended that even the EMD amount came to be returned to the original applicant--opponent No. 1 herein and therefore, it has lost its right to recall/review the order dated December 17, 2013, by way of waiver, estoppel, acquiescence. It was submitted that neither there was any violation of the principles of natural justice while passing the order dated December 17, 2013, nor even there was any allegation of fraud. It was further contended that the official liquidator had already given possession of the land in question to it on April 17, 2014, at 11.30 a.m. It was further contended that the change of FSI which is a subsequent event would not give any right for recall of the order dated December 17, 2013. It appears that it was further contended that in commercial venture, the bidder runs the hazard if any loss happens and equally, he may make a profit of the transaction at the end of the day. It was further contended that opponent No. 1--original applicant decided not to increase its bid to match with the bid of the higher offerer--appellant herein--Vedica Procon P. Ltd., and having so decided earlier, is barred from seeking rebid in respect of the property under the garb of recall application.

The said application was opposed by the appellant herein--original opponent No. 9--successful bidder on number of other grounds also, as noted by the learned company court in the impugned judgment and order more particularly paragraphs 16 to 18. At this stage it is required to be noted that as per the order passed by the Division Bench of this court dated April 17, 2014, opponent No. 1 herein--original applicant deposited Rs. 160 crores with the official liquidator.

That after hearing the learned advocates appearing for respective parties and considering the submissions made/contentions raised by opponent No. 1 herein--original applicant as well as the appellant herein--original opponent No. 9, in exercise of the inherent powers conferred upon the company court under the provisions of the Companies (Court) Rules, 1959 (hereinafter referred to as "Companies (Court) Rules") more particularly rule 9 and specifically observing that at the time of accepting the offer of the appellant herein--original opponent No. 9 on December 17, 2013, at Rs. 148 crores, the learned company court did not consider the potentiality of the land in question as on that date FSI in GCR was likely to be changed and that the price received (Rs. 148 crores) at the sale process was grossly inadequate and the factor like FSI which had a direct impact and effect on the potential development could not be considered by the court, by impugned order has recalled its earlier order dated December 17, 2013, accepting the bid of the appellant herein--original opponent No. 9 at Rs. 148 crores and has issued the following directions:

"(1) The official liquidator shall give a fresh advertisement for auction in newspapers as provided by this court in the order dated March 26, 2014, passed in Company Application No. 475 of 2011 in the same newspapers in English and Gujarati as provided in the earlier orders inviting for offer of the purchase of the land in question admeasuring 13,895 sq. meter on the same terms and conditions by fixing the upset price at Rs. 214 crores and EMD at Rs. 21.4 crores being 10 per cent of the upset price as fixed. The official liquidator shall give such advertisements within a period of two weeks from the date of receipt of this order. The official liquidator shall set out the time schedule for different stages of public auction. The amount of Rs. 214 crores deposited by the applicant herein shall be invested by the official liquidator in a fixed deposit till fresh auction process is over.

(2) The official liquidator shall return back the amount of Rs. 148 crores to opponent No. 9 forthwith. The applicant is directed to pay Rs. 25 lakhs to opponent No. 9, as provided by the apex court in the case of FCS Software Solutions Ltd. Vs. LA Medical Devices Ltd. and Others, within a period of two weeks from the date of receipt of this order.

(3) The applicant shall take back the possession of the lands in question from opponent No. 9 forthwith.

(4) The official liquidator shall verify the claims of the workers and shall file an appropriate report for disbursement of the dues of the workers out of Rs. 14 crores which is deposited by the applicant within 30 days from the date of receipt of this order. In case if any claim is received from the secured creditors, the official liquidator shall take appropriate steps to determine the same.

(5) The official liquidator shall also file an appropriate report for ratification of the expenses which have been made by the official liquidator as stated in its affidavit after the order dated December 17, 2013."

With the aforesaid observations, clarifications and directions, the learned company court has allowed the aforesaid application and has recalled its earlier order dated December 17, 2013, passed in OLR No. 43 of 2013.

Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned company court dated August 11, 2014, passed in Miscellaneous Civil Application No. 89 of 2014 in OLR No. 43 of 2013, by which the learned company court has recalled its earlier order dated December 17, 2013, passed in OLR No. 43 of 2013 by which the learned company court accepted the offer/bid of the appellant herein--original opponent No. 9 at Rs. 148 crores, the appellant herein--original opponent No. 9 has preferred the present appeal.

Shri Mihir Joshi, the learned senior advocate has appeared with Shri Sandip Singhi, the learned advocate appearing on behalf of the appellant herein--original opponent No. 9 and Shri Kamal Trivedi, the learned senior advocate has appeared with Ms. Sangita Vishen, the learned advocate appearing on behalf of respondent No. 1 herein--original applicant. Ms. Amee Yajnik, the learned advocate has appeared on behalf of the official liquidator of the company in liquidation and Shri Dhimant Vasavada, the learned advocate has appeared on behalf of the worker union.

The impugned judgment and order passed by the learned company court has been challenged by the appellant herein--original opponent No. 9.

Shri Mihir Joshi, learned counsel appearing on behalf of the appellant herein--original opponent No. 9 has vehemently submitted that the learned company court has materially erred in passing the impugned order allowing MCA No. 89 of 2014 filed by respondent No. 1 herein--original applicant and recalling its earlier order dated December 17, 2013.

Shri Mihir Joshi, learned counsel appearing on behalf of the appellant herein--original opponent No. 9 has further submitted that the learned company court has materially erred in entertaining the application submitted by respondent No. 1 herein--original applicant and in recalling its earlier order dated December 17, 2013, in the application filed by respondent No. 1 herein.

It is further submitted by Shri Mihir Joshi, learned counsel appearing on behalf of the appellant herein--original opponent No. 9 that as such the application at the instance of respondent No. 1 herein was not at all maintainable. It is submitted that respondent No. 1 Balleshwar Greens P. Ltd., having participated in the auction without objection and having failed to match the highest bid, was estopped and precluded from seeking to reopen the auction and from seeking second innings on an afterthought.

It is further submitted that the price offered by respondent No. 1 herein--original applicant admittedly on the basis of the increased valuation of the property due to events subsequent to the auction cannot support maintainability of the application as held in the impugned judgment and order.

It is further submitted that the Division Bench while passing the judgment and order in O.J. Appeal No. 9 of 2014 having kept all the issues open including that of maintainability, the application could not have been held to be maintainable on the basis of the liberty having been granted by the Bench to move such application.

It is further submitted that the learned company court by its impugned judgment and order has erred in coming to the conclusion that the recall application filed by respondent No. 1 herein--original applicant needs to be entertained in view of the directions issued by the Division Bench. It is submitted that the learned company court has completely misread the orders dated April 17, 2014 and April 22, 2014, passed by the Division Bench in O.J. Appeal No. 9 of 2014. It is submitted that as such the learned Division Bench by its order dated April 22, 2014, clarified that there is no consensus as to the filing of an application or the maintainability thereof. It is submitted that the Division Bench had not issued any directions suggesting that the application to be preferred by the Balleshwar Greens P. Ltd., should be entertained by the company court without deciding the issue of its maintainability. It is further submitted by Shri Mihir Joshi, learned counsel appearing on behalf of the appellant herein--original opponent No. 9 that even otherwise the application was not maintainable as it seeks a belated review of the judgment on the basis of the subsequent facts which is not permissible, and therefore, styled as a recall though none of the requirements for recall of the judgment are satisfied.

It is submitted that first of all, no grounds, required for recall of an order, have been raised in the application. It is submitted that it was not the case of Balleshwar Greens P. Ltd., that the order dated December 17, 2013, was obtained by fraud practiced upon the court or that the hon''ble court was misled by any party or that the hon''ble court had committed any mistake which prejudices any party. It is further submitted that there was no ground raised in the application that the order dated December 17, 2013, passed by the court, suffer from inherent lack of jurisdiction or that a necessary party had not been served at all or was not represented. It is submitted that under the circumstances, the application filed by respondent No. 1 herein--original applicant--Balleshwar Greens P. Ltd., for recall of the order dated December 17, 2013, was not maintainable in law. In support of his above submissions he has relied upon the decision of the hon''ble Supreme Court in the case of Budhia Swain and Others Vs. Gopinath Deb and Others, ).

It is further submitted by Shri Mihir Joshi, learned counsel appearing on behalf of the appellant herein--original opponent No. 9 that as such respondent No. 1 herein--original applicant was very much aware that the review application under Order 47, rule 1 of the Code of Civil Procedure, 1908 (hereinafter referred to as "Code") read with rule 6 of the Companies (Court) Rules against the order dated December 17, 2013, passed by the learned company court, would not be maintainable as it was not the case of the Balleshwar Greens P. Ltd., that there was any error apparent on the face of the record. The original applicant--Balleshwar Greens P. Ltd., in order to achieve the review of the order dated December 17, 2013, has cleverly labelled its application as recall application. It is submitted that therefore, what cannot be done directly, cannot be permitted to be done indirectly. It is submitted that as such the application before the learned company court by the original applicant was an abuse of process of law which ought to have been rejected by the learned company court.

It is further submitted that even the original applicant had participated in the inter se bidding conducted by the court on December 17, 2013 and was very well aware of the order dated December 17, 2013 and the present application came to be filed only on April 21, 2014 and no explanation worth name was given by the original applicant for the delay in preferring MCA No. 89 of 2014.

It is further submitted by Shri Mihir Joshi, learned counsel appearing on behalf of the appellant herein--original opponent No. 9 that it was the case on behalf of the original applicant that after the passing of the order dated December 17, 2013, the value of the land in question is likely to fetch much more price as floor space index (FSI) has increased. It is submitted that it was further the case of the original applicant that as FSI has increased, original applicant is ready and willing to shell out more amount than that offered by the appellant herein and confirmed by this court. It is submitted that though by that itself do not give any right for recall of the order dated December 17, 2013. It is submitted that a proposed change in FSI become public pursuant to the notification dated March 4, 2014, issued by the Government of Gujarat. It is submitted that no explanation is given in respect of the filing of OJMCA No. 89 of 2014 though being aware of the notification dated March 4, 2014.

It is further submitted by Shri Mihir Joshi, learned counsel appearing on behalf of the appellant herein--original opponent No. 9 that a subsequent higher offer by itself, without any allegation of material irregularity or fraud, does not justify reopening the auction but even if it is accepted that a substantial increase may establish material irregularity in the confirmation of the sale, even the said proposition does not support reopening the auction in the facts of the present case. It is further submitted that the price offered by Balleshwar today is admittedly on the basis of the increased value of the property due to the subsequent event of increased FSI and therefore cannot establish material irregularity in the confirmation of the sale earlier. It is further submitted that the attempt to reopen the concluded transaction on the basis of subsequent facts is impermissible. It is submitted that a bidder having participated in the auction and after consciously deciding not to bid higher than the highest bid, cannot be heard to complain that its business/commercial decision turned out to be incorrect on second thought and that it should be permitted to improve its offer and that this is against the basic concept of auction where the fall of the hammer crystallises the rights of the parties. It is further submitted that any subsequent facts affecting the valuation of the property thereafter are wholly irrelevant to determine the adequacy of the price when the hammer fell and it would be to the risk and/or consequence of the purchaser. It is submitted that if an event adversely affecting the valuation of the property, viz., reservation, etc., had happened post the auction, the purchaser could not have sought a review to back out from the transaction and therefore, it would be inequitable and impermissible for a bidder to seek to deprive the purchaser of the benefit of a subsequent fact which may increase the valuation of the property. It is submitted that in both cases, parties take the consequence of a business decision, its consequential loss or benefit and would be held bound by it otherwise there would be no sanctity or closure to auction proceedings at all.

In support of his above submissions, Shri Joshi, learned counsel appearing on behalf of the appellant herein has relied upon the decision of the hon''ble Supreme Court in the case of Ganga Retreat and Towers Ltd. and Another Vs. State of Rajasthan and Others, .

It is further submitted that the price at which the sale was confirmed and the amount of the present offer cannot be compared at all due to the subsequent development, and the higher price does not relate back to the time the auction was held and when the bid of the appellant herein was accepted.

It is further submitted by Shri Joshi, learned counsel appearing on behalf of the appellant that there was no allegation made by any party that the price at which the sale was confirmed in favour of the appellant herein was inadequate. It is submitted that in fact there is no such finding by the learned company court and therefore, the confirmation of the auction vesting valuable rights in the appellant herein could not have been set aside.

It is further submitted that auction was conducted after fixing the reserved price, giving wide publicity and by open, public and competitive bidding and none of these aspects have been questioned by Balleshwar. It is submitted that as such the bid of the appellant--Vedica, much above the reserve price was considered fair and deserving acceptance by all stakeholders including the secured creditors, workmen and the official liquidator. It is submitted that even it was not the case of the Balleshwar that the company court as a custodian had not taken the interest of the creditors, workers, etc., into consideration while passing the order dated December 17, 2013.

It is further submitted that even the learned company court in the impugned order has not found that the price at which the sale was confirmed was inadequate at the time of confirmation. It is submitted that the learned company court has set aside the confirmation on the ground that in view of the subsequent development of increase in the FSI, the price had been rendered inadequate, which is an error of principle.

It is further submitted by Shri Joshi, learned counsel appearing on behalf of the appellant that even some of the observations made by the learned company court that since the change in FSI had not been sanctioned at the time of passing the order dated December 17, 2013, the court had no occasion to consider the said factum and that on the date on which the auction came to be held by this court and while accepting the highest bid of opponent No. 9, the change in FSI was not sanctioned but was only in offing and therefore, this court had no occasion to consider the said factum and the aforesaid were overlooked, all these observations are required to be read in the context they are and the judgment and order is required to be read as a whole. It is submitted that the entire judgment proceeds on the basis that the subsequent higher price renders auction price inadequate and therefore, in any case aforesaid observations be read in that context, since it is well-settled principle that the judgment must be read as a whole. It is submitted that in any case the fact regarding pending change in GDCR was not taken into account, the same by itself does not justify setting aside the order of confirmation.

It is further submitted that there is no finding that the pending change was for a definite increase of the FSI and in fact the record indicates that the uncertainty of the issue that the change could also be for reduction of the FSI, resulted in the reserve price being lowered due to lack of bids. It is submitted that moreover, it is impermissible to consider a subsequent fact, viz., change in FSI as casting its shadow on an earlier event so as to crystallize an uncertainty into a positive factor, since that would amount to modifying the order by applying retrospective wisdom which is impermissible. It is submitted that obviously, the order must be unjust or illegal when made to justify its recall/review and therefore an event which had not occurred as on that date, cannot give weight to the uncertain potential of the land having really no impact on its value, as on the date of the order.

It is further submitted that there is no finding that the price offered and accepted does not account for the pending change and is inadequate, particularly when the case of Balleshwar itself was that all bidders were aware of the likely change in FSI, and therefore must be presumed to have bid on such basis, and there is no allegation of unfair bidding or cartelisation.

It is further submitted that admittedly, Balleshwar was aware of the pending change, despite which it did not seek postponement of auction and having participated without objection, failed to match the highest bid. Balleshwar did not seek review of the order of confirmation on this basis forthwith but only after the FSI was in fact increased much after the auction, that the application was filed. It is submitted that apart from indicating the lack of bona fides of Balleshwar, the conduct establishes that the price was adequate at that time and there was no justification in setting aside the order and such is not even Balleshwar''s case and the finding if at all it is considered to be so is clearly beyond the pleadings of the parties.

In support of his above submissions, Shri Joshi, learned counsel has relied upon the following decisions of the hon''ble Supreme Court as well as this court:

(1) Navalkha and Sons Vs. Ramanuja Das and Others,

(2) Kayjay Industries (P) Ltd. Vs. Asnew Drums (P) Ltd. and Others,

(3) Sharawan Kumar Agarwal Vs. Shrinenp Investment Ltd. and Others, (pages 63 to 71)

(4) Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others,

(5) Sarvariya Exports Ltd. Vs. O.L. of Urmi Oil Limited and Others,

(6) Chaudhary Brothers v. Official Liquidator of Bhagwati Glass Container Ltd. (2014) 2 GLH 271 .

It is further submitted that even the submissions on behalf of the Balleshwar that by order dated December 17, 2013, the learned company court had not confirmed the sale in favour of the appellant--Vedica is baseless and without any merits.

It is further submitted that by order dated December 17, 2013, the learned company court accepted the bid of the appellant as being the highest bidder. It is further submitted that the bid of the appellant is accepted as per the tender conditions and that by the said order the sale is confirmed in favour of the appellant herein.

It is further submitted that nowhere it has been stated by the learned company court in its order dated December 17, 2013, that the learned company court has not yet confirmed the sale in favour of the appellant or that the learned company court would confirm the sale subsequently. It is further submitted that on the contrary, the learned company court by its order dated December 17, 2013, directed the official liquidator to take appropriate actions as envisaged under the conditions of the tender notice, more particularly condition Nos. 29, 32 and 33. It is further submitted that condition No. 33 clearly stipulates about the execution of the sale deed within one month from the date of payment the full sale consideration and as per the said order dated December 17, 2013, neither the appellant herein nor the official liquidator is required to approach the learned company court seeking permission for execution of the sale deed. It is submitted that even otherwise there is no stipulation in condition No. 33 which mandates the successful bidder to approach the learned company court seeking approval of the execution of the sale deed once the learned company court accepts the bid of the successful bidder.

It is further submitted that there is no provision in the terms and conditions which stipulates that acceptance of bid by the learned company court is separate and distinct from the confirmation of sale by the learned company court.

It is submitted that on perusal of clauses 5, 8, 9, 13, 17, 20, 23, 29 and 33 of the terms and conditions, it is clear that on acceptance of the highest bid by the learned company court, the learned company court confirms the sale in favour of the highest bidder.

Now, so far as the exercise of inherent powers by the learned company court is concerned, Shri Joshi, learned counsel has vehemently submitted that the learned company court has failed to appreciate that mere offering higher price at a later stage on second though would not automatically lead the learned company court to exercise its inherent powers under rule 9 of the Companies (Court) Rules and that too without considering the settled principles for recall, delay and laches, suppression, waiver, estoppel and acquiescence.

It is further submitted that mere offering high price by an out bid unsuccessful bidder, based on subsequent events and that too without there being any averments to the effect that the price offered during the auction was inadequate would not lead the learned company court to exercise its inherent powers and thereby set aside a confirmed sale and concluded transaction. It is submitted that if higher price is the only trigger event for the learned company court to exercise its inherent powers then in such a case a confirmed sale can never attain finality and such interference and cancellation of a concluded contract would result into erosion of faith in the system and sanctity of the contract. It is submitted that learned company court in the facts of the present case, has grossly erred in exercising its inherent powers by recalling the order dated December 17, 2013 and by such recall the learned company court has failed to secure the ends of justice.

Making above submissions and relying upon above decisions, it is requested to allow the present appeal and quash and set aside the impugned judgment and order passed by the learned company court.

The present appeal is opposed by Shri Kamal Trivedi, the learned senior advocate appearing with Ms. Sangita Vishen, the learned advocate appearing on behalf of respondent No. 1 herein--original applicant Balleshwar.

It is submitted by Shri Kamal Trivedi, learned counsel appearing on behalf of respondent No. 1 that in the facts and circumstances of the case the learned company court has as such not committed any error in recalling its earlier order dated December 17, 2013 and ordering for re-auction of the property of the company in liquidation fixing the fresh upset price at Rs. 214 crores. It is further submitted by Shri Trivedi, learned counsel appearing on behalf of the original applicant that as such the learned company court has recalled its earlier order dated December 17, 2013, in exercise of its inherent powers under rule 9 of the Companies (Court) Rules.

It is further submitted by Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein that the application filed by respondent No. 1 herein--original applicant before the learned company court was as such an application for the purpose of recall of the order dated December 17, 2013 and that, it was neither a review application nor was it filed under the guise of the review application. It is submitted that rule 9 of the Companies (Court) Rules empowers the learned company court to entertain such recall application which provided for the inherent powers of the learned company court for doing complete justice in the matter.

It is submitted that in exercise of inherent powers, limitation like waiver, estoppel, acquiescence or the limitations for entertaining a review application, are not applicable while entertaining the application for recall under the aforesaid provisions.

It is further submitted by Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein--original applicant that there is a major difference between "review" of the order and "recall" of the order. It is submitted that in review, the hon''ble court has to enter into the merits of the case to find out whether an error apparent on the face of record has been committed, whereas in case of recall what is required to be seen with reference to the order under recall is (a) violation of principles of natural justice; (b) illegality; (c) irregularity; (d) suppression of facts; and (e) exercise of fraud. It is submitted that to do the complete justice the court can recall its earlier order and that is exactly what has been done by the learned company court in the present case.

In support of his above submissions, Shri Trivedi, learned counsel has heavily relied upon the following decisions of the hon''ble Supreme Court as well as this court and the Kerala High Court:

(1) Vishnu Agarwal Vs. State of U.P. and Another,

(2) G.T. Swamy and Another Vs. Goodluck Agencies and Another,

(3) Giovanola Binny (in liquidation), In re and Fertilizers and Chemicals Travancore Ltd. v. Official Liquidator, High Court of Kerala [1996] 4 Comp LJ 380 (Ker.) (paragraphs 11, 12, 13)

(4) Shraddha Aromatics P. Ltd. Vs. Official Liquidator of Global Arya Industries Ltd. and Others, .

(5) Girish Bhagwatprasad Huf through Karta and Manager Aastik and Another Vs. Industrial Development Bank of India Ltd. (IDBI Ltd.) and Others,

(6) Maharana Mills Rashtriya Kamdar Sangh Vs. O. L. of Maharana Mills Ltd. and Others,

It is further submitted by Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein--original applicant that one may find identical language like rule 9 of the Companies (Court) Rules having been used in section 151 of the Code, section 482 of the Code of Criminal Procedure, 1973 and rule 6 of the Supreme Court Rules.

Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein--original applicant that paragraph 8 of the decision of the hon''ble Supreme Court in the case of Padam Sen and Another Vs. The State of Uttar Pradesh, . It is submitted that as observed and held by the hon''ble Supreme Court in the said decision, inherent powers of the court are in addition to the powers specifically conferred on the court by the Code. It is submitted that as held by the hon''ble Supreme Court in the said decision inherent powers are complimentary to those powers and, therefore, it must be held that the court is free to exercise them for the purposes mentioned in section 151 of the Code when the exercise of those powers is not in anyway in conflict with what has been expressly provided in the Code or against the intentions of the Legislature.

It is submitted that there is no provision under the Companies Act or in the Companies (Court) Rules, which takes away the power of the learned company court to recall an order.

Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein--original applicant has further submitted that the pith of "inherent power" has been succinctly discussed by the apex court in the case of Rupa Ashok Hurra Vs. Ashok Hurra and Another, and in the recent decision in the case of Subrata Roy Sahara Vs. Union of India (UOI) and Others, .

It is further submitted by Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein--original applicant that in view of the above, the judgments cited on behalf of the appellant herein, viz., (1) State of Punjab Vs. Davinder Pal Singh Bhullar and Others etc., ; (2) K.K. Velusamy Vs. N. Palanisamy, ; and (3) Budhia Swain and Others Vs. Gopinath Deb and Others, cannot be pressed into service to negate the case of the respondent herein and inasmuch as they suggest that power of recall in present circumstances can very well be exercised.

It is further submitted by Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein--original applicant that in the facts and circumstances of the case, the learned company judge is right in law in allowing the respondent''s recall application. It is submitted that in the present case as such the learned company judge has taken upon himself and has recalled its order dated December 17, 2013, by specifically observing that the relevant considerations like potentiality of the land, etc., were not considered by him at the time of accepting the offer made by the appellant of Rs. 148 crores and therefore, the price offered by the appellant, i.e., Rs. 148 crores, which came to be accepted was an inadequate price.

It is, therefore, submitted by Shri Trivedi, learned counsel that when the court felt that there was an error committed by it and therefore, when in exercise of inherent powers the court has recalled its earlier order, the doctrine and/or principle of estoppel, acquiescence, etc., can never come in the way of the court to exercise inherent powers and to recall its earlier order.

It is further submitted by Shri Trivedi, learned counsel that as such by order dated December 17, 2013, it cannot be said that the learned company court confirmed the sale in favour of the appellant herein. It is submitted that there is a difference between "acceptance of the higher offer" and "confirmation of the sale in favour of the bidder making the highest offer".

It is submitted that it is well-settled position of law that the contract is to be interpreted by giving actual meaning of the words contained therein and it is not permissible for the court to make a new contract, however reasonable it may be and that is to be harmoniously interpreted in such a way that its terms may not get varied.

In support of his above submissions, he has relied upon the decisions of the hon''ble Supreme Court in the case of Provash Chandra Dalui and Another Vs. Biswanath Banerjee and Another, and another decision of the hon''ble Supreme Court in the case of The Rajasthan State Industrial Development and Investment Corporation and Another Vs. Diamond and Gem Development Corporation Ltd. and Another, .

It is submitted that while adhering to the aforesaid principle, if conditions Nos. 9, 17, 33, 27 and 23 of the terms and conditions of the public auction in question are read in seriatim in a purposive and harmonious fashion, then it would become clearly discernible that there is a vast difference between "the acceptance of the highest offer in any public auction", on one hand and "confirmation of the sale in the said public auction" on the other. It is submitted that the words "confirmation" and "acceptance" occurring at several places in the said terms and conditions, are not nebulous and surplusage but are required to be interpreted literally.

It is further submitted that therefore, from the order dated December 17, 2013, it can be said that the learned company judge accepted the higher offer of the appellant herein only, the learned company judge is absolutely right in law in observing in paragraphs 36 and 37 that "the draft of such a sale deed is to be placed before the concerned company court for its approval...", "that the sale deed is not executed and thus, as per the terms and conditions of auction, the sale procedure is yet not complete".

It is further submitted that even otherwise, if the order dated December 17, 2013 of the learned company court had been an order of "confirmation of sale" of the property in question in favour of the appellant herein, in that case, the said order would have definitely reflected upon following aspects, as opined by the apex court and this court in various judgments:

"(1) In every case, it is the duty of the court to satisfy itself that having regard to the market value of the property, the price offered is reasonable. Unless the court is satisfied about the adequacy of the price, the act of confirmation of sale would not be a proper exercise of judicial discretion ( Navalkha and Sons Vs. Ramanuja Das and Others, ).

(2) Businessman make uncanny calculations before striking a bargain and that circumstance must enter the judicial verdict before deciding whether a better price could be had by a postponement of the sale ( Kayjay Industries (P) Ltd. Vs. Asnew Drums (P) Ltd. and Others, ).

(3) Therefore, if a court acting on the basis of a valuer''s report has proceeded to confirm the sale after considering the fair value of the property, the general economic trends, large sum required to be produced by the bidder, the formation of a syndicate, the futility of postponements and the possibility of litigation, and several other factors dependent on the facts of each case, there should not be any act by the court which signals that any confirmed sale can be lightly set aside. Once the order confirming the sale shows application of mind and indicates that all relevant facts have been considered before confirmation of sale, unless and until such an exercise is shown to be unreasonable or based on wrong principle, confirmed sale cannot be set at naught ( Sarvariya Exports Ltd. Vs. O.L. of Urmi Oil Limited and Others, )."

It is submitted that none of the aforesaid aspects as indicated in the aforesaid case laws has been borne out from the order dated December 17, 2013. It is submitted that in other words, if order dated December 17, 2013, accepting the offer of highest bidder, had been an order of confirmation of sale of the property in question in favour of the appellant herein, all the aspects referred to above would have been definitely present in the said order. It is submitted that thus from all angles, the said order dated December 17, 2013, was simply an order of accepting the highest offer of the appellant herein and on that day neither the sale had become absolute nor had the contract got concluded. It is submitted that therefore the learned judge is absolutely justified in recalling its earlier order dated December 17, 2013, by specifically observing in paragraph 37 that the price fetched in the auction (held on December 17, 2013) is grossly inadequate.

It is further submitted by Shri Trivedi, learned counsel that therefore there was no confirmation of sale in favour of the appellant herein as on December 17, 2013 and before the same could have been confirmed in favour of the appellant herein at Rs. 148 crores, higher offer of Rs. 160 crores of respondent No. 1 herein with up front deposit thereof came on record on April 17, 2014, which was followed by further deposit of Rs. 40 crores and Rs. 14 crores by the respondent, totalling its offer at Rs. 214 crores. It is submitted that therefore the property worth more than Rs. 214 crores (at least) would be sold in favour of the appellant herein at a throw away price of Rs. 148 crores only, if the order dated December 17, 2013, stands. It is submitted that therefore there is nothing wrong on the part of the learned company judge to have directed the fresh auction with the upset price of Rs. 214 crores.

Shri Trivedi, learned counsel has heavily relied upon the decision of the hon''ble Supreme Court in the case of LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, . It is submitted that the situation in the present case and the situation which were there before the hon''ble Supreme Court in the case of LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, , are almost identical. It is submitted that in the aforesaid case, the subsequent higher offer of the bidder, i.e., LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, was directed by the apex court to be treated as the upset price with a direction to the learned company judge to conduct the auction afresh. It is submitted that therefore there is nothing wrong on the part of the learned company judge to have directed a fresh auction with upset price of Rs. 214 crores.

It is further submitted by Shri Trivedi, learned counsel that it cannot be disputed that in the public auction conducted before the learned company court, the fundamental principle to be taken care of is to see that maximum higher market price of the property in question, i.e., an inadequate price is fetched and that the said market price is to be decided with reference to its best price on a given day that could be expected to be offered and not with reference to the total dues of the workers and creditors. It is submitted that therefore even a confirmed sale/de-confirmed/cancelled, if subsequently, a significantly higher offer comes on record by making an exception to the position of the fact that "ordinarily, the courts are loathe to accept the subsequent higher offer of one of the bidders or third party after acceptance of the highest offer at the auction".

It is submitted that in the present case admittedly the offer of respondent No. 1 to the tune of Rs. 214 crores is significantly higher than the received price of Rs. 148 crores of the appellant herein and therefore, the very fact of the respondent having come forward with a significantly higher offer is suggestive of the fact that the price quoted then on December 17, 2013, was inadequate. It is submitted that as such the learned company court has specifically observed in the impugned order that the price fetched in the auction is grossly inadequate.

Shri Trivedi, learned counsel has relied upon the decision of this court dated December 24, 2013, in the case of Abhishek Shops and Warehouse Co-operative Society Ltd. v. Monali Textile in O.J. Appeal No. 49 of 2003 and has further submitted that in the aforesaid decision this court has specifically held that the interference with court sale if found necessary in the interest of company would be permissible. It is further submitted that in the aforesaid decision it is specifically observed that the discretion exercised in directing re-auction by the company court should not be interfered with unless the impugned order is wrong on principle.

Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein--original applicant has further submitted that even in the case of Chaudhary Brothers v. Official Liquidator of Bhagwati Glass Container Ltd. [2014] 2 GLH 271 , this court has held that in a given case offer for a higher price even in cases when there is no allegation about fraud or irregularity may provide a good and justifiable ground to cancel the confirmed sale, however that would be only in exception and rare case where the subsequently offered higher price is significantly higher than the received price. It is submitted that in the present case offer made by respondent No. 1 herein--original applicant had Rs. 214 crores is and can be said to be significantly higher than the offer made by the appellant at Rs. 148 crores. It is submitted that therefore the learned company judge has not committed any error in ordering any re-auction by recalling its earlier order dated December 17, 2013 and by fixing the upset price at Rs. 214 crores.

In support of the above submissions, Shri Trivedi, learned counsel has heavily relied upon the following decisions of the hon''ble Supreme Court:

(1) Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others,

(2) Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others,

(3) FCS Software Solutions Ltd. Vs. LA Medical Devices Ltd. and Others, : [2008] 10 SCC 440 .

(4) Shradhha Aromatics Private Limited Vs. O.L. of Global Arya Industries Limited and Others, .

(5) Suchit Pavitra Industrial Co-operative Society, order dated February 31, 2013, in SLP No. 10881 of 2012.

(6) Manu Tilling Co. P. Ltd. v. Patel Phoschem P. Ltd., order dated August 13, 2014, passed in SLP No. 28790 of 2012.

(7) Manoj I Naik & Associates Vs. Official Liquidator, .

(8) Abhishek Shops and Warehouse Co-operative Society Ltd. v. Monali Textile (judgment dated December 24, 2013, in OLR No. 49 of 2013).

(9) Nileshbhai R. Patel v. Official Liquidator, judgment dated July 25, 2013, in C.A. No. 299 of 2013.

It is further submitted that in the case of Shradhha Aromatics Private Limited Vs. O.L. of Global Arya Industries Limited and Others, , the apex court quashed and set aside the order of the Division Bench of this court B.B. Lathia Vs. Shradhha Aromatics P. Ltd. and Others, which has set aside the order of the learned company court Shraddha Aromatics P. Ltd. Vs. Official Liquidator of Global Arya Industries Ltd. and Others, . It is submitted that it was the order of the learned company judge de-confirming the already confirmed sale for fetching most reasonable market price of the property, was endorsed by the apex court in the case of Shradhha Aromatics Private Limited Vs. O.L. of Global Arya Industries Limited and Others, . Shri Trivedi, learned counsel has submitted that in the aforesaid decisions, i.e., in the case of Shradhha Aromatics Private Limited Vs. O.L. of Global Arya Industries Limited and Others, ; LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, ; LICA (P.) Ltd. (No. 2) Vs. Official Liquidator and Another, ; Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, and Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others, , the hon''ble Supreme Court has clearly observed and held that the learned company court is the custodian of the property and it is the duty of the learned company court to satisfy itself that having regard to the market value of the property, it is the best market price offered and in the process, the subsequent bona fide offer of significantly higher amount, should be taken into consideration, whether or not confirmed sale of the property in question has taken place.

It is submitted that in the light of the aforesaid, even whilst assuming without admitting that the order dated December 17, 2013, of the learned company judge was the order of confirming sale in favour of the appellant herein, in that case also, the same has been rightly recalled, as was done by the apex court in the case of Shradhha Aromatics Private Limited Vs. O.L. of Global Arya Industries Limited and Others, , more particularly in view of the significantly higher offer quoted by respondent No. 1 herein.

It is further submitted by Shri Trivedi, learned counsel appearing on behalf of respondent No. 1 herein that in the order under challenge in the present appeal, the learned company judge has taken into account the strong probability of likely increase in FSI, existing as on December 17, 2013 and not the subsequent event of notification dated March 4, 2014, when FSI was actually increased. It is submitted that it is not correct to say that the learned company judge has as such taken into account the subsequent event of March 4, 2014 and actual increase in the FSI.

It is further submitted that at the time of rendition of the order dated December 17, 2013, by the learned company judge, the perception of the bidders as regards the price quoted then, was factually incorrect inasmuch as, even as per the submission made on behalf of the appellant herein before the learned company judge, all the concerned, including the parties/bidders were very much aware as on December 17, 2013, about the likely possibility of increase/change in FSI, resulting in the enhancement in the value of the property in question, which eventuality took place on March 4, 2014, when the FSI came to be increased to 1.8. It is therefore submitted that for the present purpose, what was decisive was not the said subsequent event of March 4, 2014, but the factor of strong probability referred to above existing as on December 17, 2013, which was within the knowledge of all the bidders but it escaped the attention of the learned company court.

It is submitted that thus, it was owing to the aforesaid reason that the correct market price of the property in question could not come to the notice of this hon''ble court on December 17, 2013, which aspect ought to have been taken into account on December 17, 2013 and for that purpose, even public auction held on December 17, 2013, could have been postponed. It is under these circumstances that the learned company judge took note of the respondent''s contention in the following fashion at page Z-43 of the order under challenge:

"It was contended that on December 17, 2013, all the bidders were aware that there is possibility to increase in FSI which would result into increase in value of the property in question and because of the said reason, the correct market price of the property in question was not brought to the notice of this court and as such the public auction could have been postponed. It is therefore contended that the same would amount to material irregularity even if it is construed that by the order dated December 17, 2013, the sale is confirmed in favour of opponent No. 9, which would be one of the valid ground for recall of the order even by de-confirming the said alleged confirmation of sale."

(emphasis1 supplied)

It is further submitted that the learned company judge was also kind enough to record the appellant''s response in the following words at page Z-58:

"... it was contended that subsequent increase in FSI might have increased the price and as a matter of fact, it is not the subsequent event, but this aspect of FSI was discussed even in the earlier order and during the course of the auction process..."

(emphasis1 supplied)

It is further submitted that it is in the backdrop of the aforesaid respective stands of the parties, that the learned company judge while taking into account of the aforesaid strong probability of likely increase in FSI, existing as on the date of auction held on December 17, 2013, which was not considered on that day, held at page Z-151 in the following words:

"While determining the market value, fact of potential development is an important factor. Considering the aforesaid development of increase in FSI which was in the offing, though uncertain, could not be considered by this court, which in opinion of this court has led to insufficient determination of the true and correct market value of the land in question..."

(emphasis1 supplied)

It is further submitted that the learned company judge in paragraph 41 at page Z-16 proceeds to observe as under:

"However, such a vital factor of potentiality of development which could not be considered by this court in the circumstances narrated hereinabove, has resulted into inadequacy of price fetched which is amply clear from the substantial gap between the price fetched at the auction held on December 17, 2013 and the price now offered as an upset price. The increase from the price fetched by the highest bidder opponent No. 9 at Rs. 148 crores and now offered by the applicant at Rs. 214 crores is a substantial wide gap which has resulted into insufficiency of price fetched which even according to the apex court amounts to irregularity. The company court is the custodian of the property of the company under liquidation and therefore, such factors need to be considered even at this stage."

(emphasis1 supplied)

It is further submitted that merely because the aforesaid strong probability of likely increase in FSI as on December 17, 2013, came to be turned into a reality on March 4, 2014, which was followed by the higher offer of the respondent, it cannot be contended that the learned company judge has taken into consideration a subsequent event of March 4, 2014, which was in fact, a matter of coincidence. It is alternatively submitted that even if it is accepted that the learned company judge has taken into consideration the subsequent event of increase in FSI happened on March 4, 2014, there is nothing wrong in law to consider a subsequent significantly higher offer of the respondent herein for cancelling the earlier auction held on December 17, 2013.

It is submitted that in view of the aforesaid, it can be said that there was an occurrence of a forced material irregularity as mentioned above on December 17, 2013, even if one were to treat the order passed on December 17, 2013, as an order of confirmation of sale in favour of the appellant.

It is further submitted that the aforesaid circumstance is one of the valid grounds for recall of the order by de-confirming the said alleged confirmation of sale.

Now, so far as the decisions of the hon''ble Supreme Court in the case of Kayjay Industries (P) Ltd. Vs. Asnew Drums (P) Ltd. and Others, ; in the case of Sharawan Kumar Agarwal Vs. Shrinenp Investment Ltd. and Others, ; in the case of Sarvariya Exports Ltd. Vs. O.L. of Urmi Oil Limited and Others, and Ganga Retreat and Towers Ltd. and Another Vs. State of Rajasthan and Others, relied upon by learned counsel appearing on behalf of the appellant herein is concerned, it is submitted that none of the aforesaid decisions would be applicable to the facts of the case on hand and/or would be of any assistance to the appellant for the following grounds more particularly when in the present case the learned company judge has taken everything upon himself and has recalled its earlier order dated December 17, 2013, in exercise of inherent powers.

It is further submitted that the judgment of the apex court in the case of Kayjay Industries (P) Ltd. Vs. Asnew Drums (P) Ltd. and Others, , cannot be made applicable to the facts of the instant case, since the same was rendered in the peculiar facts wherein, property of a judgment-debtor was ordered to be sold by way of public auction as early as on January 11, 1966, for the satisfaction of the dues of the decree-holder in execution of a civil court decree. However, the said public auction could not take place as scheduled and thereafter till August, 1969, because of dilatory tactics adopted by the judgment-debtor by moving various authorities including the High Court, when neither the judgment-debtor could find out any person with better offer at any point of time nor had any other party or bidder come forward with better offer. It is further submitted that it was in context of the aforesaid facts that the apex court observed to the effect that it is not right to judge the unfairness of the price by hindsight wisdom and that the court should not go on adjourning the sale till a good price is got.

It is further submitted that similarly, the judgment dated March 6, 1990 of the Calcutta High Court in the case of Sharawan Kumar Agarwal Vs. Shrinenp Investment Ltd. and Others, , cited on behalf of the appellant herein cannot have any efficacy in the present matter, since a judgment of the another Division Bench of the Calcutta High Court rendered later in point of time, i.e., on September 15, 1992, by following the above referred judgment in the case of Sharawan Kumar Agarwal Vs. Shrinenp Investment Ltd. and Others, : [1990] 2 Comp LJ 231 (Cal) came to be set aside by the hon''ble Supreme Court on January 4, 1993, in the case of LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, .

It is further submitted that similarly, the judgment rendered by this court in the case of Sarvariya Exports Ltd. Vs. O.L. of Urmi Oil Limited and Others, , cannot have any efficacy in the present matter, since another judgment in the case of B.B. Lathia Vs. Shradhha Aromatics P. Ltd. and Others, , rendered by the Division Bench of this hon''ble court by following the said judgment of Sarvariya Exports Ltd. Vs. O.L. of Urmi Oil Limited and Others, has been set aside by the apex court in the case of Shradhha Aromatics Private Limited Vs. O.L. of Global Arya Industries Limited and Others, .

It is further submitted that the judgment of the apex court in the case of Ganga Retreat and Towers Ltd. and Another Vs. State of Rajasthan and Others, , also cannot have any applicability to the facts of the present case. In the said case before the apex court, auction was held on December 21, 1994, with a liberty to construct with FAR (floor area ratio) of 2, followed by execution of a sale deed on January 7, 1997, with FAR 2. However, in the meantime, the law got changed on June 28, 1996, when FAR was reduced to 1.75. Due to this, authority approved plans on February 22, 1997, with FAR of 1.75. It is submitted that appellant pleaded that the sale contract in question had got frustrated because of fraudulent misrepresentation regarding FAR. It is further submitted that the apex court while rejecting the said plea, observed that there cannot be estoppel to law and that the appellant had, in fact, already acted on FAR 1.75 by commencing construction.

Making above submissions and relying upon the above decisions, it is requested to dismiss the present appeal and to confirm the order passed by the learned company court with a direction to expedite the compliance with various directions given by the learned company judge in the impugned order dated August 11, 2014, under challenge, so that fresh auction of the land in question with an upset price at Rs. 214 crores is conducted for procuring the best market price thereof.

Ms. Amee Yajnik, the learned advocate appearing on behalf of the official liquidator has as such supported the order passed by the learned company judge by submitting that the official liquidator would always be interested to see that the maximum fair and adequate price of the properties of the company in liquidation is fetched.

In reply Shri Mihir Joshi, learned counsel appearing on behalf of the appellant has submitted that none of the judgments relied upon by respondent No. 1 herein--original applicant--Balleshwar Greens P. Ltd., would be applicable to the facts of the present case.

It is submitted that in the case of LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, one of the terms of the offer was that even confirmation of sale is liable to be set aside by the High Court as per clause 11 of the conditions of offer. It is submitted that no clause similar to clause 11 is found in the facts of the present case. It is further submitted that in that case the court, at first instance, had never confirmed the sale and, opportunities were granted to the parties to increase their offer. Therefore, the principle laid down in LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, would not be applicable to the facts of the present case.

It is further submitted that even in the case of LICA (P.) Ltd. (No. 2) Vs. Official Liquidator and Another, one of the terms of the offer was that even confirmation of sale is liable to be set aside by the High Court as per clause 11 of the conditions of offer. Clause 11 as extracted in the said judgment reads as under (page 795):

"11. The High Court may set aside the sale in favour of the purchaser/purchasers even after the sale is confirmed and the purchase consideration is paid on such terms and conditions as the court may deem fit and proper for the interest and benefit of creditors, contributories and all concerned and/or for public interest."

It is further submitted that no such clause similar to the aforesaid clause 11 is found in the facts of the present case. It is further submitted that in LICA (P.) Ltd. (No. 2) Vs. Official Liquidator and Another, , the hon''ble Supreme Court specifically observed that the order passed by the Supreme Court in LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, yielded the result that the property which would have been finalised at Rs. 45 lakhs, fetched Rs. 1.10 crores and in the hon''ble Supreme Court a further offer of Rs. 1.25 crores is made and therefore, the principle laid down in LICA (P.) Ltd. (No. 2) Vs. Official Liquidator and Another, would not be applicable to the facts of the present case.

It is further submitted that in the case of Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, , the hon''ble Supreme Court has held that when correct market value of the assets was not properly known to the court and the sale was confirmed at a grossly inadequate price, it was open to the court to set it at naught in the interest of the company, its secured and unsecured creditors and its employees. It is submitted that in that case the hon''ble Supreme Court further observed that Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, was keen to purchase the property, however, by paying only the bare minimal amount and to take advantage of sale by the liquidator in the hope that if there are no other purchasers, it would purchase the company at a price which is abnormally below the market price. It is further submitted that in the case of Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, there was a specific condition 11 in the terms and conditions of sale which empowered the court to set aside the sale. It is submitted that none of the aforesaid facts are found in the facts of the present case.

It is further submitted by Shri Joshi, learned counsel that the hon''ble Supreme Court of India in the case of Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others, has explained the true ratio of the judgment in the case of Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, . It is submitted that the hon''ble Supreme Court in the case of Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others, has stated that the ratio in Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, was that if there is fraud then even after the confirmation, the sale can be set aside because it is well-settled that fraud vitiates everything. It is submitted that in the facts of the present case there is no allegation of fraud made by Balleshwar and further, the hon''ble Supreme Court of India in the case of Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others, has stated that the decision in Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, cannot be treated as laying down any absolute rule that a confirmed sale can be set aside in all circumstances.

It is further submitted that even the Division Bench of this hon''ble court in the case of Sarvariya Exports Ltd. Vs. O.L. of Urmi Oil Limited and Others, had the occasion to consider the judgment of the apex court in the case of Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, . It is further submitted that on the perusal of the said judgment of the Division Bench of this hon''ble court, it would be clear that the ratio laid down in the judgment of Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, would not be applicable to the facts of the present case.

It is further submitted that the learned single judge of this court in the case of Chaudhary Brothers v. Official Liquidator of Bhagwati Glass Container Ltd. [2014] 2 GLH 271 considered the ratio laid down by the apex court in the case of Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, . It submitted that on perusal of the facts it is evident that in the case of Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, , the correct market value of the property was not properly known to the court and the sale was confirmed at grossly inadequate price. It is submitted that in the present case, there is no allegation by Balleshwar that the correct market value of the property was not known to the court while confirming the sale by order dated December 17, 2013. It is further submitted that it is not the case of Balleshwar that at the time when the sale was confirmed by this court in favour of Vedica, the price realised was inadequate. It is further submitted that it is not even the case of Balleshwar, in the present application, that it seeks to offer substantive higher price based on the facts and circumstances prevalent at the time when this court passed the order dated December 17, 2013 and in fact, Balleshwar is offering the higher price only because subsequently the FSI has increased and the land in question, based on subsequent facts, may now fetch more price.

It is further submitted that in the case of FCS Software Solutions Ltd. Vs. LA Medical Devices Ltd. and Others, : [2008] 10 SCC 440 , the hon''ble Supreme Court of India observed that certain facts which were necessary to be brought to the notice of the indenting purchasers were not set out in the proclamation of sale nor were disclosed at the time of sale notice and they related to valuation of movable and immovable properties, fixation of reserve price, non-inventory of plant and machinery, etc. It is submitted that the hon''ble Supreme Court of India noticed several irregularities in the auction. It is submitted that none of the aforesaid circumstances are present in the facts of the present case and no such averment has been made by Balleshwar. It is submitted that therefore, in the circumstances, the judgment in the case of FCS Software Solutions Ltd. Vs. LA Medical Devices Ltd. and Others, : [2008] 10 SCC 440 is not applicable at all.

It is further submitted that this hon''ble court in the case of Chaudhary Brothers v. Official Liquidator of Bhagwati Glass Container Ltd. [2014] 2 GLH 271 also referred to the judgment of FCS Software Solutions Ltd. Vs. LA Medical Devices Ltd. and Others, : [2008] 10 SCC 440 and explained the ratio laid down in the judgment of FCS Software Solutions Ltd. Vs. LA Medical Devices Ltd. and Others, : [2008] 10 SCC 440 . It is submitted that on perusal it is evident that the judgment in the case of FCS Software Solutions Ltd. Vs. LA Medical Devices Ltd. and Others, : [2008] 10 SCC 440 is not applicable at all to the facts of the present case.

It is further submitted by Shri Joshi, learned counsel appearing on behalf of the appellant that the judgment relied upon by the original applicant in the case of Shraddha Aromatics P. Ltd. v. Official Liquidator of Shraddha Aromatics P. Ltd. Vs. Official Liquidator of Global Arya Industries Ltd. and Others, is also not applicable to the facts of the present case. It is submitted that first of all, the said judgment was passed in the peculiar facts of that case and further, the hon''ble Supreme Court of India reiterated the principle that ordinarily, the court hates to accept the offer made by any bidder or a third party after acceptance of the highest bid/offer. It is submitted that in the said judgment, the hon''ble Supreme Court of India observed that if the order of the Division Bench is sustained, the creditors of the company are bound to suffer. It is submitted that in the facts of the present case, no averment is made by Balleshwar that by confirming the sale in favour of Vedica, the creditors of Omex Investors Ltd. (in liquidation) are bound to suffer. It is submitted that on the contrary, in the facts of the present case, the official liquidator, workers and the secured creditors expressed that the bid of Vedica be accepted by this hon''ble court. It is submitted that as the said judgment was passed in the peculiar facts of that case, the same would have no bearing on the facts of the present case.

It is further submitted that the judgment of Shraddha Aromatics P. Ltd. Vs. Official Liquidator of Global Arya Industries Ltd. and Others, is also referred to by this hon''ble court in the case of Chaudhary Brothers v. Official Liquidator of Bhagwati Glass Container Ltd. [2014] 2 GLH 271 . It is submitted that this hon''ble court in the case of Chaudhary Brothers v. Official Liquidator of Bhagwati Glass Container Ltd. [2014] 2 GLH 271 has culled out the true ratio of the judgment delivered in Shraddha Aromatics P. Ltd. Vs. Official Liquidator of Global Arya Industries Ltd. and Others, . It is submitted that on perusal of paragraph ll(m) of the judgment of Chaudhary Brothers v. Official Liquidator of Bhagwati Glass Container Ltd. [2014] 2 GLH 271 , it becomes evident that the judgment delivered in Shraddha Aromatics P. Ltd. Vs. Official Liquidator of Global Arya Industries Ltd. and Others, would have no bearing to the facts of the present case.

It is further submitted by Shri Joshi, learned counsel that in the case of Suchit Pavitra Industrial Co-operative Society, M/s. Suchit badly defaulted in making the payment of the rest of the bid amount and that the balance amount which was to be deposited by April 2007 was deposited only on August 8, 2008. It is submitted that even the application for extension of time for the deposit was rejected by the court. It is submitted that during the said period other bidders made the offer and M/s. Suchit thereafter carried the matter before the Division Bench and eventually before the hon''ble Supreme Court of India. It is submitted that M/s. Suchit before the hon''ble Supreme Court stated that it was may to make the matching offer as made by other bidders. It is submitted that other bidders thereafter increased their offer further before the hon''ble Supreme Court of India. It is in these facts and circumstances of the case, the hon''ble Supreme Court directed fresh bid. It is humbly submitted that the order passed by the hon''ble Supreme Court of India in the case of Suchit Pavitra Industrial Co-operative Society has no bearing to the facts of the present case. It is submitted that it is important to highlight that the bidders who had offered higher price had not participated at the time of auction. It is further submitted that in the instant case, Balleshwar was very much a party to the auction and had failed to offer higher price than that offered by Vedica and confirmed by the hon''ble company court.

It is further submitted by Shri Joshi, learned counsel appearing on behalf of the appellant that in the case of Manu Tilling Co. P. Ltd. v. Patel Phoschem P. Ltd., the learned single judge accepted the bid of Patel Phoschem at Rs. 2.05 crores and 25 per cent of the bid amount was to be paid within a period of one month and remaining 75 per cent within next three months. It is submitted that before the expiry of one month, Manu Tiling Co. P. Ltd. (Manu) submitted an application for reviewing the order passed by the learned single judge accepting the bid of Patel Phoschem and Patel Phoschem requested the court to direct Manu to deposit some amount. It is submitted that thereafter the learned single judge further carried out inter se bidding between Manu and few other bidders and ultimately, the bid of Manu was accepted at Rs. 2.70 crores by order dated January 24, 2008. It is submitted that being aggrieved, Patel Phoschem challenged the order of the learned single judge in appeal and at the time of hearing of the appeal, Patel Phoschem showed its willingness to increase its bid up to Rs. 2.70 crores. It is submitted that in the light of the said facts, the Division Bench of this hon''ble court, by its order dated August 27, 2012, confirmed the sale in favour of Patel Phoschem. It is further submitted that aggrieved by the order passed by the Division Bench, Manu filed appeal before the hon''ble Supreme Court of India. It is submitted that the hon''ble Supreme Court of India by its order dated October 8, 2012, noted that the sum of Rs. 2.70 crores deposited by Manu with the official liquidator have now earned interest at 8 per cent per annum and thereby accumulated to a sum of Rs. 3.78 crores. It is submitted that the hon''ble Supreme Court also noted that Manu is revising its bid from Rs. 2.70 crores to Rs. 4 crores inclusive of the interest that has been earned on the deposit already made. It is submitted that at the time of hearing held on August 13, 2014, Patel Phoschem alternatively submitted that if the hon''ble Supreme Court is to consider the higher bid of Rs. 4 crores offered by Manu, there should be fresh auction. It is in these circumstances that the hon''ble Supreme Court directed the official liquidator to initiate a fresh process of auction. It is submitted that further, it is important to highlight that the bidder who had offered higher price had not participated at the time of auction and in the instant case, Balleshwar was very much a party to the auction and had failed to offer higher price than that offered by Vedica and confirmed by the hon''ble company court. It is submitted that from the aforesaid facts it is evident that the said facts have no bearing to the facts of the present case. It is submitted that in the facts of the present case, it is not even the case of Balleshwar that the belated higher offer made by it is based on the facts and circumstances prevailing as on December 17, 2013. On the contrary, the higher offer of Balleshwar is based upon the facts subsequent to December 17, 2013. It is submitted that it is the specific case of Balleshwar that based on subsequent facts the value of the land in question is likely to fetch more price. It is submitted that in the circumstances, it is not the case of Balleshwar that on the date when the hon''ble company court confirmed the sale in favour of Vedica, the price offered by Vedica was inadequate.

It is further submitted that in the case of Vitta Mazda (supra), the company court by its order dated December 18, 2004, did not confirm the sale in favour of Manoj I. Naik (Manoj). It is submitted that the learned company court noted that the market value of the land is much more than what is being offered by Manoj. It is further submitted that being aggrieved by the order dated December 18, 2004, Manoj preferred appeal before the Division Bench and the Division Bench vide its order dated August 30, 2011, rejected the appeal in view of the huge difference in the offer made by Manoj and the value as shown in the valuation report. It is submitted that Manoj also filed review application against the order dated August 30, 2011 and the same came to be rejected by the Division Bench vide order dated August 24, 2012. It is submitted that Manoj filed an appeal before the hon''ble Supreme Court of India against the orders dated August 30, 2011 and August 24, 2012. It is further submitted that at the time of hearing before the hon''ble Supreme Court, Manoj submitted that he is willing to match the valuation of report of Rs. 6.25 crores. It is submitted that at the time of hearing other bidders also appeared and made the offers of Rs. 25 crores and Rs. 30 crores, respectively. It is submitted that the hon''ble Supreme Court of India directed the parties to deposit a sum of Rs. 10 crores. It is in these circumstances, the hon''ble Supreme Court of India directed the official liquidator to proceed with the fresh auction. It is further submitted that first of all the bid of Manoj was never accepted by the company court or by the Division Bench of the High Court and that there was no confirmation of sale in favour of Manoj. It is submitted that Manoj before the hon''ble Supreme Court increased the offer from Rs. 1.03 crores to Rs. 6.25 crores. It is submitted that by such increase there was never any confirmation or acceptance of the bid by the hon''ble Supreme Court of India and that there were other offers also which were much more than the offer made by Manoj. It is in these circumstances that the hon''ble Supreme Court directed fresh auction. It is submitted that on perusal of the orders, it becomes evident that even the company court would have directed fresh auction based on the order dated December 18, 2004, passed by the company court or order dated August 30, 2011, passed by the Division Bench. It is submitted that it is not known as to how the said orders passed by the company court, the Division Bench and the hon''ble Supreme Court helps the case of Balleshwar in any manner whatsoever.

It is further submitted by Shri Joshi, learned counsel appearing on behalf of the appellant that in the case of Abhishek Shops and Warehouse Co-operative Society Ltd. v. Monali Textile, the sale was confirmed by the learned company court on September 11, 2003, in favour of Abhishek Shops. It is submitted that the said order was recalled by order dated October 16, 2003 and against the recall order Abhishek Shops preferred appeal before the Division Bench. It is further submitted that in that case there was no dispute that the valuation of the property in question was done on January 29, 1998, while the sale was confirmed on September 11, 2003 (almost after 5 years). It is further submitted that the Urban Land Ceiling Act was repealed in June 1999 and the said fact was not brought to the notice of the court as such repeal may had the effect of augmenting the price. It is submitted that further, the recall application was made within 10 days and that substantial higher price was offered. It is submitted that the court noted that under the Land Acquisition Act 10 per cent increase per year in the market price is recognised in law for determination of the market price of the property and the hon''ble court keeping the said principle in mind came to the conclusion that the valuation report of January/June 1998 at Rs. 3.88 crores and 10 per cent increase per year till September 11, 2003, the market price of the land in question would be far more than Rs. 4.05 crores at which the sale was continued vide order dated September 11, 2003. It is submitted that it is in such facts and circumstances of the case that the Division Bench did not interfere with the order dated October 16, 2003, which recalled the order dated September 11, 2003. It is therefore submitted that in view of the aforesaid, the judgment in the case of Abhishek Shops and Warehouse Co-operative Society Ltd. v. Monali Textile has no bearing at all to the facts of the present case.

It is further submitted by Shri Joshi, learned counsel appearing on behalf of the appellant that even the submissions made by Shri Trivedi, learned counsel appearing on behalf of the original applicant--Balleshwar that by order dated December 17, 2013, the learned company court had not confirmed the sale in favour of the appellant herein is absolutely baseless and without any merit.

It is submitted that as such by order dated December 17, 2013, the learned company court accepted the bid of Vedica as being the highest bidder. It is submitted further that the bid of Vedica is accepted as per the tender conditions. It is submitted that by the said order the sale is confirmed in favour of Vedica.

It is further submitted that no where it has been stated by the learned company court in its order dated December 17, 2013, that the learned company court has not yet confirmed the sale in favour of Vedica or that the learned company court would confirm the sale subsequently. It is submitted that on the contrary, the learned company court by its aforesaid order dated December 17, 2013, directed the official liquidator to take appropriate actions as envisaged under the conditions of the tender notice, more particularly conditions Nos. 29, 32 and 33. It is submitted that considering various conditions of the tender notice when the higher bid of the applicant of Rs. 148 crores was accepted by the learned company court vide order dated December 17, 2013, it can be said that by the order dated December 17, 2013, the learned company court confirmed the sale in favour of Vedica and thereafter nothing further was required to be done except executing the sale deed by the official liquidator. In support of his submission that by order dated December 17, 2013, the learned company court confirmed the sale in favour of Vedica, Shri Joshi, learned counsel appearing on behalf of the appellant has heavily relied upon clauses 5, 8, 9, 13, 17, 20, 23, 29 and 33 of the terms and conditions.

Now, so far as the impugned judgment and order passed by the learned company court recalling its earlier order dated December 17, 2013, in exercise of inherent powers under rule 9 of the Companies (Court) Rules is concerned, it is submitted by Shri Joshi, learned counsel appearing on behalf of the appellant that the learned company court has failed to appreciate that mere offering higher price at a later stage on second though would not automatically lead the learned company court to exercise its inherent jurisdiction under rule 9 of the Companies (Court) Rules and that too without considering the settled principles for recall, delay and laches, waiver, estoppel, acquiescence, etc.

Now, so far as the reliance placed upon the decisions relied upon by learned counsel appearing on behalf of the Balleshwar in support of his submission that the learned company court has not committed any error in exercising the inherent powers, it is submitted by Shri Joshi, learned counsel appearing on behalf of the appellant that none of the judgments relied upon on behalf of the original applicant can be made applicable to the facts of the present case.

It is submitted that in the case of Nileshbhai R. Patel v. Official Liquidator, the Division Bench of this hon''ble court was satisfied that the two bidders, in that case, who happened to be brothers, misled and misdirected the auction process which the Division Bench considered fraud or mischief with the court. It is submitted that it is in such facts of the case that the court deemed it proper to recall its order. It is further submitted that there is no averment by Balleshwar that any fraud or mischief has been played by Vedica with the court.

It is further submitted that in the case of Girish Bhagwatprasad Huf through Karta and Manager Aastik and Another Vs. Industrial Development Bank of India Ltd. (IDBI Ltd.) and Others, and one another were the shareholders of the company in liquidation. It is submitted that the said shareholders had pledged their shares with IDBI. It is further submitted that subsequently, IDBI executed the deed of assignment in favour of River Front Properties P. Ltd., by transferring all the rights of IDBI in respect of its claim against the company with security interest including the pledge of the equity shares. It is submitted that IDBI moved the company court with an application to ratify its action in respect of the deed of assignment under section 536 of the Companies Act, 1956. It is further submitted that though the aforesaid shareholders were directly concerned with the deed of assignment, more particularly the equity shares, the said shareholders were not made parties by IDBI. As the aforesaid shareholders were not heard, the company court recalled its earlier order. It is submitted that the learned company court recalled the order as the proper and necessary party was not heard. In the present case it is nobody''s complaint that necessary or proper party was not heard at the time when the company court passed the order dated December 17, 2013, confirming the sale in favour of Vedica.

It is further submitted that in the case of Vishnu Agarwal Vs. State of U.P. and Another, , the matter was listed for hearing before the High Court on September 2, 2003. It is submitted that no one appeared on behalf of revisionist and counsel for the respondents appeared and in these circumstances, the judgment was passed. It is submitted that subsequently, an application was moved for recall of the order dated September 2, 2003, stating that the case was shown in the computer list and not in the main list of the High Court and hence, counsel for revisionist had not noted the case and hence he did not appear. It is submitted that the High Court recalled the order dated September 2, 2003 and the same was challenged by Vishnu Agarwal. It is submitted that the hon''ble Supreme Court rejected the appeal and while rejecting the appeal, the hon''ble Supreme Court observed the distinction between recall and review and treated the application file before the High Court as recall as the order dated September 2, 2003, was passed without giving an opportunity of hearing to an affected party.

It is submitted that in the facts of the present case, there is no averment that an opportunity of hearing was not given to a party while passing the order dated December 17, 2013 and it is not known as to for which principle of law Balleshwar is relying upon the said judgment.

It is further submitted that in the case of G.T. Swamy and Another Vs. Goodluck Agencies and Another, , the winding up order was passed by the court and thereafter, the petitioner had settled all the claims against the company. It is further submitted that the petitioner made a prayer for recall of the winding up order and the petitioning-creditor had not opposed the recall of the winding up order as their claim was satisfied. It is submitted that none of the creditors opposed the application for recall of the winding up order and it is in these circumstances that the court passed an order for recall of the winding up order. It is further submitted that in the instant case, Vedica is very much objecting to the recall of the order dated December 17, 2013, inter alia, on the ground that mere offering higher price based on subsequent events would not lead the company court to exercise its inherent powers. It is submitted that there is no quarrel to the proposition that a company court has inherent powers. It is further submitted that the court can exercise its inherent powers provided the case falls within the four corners of exercise of inherent powers and that too after considering the principles of recall, delay and laches, suppression, waiver, estoppel and acquiescence which may arise in the facts of a given case.

It is submitted that in the case of Giovanola Binny (in liquidation), In re and Fertilizers and Chemicals Travancore Ltd. v. Official Liquidator, High Court of Kerala [1996] 4 Comp LJ 380 (Ker.), the official liquidator invited bids and the highest offer was made by State Bank of India for Rs. 52 lakhs. It is further submitted that Fertilizers and Chemicals offer was for Rs. 26.76 lakhs. It is submitted that the official liquidator sought permission of the court to confirm the sale in favour of State Bank of India. It is submitted that at this juncture, an application was filed by Fertilizers and Chemicals seeking a direction to the official liquidator that the official liquidator should sell the land to Fertilizers and Chemicals on paying the said price as quoted by State Bank of India. It is further submitted that Fertilizers and Chemicals also stated that it was willing to offer Rs. 66.09 lakhs. It is submitted that the court on considering the aforesaid facts directed the official liquidator to re-auction the property.

It is further submitted that in the aforesaid case there was no confirmation of sale in favour of State Bank of India. It is submitted that at the time when the court was considering confirmation of sale in favour of State Bank of India that Fertilizers and Chemicals approached the court with an offer of Rs. 66.09 lakhs. It is submitted that in the present case the court accepted the bid of Vedica and confirmed the sale in its favour. It is further submitted that Balleshwar approached the court with recall application after 4 months. It is submitted that it is not known as to how the said judgment is applicable in the facts of the present case.

It is further submitted that in the case of Maharana Mills Rashtriya Kamdar Sangh Vs. O. L. of Maharana Mills Ltd. and Others, , the question was as to whether any ad hoc disbursement can be made to the creditors or workers of a company in liquidation. It is submitted that the company court, in exercise of its inherent powers, came to the conclusion that when it has power to direct disbursement of the amounts in accordance with sections 529, 529A and 530, then such power to direct final disbursement would also include power to direct ad hoc disbursement and it is submitted that therefore, the said judgment has no bearing to the facts of the present case.

It is further submitted that the case of Rupa Ashok Hurra Vs. Ashok Hurra and Another, was a curative petition after the dismissal of review petition to prevent abuse of court''s process and to cure a grave miscarriage of justice. It is submitted that the hon''ble Supreme Court held that the grounds for such curative petition although cannot be enumerated exhaustively but a petitioner would be entitled to relief if he establishes (a) violation of principles of natural justice, and (b) non-disclosure on the part of the judge of his connection with the subject matter or parties giving scope for apprehension of bias. It is further submitted that first of all the grounds of curative petition would not apply to the facts of the present case. It is submitted that assuming that the grounds mentioned for curative petition would apply for the court to exercise its inherent powers, it is not shown by Balleshwar as to how any of the grounds laid down by the hon''ble Supreme Court of India applies to the facts of the present case.

Making above submissions and relying upon above decisions, Shri Joshi, learned counsel appearing on behalf of the appellant herein--Vedica has requested to allow the present appeal more particularly when at the relevant time, i.e., on December 17, 2013, nobody raised an objection that the price offered by the appellant of Rs. 148 crores is inadequate.

Heard learned counsel appearing on behalf of respective parties at length.

At the outset it is required to be noted that what is challenged in the present appeal is the impugned order passed by the learned company court recalling its earlier order dated December 17, 2013, by which the learned company court accepted the higher bid/offer made by the appellant herein of Rs. 148 crores for the land/property of the company in liquidation. It is also required to be noted at this stage that while passing the impugned order the learned company court has exercised the inherent powers conferred under rule 9 of the Companies (Court) Rules by taking upon itself the burden and accepting that certain relevant aspects which have a direct bearing on the market value/price of the land in question as on that day, such as potentiality of the land, etc., were not considered by him and that the offer made by the appellant herein of Rs. 148 crores was inadequate.

While considering the submissions made by learned counsel appearing on behalf of the rival parties, some of the observations and findings recorded by the learned company court made while passing the impugned order are required to be considered which are as under:

"35. ... It is an admitted position that the lands put to auction are situated in the prime locality of Ahmedabad City, having potentiality of commercial development and it is situated in the main market area...

It may be noted that the auction is governed by the terms and conditions which are at annexure A to this application. Considering the terms and conditions of the sale and more particularly, condition No. 5 provides that the offers received by the official liquidator shall be opened before this court. Condition No. 7, inter alia, provides that the official liquidator reserves the right to accept the highest or any offer which will be subject to sanction and confirmation of this court. Condition No. 8 provides for inter se bidding to be held in the court. Condition No. 9 provides that the final offer, after inter se bidding so received, will be considered by the High Court for sanction or otherwise. The said condition further provides for payment of 25 per cent excluding EMD within one month or such time as the High Court stipulates from the date of final acceptance of particular offer and the balance amount of purchase consideration will have to be paid within three months thereafter by the purchaser or within such time as may be fixed by this court. Condition No. 17 provides that the property shall be handed over to purchaser on payment of full sale price to the official liquidator and/or subject to such directions as the court may issue in such matters. Condition No. 27 provides for a particular declaration to be incorporated in the deed of conveyance. Similarly, condition No. 29 provides for return of EMD to the unsuccessful bidders including the second highest bidder, wherein it is, inter alia, provided that the EMD amount paid by the second highest bidder will be returned only after receipt of 25 per cent of sale consideration from the successful bidder. Condition No. 31 provides for a stipulation that no nomination will be allowed. Condition No. 33 provides that the successful bidder will have to execute the sale deed within one month from the date of payment of full sale consideration after confirmation of sale by this court. Thus, as per the terms and conditions of auction at the first instance, the highest bidder is to be identified. It is no doubt true that thereafter, as per the conditions, on payment of full price, the highest bidder is to be handed over the possession of the lands in question which, as per condition No. 33, is to be followed by execution of a sale deed. In the instant case, opponent No. 9 emerged to be the highest bidder and offered price of Rs. 148 crores. The facts reveal that as per condition No. 9, opponent No. 9 paid 25 per cent of the purchase price on January 6, 2014. As the facts emerge in this application thereafter, opponent No. 9 approached this court by way of filing O.J. Misc. Civil Application No. 53 of 2014, which came to be disposed of on an undertaking filed by opponent No. 9, whereby opponent No. 9 was granted 4 instalments as provided in paragraph 5 of the order dated March 31, 2014 and opponent No. 9 was also directed to pay interest at the rate of 10 per cent starting from April 16, 2014, till the last instalment of Rs. 24.5 crores is received, to be calculated proportionately on the outstanding/unpaid amount. The applicant challenged the said order dated March 31, 2014, by way of filing an appeal being O.J. Appeal No. 9 of 2014 on April 16, 2014. Incidentally, on the same day opponent No. 9 paid the remaining amount of consideration, i.e., Rs. 106.5 crores. Though it is disputed by the present applicant, the records reveal that on April 17, 2014, when O.J. Appeal No. 9 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 the sale deed is not executed. In opinion of this court, opponent No. 9 and the official liquidator have still to adhere to condition No. 33 of the terms and conditions in order to see that the sale deed is executed. The draft of such a sale deed is to be placed before the concerned company court for its approval and admittedly, before any such procedure as envisaged under condition No. 33 could be undertaken by the official liquidator as well as opponent No. 9, the present applicant raised its offer to Rs. 160 crores and as per the order dated April 17, 2014, passed by the Division Bench of this court in O.J. Appeal No. 9 of 2014, the said amount is deposited with the official liquidator on April 17. 2014. The applicant thus offered Rs. 12 crores more than the highest bidder, i.e., opponent No. 9 on the said day. It may further be noted that as aforesaid, during the course of hearing of this application, the applicant again enhanced the offer from Rs. 160 crores to Rs. 200 crores and deposited further Rs. 40 crores as per the order dated May 9, 2014, passed by this court. It may further be noted that during the course of hearing, as learned counsel for the official liquidator as well as learned counsel for the Textile Labour Association pointed out that since 1990, the workmen are waiting for their legal dues, which according to the affidavit filed by Textile Labour Association comes to approximately Rs. 14 crores, the applicant endeavoured to deposit further amount of Rs. 14 crores as per order dated May 9, 2014. In these view of the facts therefore, today the offer given by the applicant stands at Rs. 214 crores. In this set of factual background therefore, this application needs to be considered.

... As provided under rule 9 of the Companies (Court) Rules, 1959, this court has inherent powers to consider this application in order to secure ends of justice between the parties. The company court while conducting the auction is the trustee and custodian of the property of the erstwhile company more particularly, it has to protect the interest of the workers, secured creditors, unsecured creditors and the shareholders. In light of glaring difference in the price offered by the applicant and the price obtained in the auction, this court cannot rely upon any technicalities and in opinion of this court, on the contrary, it owes a duty to exercise inherent powers under rule 9 of the Companies (Court) Rules, 1959. On appreciating the ratio laid down by the judgments cited by the applicant as well as opponent No. 9, in facts of this case, the present application is held to be maintainable ... as the paramount consideration of the company court is to see that maximum market price is fetched and considering the gap between the price determined in the auction and the price now offered, the price fetched in the auction is grossly inadequate. As noted hereinabove, it is an admitted position that the sale deed is not executed and thus, as per the terms and conditions of auction, the sale procedure is not yet complete...

Even if it is construed that the offer of Rs. 148 crores made by opponent No. 9 amounts to confirmation of sale, the fresh offer now given by the applicant who himself was also a bidder (second highest bidder) at the auction held on December 17, 2013, before this court is very high and the same therefore demonstrates that the offer which was accepted by this court by the order dated December 17, 2013, was accepted at a grossly inadequate price . . . However, in the instant case, the offer made by the applicant is significantly higher than the price which is received in the auction and therefore, the present case falls in the exception of de-confirming the sale. Considering the ratio laid down by the apex court in the case of LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, , LICA (P.) Ltd. (No. 2) Vs. Official Liquidator and Another, , Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, and Shraddha Aromatics P. Ltd. Vs. Official Liquidator of Global Arya Industries Ltd. and Others, , when the higher price which is now offered is substantially higher, it would be in the interest of the company and its creditors to recall the order impugned in this application. ... However, as observed hereinabove, in facts of this case, the court is satisfied that the price was inadequate. ... It is no doubt true that the company court does not possess expertise in determination of true and correct market value of the land put to auction, however, while considering the bid in the auction, it has to consider the overall facts, circumstances as well as factors which would fetch maximum price of the land. The auction held by a company court is little different than the auction held in common parlance. In the instant case, the highest bid which is accepted by the court made by opponent No. 9 rests at Rs. 148 crores. The facts reveal that at the initial stage, the same was increased by Rs. 12 crores on April 16, 2014. However, thereafter, it is an admitted position that the same has been increased to Rs. 200 crores and lastly at Rs. 214 crores. Thus, the gap of price between the highest bidder and the applicant as on date is of Rs. 66 crores.... On the date on which the highest bid came to be accepted, i.e., on December 17, 2013, it is no doubt true that the FSI (Floor Space Index) of the area in which the land is situated was 1 and with effect from March 17, 2014, it has been increased to 1.8, even in the order passed by this court while fixing the upset price, this factor was considered. With the increase in FSI even if it is roughly calculated, the extent of possible/permissible construction would increase from 13,895 sq. mtrs. to 24,840 sq. mtrs., meaning thereby, the permissible construction would be 11,040 sq. mtrs. more. On the date on which, the auction came to be held by this court and while accepting the highest bid of opponent No. 9, the change in FSI was not sanctioned but was only in offing and therefore, this court have had no occasion to consider the said factor. While determining the market value, factor of potential development is an important factor. Considering the aforesaid development of increase in FSI which was in offing, though uncertain, could not be considered by this court, which in opinion of this court has led to insufficient determination of the true and correct market value of the lands in question. Though the increase in FSI is an event which has occurred after acceptance of highest bid still however, the vital factor of potentiality of development could not be considered, which has resulted into irregularity as well as injury and as held by the Division Bench of the Calcutta High Court in the case of Sharawan Kumar Agarwal Vs. Shrinenp Investment Ltd. and Others, , the same constitute something more than merely a higher price.

... However, such a vital factor of potentiality of development which could not be considered by this court in the circumstances narrated hereinabove, has resulted into inadequacy of price fetched which is amply clear from the substantial gap between the price fetched at the auction held on December 17, 2013 and the price now offered as an upset price. The increase from the price offered by the highest bidder opponent No. 9 at Rs. 148 crores and now offered by the applicant at Rs. 214 crores is a substantial wide gap which has resulted into insufficiency of price fetched which even according to apex court amounts to irregularity...

The company court has to see that the best price of the property is fetched, the price is not to be determined in relation to the dues of the stakeholders, but maximum market price has to be fetched and considering the wide gap between the price fetched and offered by the applicant in this application, this court has to exercise its inherent powers under rule 9 of the Companies (Court) Rules, 1959 and as rightly contended by the applicant, if not considered, the same would amount to travesty of justice.

... The very quantum of the fresh offer itself constitutes satisfactory material that the price received at the sale process was grossly inadequate and the factor like FSI which has direct impact and effect on the potential development could not be considered by this court."

In backdrop of and/or considering the aforesaid observations and findings recorded by the learned company court, submissions made by learned counsel appearing on behalf of the respective parties are required to be considered.

From the aforesaid observations and findings recorded by the learned company court made by recalling its earlier order dated December 17, 2013, accepting the higher bid of the appellant of Rs. 148 crores it emerges that the learned company court has specifically observed and held that while accepting the higher bid of the appellant of Rs. 148 crores on the date of auction, i.e., on December 17, 2013, the relevant factor such as potential development of the land which can be said to be a relevant factor while determining the market price was not considered by him. That the learned company court has also specifically observed that the highest price offered by the appellant of Rs. 148 crores which came to be accepted vide order dated December 17, 2013, was an inadequate price. That the factum of change in the FSI was in offing and the aforesaid relevant factor of change in the FSI which would have a direct bearing on the potential development of the land was not considered by the court which has resulted into irregularity and injury. While observing as stated hereinabove, the learned company court has taken everything upon itself and has accepted that the relevant factors like potential development of the land even as on December 17, 2013, were not considered by him which has resulted into accepting the inadequate price and irregularity and injury and therefore, this is a fit case to exercise the inherent powers conferred under rule 9 of the Companies (Court) Rules. Therefore, as such the learned company court has tried to correct the error committed by it and has recalled its earlier order dated December 17, 2013, accepting the higher offer of the appellant of Rs. 148 crores (market price of Rs. 148 crores which is held to be grossly inadequate and substantially low) and has passed the order to re-auction the land by fixing the upset price at Rs. 214 crores. Under the circumstances, when the learned company court/judge accepted that at the time of accepting the offer made by the appellant of Rs. 148 crores on December 17, 2013, the factor like FSI which has direct impact and effect on the potential development could not be considered by him, which has resulted into irregularity in accepting the grossly inadequate price offered by the appellant of Rs. 148 crores and when in exercise of the inherent powers the learned company court has recalled its earlier order dated December 17, 2013, it cannot be said that the learned company court has committed any error and/or exceeded its jurisdiction in exercising the inherent powers conferred under rule 9 of the Companies (Court) Rules. At this stage it is required to be noted that as such the order dated December 17, 2013, accepting the offer of the appellant of Rs. 148 crores was passed by the very learned judge who has passed the impugned order of recalling the order dated December 17, 2013. Therefore, as such he is the best person to opine and consider what was considered by him at the time of passing the order dated December 17, 2013, accepting the offer of the appellant of Rs. 148 crores and what was not considered by him, which was required to be considered.

Now, considering the facts and circumstances and when the learned company court has recalled its earlier order dated December 17, 2013, in exercise of the inherent powers under rule 9 of the Companies (Court) Rules, the law on the point and the decisions relied upon by learned counsel appearing on behalf of the respective parties are required to be considered. The hon''ble Supreme Court in the case of Vishnu Agarwal Vs. State of U.P. and Another, , considering its earlier decision in the case of Asit Kumar Kar Vs. State of West Bengal and Others, has observed that there is a distinction between the review petition and the recall petition. It is observed that while in a review petition, the court considers on merits whether there is an error apparent on the face of record, in a recall petition, the court does not go into the merits but simply recalls an order which was passed without giving any opportunity of hearing to an affected party. In the case of Subrata Roy Sahara Vs. Union of India (UOI) and Others, , the hon''ble Supreme Court has observed that correction of a wrong order would never put anyone to shame. It is observed that recognition of a mistake and its rectification would certainly not put us to shame. In paragraph 7 the hon''ble Supreme Court has observed and held as under:

"7. Now the embarrassment part. Having gone through the pleadings of the writ petition we were satisfied, that nothing expressed therein could be assumed, as would humiliate or discomfort us by putting us to shame. To modify an earlier order passed by us, for a mistake we may have committed, which is apparent on the face of the record, is a jurisdiction we regularly exercise under article 137 of the Constitution of India. Added to that, it is open to a party to file a curative petition as held by this court in Rupa Ashok Hurra Vs. Ashok Hurra and Another, . These jurisdictions are regularly exercised by us, when made out, without any embarrassment. Correction of a wrong order, would never put anyone to shame. Recognition of a mistake, and its rectification, would certainly not put us to shame. In our considered view, embarrassment would arise when the order assailed is actuated by personal and/or extraneous considerations, and the pleadings record such an accusation. No such allegation was made in the present writ petition. And therefore, we were fully satisfied that the feeling entertained by the petitioner, that we would not pass an appropriate order, if the order impugned dated March 4, 2014, was found to be partly or fully unjustified, was totally misplaced."

In the case of G.T. Swamy and Another Vs. Goodluck Agencies and Another, , while considering the power of a company court to recall order of winding up passed by it and while considering the inherent power of the court it is observed and held that a combined reading of rules 6 and 9 of the Companies (Court) Rules indicates that inherent power of the company court can be exercised in the manner provided under section 151 of the Code, except in cases where the Companies Act and the Rules provided otherwise. It is further held that it is open to the company court, in exercise of its inherent power in order to do justice between the parties, and to recall the order of winding up made by it earlier.

In the case of Girish Bhagwatprasad Huf through Karta and Manager Aastik and Another Vs. Industrial Development Bank of India Ltd. (IDBI Ltd.) and Others, , the learned single judge of the company court after considering the various decisions on the point more particularly on the inherent powers of the company court has observed and held that the company court has inherent powers under rule 9 of the Companies (Court) Rules to pass necessary orders to do complete justice to the parties by recalling its earlier order if it finds that there was total lack of jurisdiction to deal with particular application whereon the order was made and it was not properly apprised of the correct facts or correct position of law by party in whose favour the order is passed.

While considering the observations of the hon''ble Supreme Court in the case of A.R. Antulay Vs. R.S. Nayak and Another, , the hon''ble Supreme Court in the case of Rupa Ashok Hurra Vs. Ashok Hurra and Another, has observed and held that court can exercise its inherent power in the event of there being an error brought to the notice of the court.

Now, so far as the decisions relied upon by learned counsel appearing on behalf of the appellant if considered, we are of the opinion that none of the decisions relied upon by learned counsel appearing on behalf of the appellant on the question/issue of exercise of inherent powers, referred to hereinabove, more particularly the decisions in the case of (1) State of Punjab Vs. Davinder Pal Singh Bhullar and Others etc., ; (2) K.K. Velusamy Vs. N. Palanisamy, and (3) Budhia Swain and Others Vs. Gopinath Deb and Others, would be applicable to the facts of the case on hand. As observed hereinabove in the present case the learned company court has recalled its earlier order dated December 17, 2013, in exercise of inherent powers on the ground that certain relevant factors which had a direct bearing on the determination of the market price were not considered by him and therefore, it has resulted into irregularity in accepting the offer of the appellant of Rs. 148 crores, which was inadequate. Considering the aforesaid facts and circumstances, as such it cannot be said that the learned company court has committed any error in exercising the inherent jurisdiction and in recalling its earlier order dated December 17, 2013 and directing to re-auction the land in question by fixing the upset price of Rs. 214 crores.

Number of submissions have been made by learned counsel appearing for respective parties on the issue whether the confirmed sale can be de-confirmed or not on the basis of the subsequent higher offer. It is also contended on behalf of the appellant that the learned company court has relied upon the subsequent development of increase in FSI which has resulted into increase in the market price and therefore, the subsequent development could not have been considered by the learned company court. However, it is required to be noted that the learned company court has specifically observed and held that certain relevant factors such as potential development of the land in question as on the day on which the bid of the appellant was accepted and it had a direct bearing on the determination of the market price was not considered by him. Therefore, as such the learned company court has considered the position as on December 17, 2013 and has observed that by not considering the aforesaid factors it has resulted into irregularity and injury. The observation made by the learned company court with respect to subsequent increase in FSI resulting into a large further area available for the purpose of construction and consequent increase in the market price is only in support of the conclusion arrived at by the learned company court that the bid/price offered by the appellant which was accepted vide order dated December 17, 2013 of Rs. 148 crores was inadequate. Therefore, as such it cannot be said that the learned company court has considered the subsequent rise/increase in the market price considering the subsequent development. If the tenor of the entire judgment and order passed by the learned company court is considered, it appears that the learned company court has specifically observed and held that a relevant factor which had a direct bearing on determination of the market price such as potential development, etc., and the increase/change in the FSI which was in offing was not considered by him as on December 17, 2013 and therefore, the price offered by the appellant and confirmed by this court of Rs. 148 crores was inadequate which has resulted into irregularity and it has caused substantial injury.

As observed hereinabove, number of submissions have been made by learned counsel appearing on behalf of the respective parties whether by order dated December 17, 2013, the sale was confirmed in favour of the appellant or not and/or whether there was a concluded contract on deposit of Rs. 148 crores by the appellant and/or whether the confirmed sale/contract can be de-confirmed or not subsequently on the higher price offered by respondent No. 1 herein--original applicant who had earlier participated in the auction. However, it is required to be noted that in the present case the learned company court has in exercise of inherent powers under rule 9 accepting and/or taking upon itself that certain relevant factors like potential development and the change in the FSI which had a direct bearing on the determination of the market price was not considered by him on December 17, 2013, when the offer of the appellant of Rs. 148 crores was considered. Under the circumstances, the aforesaid aspect is not required to be considered and/or gone into detail.

Even otherwise while considering the impugned order it appears that learned single judge has considered in detail the decisions of the hon''ble Supreme Court on the point more particularly in the case of Shradhha Aromatics Private Limited Vs. O.L. of Global Arya Industries Limited and Others, , LICA (P.) Ltd. (No. 1) Vs. Official Liquidator and Another, ; LICA (P.) Ltd. (No. 2) Vs. Official Liquidator and Another, : Divya Manufacturing Company (P) Ltd. Vs. Union Bank of India and Others, and Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others, . The learned company court has also considered the decisions which were relied upon by and which are relied upon by learned counsel appearing on behalf of the appellant. Considering the aforesaid decisions and even the decisions which are relied upon by learned counsel on behalf of the appellant referred to hereinabove on the point whether a confirmed contract/sale can be de-confirmed subsequently or not, we are in complete agreement with the view taken by the learned company court that in the facts and circumstances of the case, there is a case made out to recall the earlier order of confirming the bid/offer of the appellant of Rs. 148 crores. As observed hereinabove, there is a substantial difference between the price offered by the appellant which was confirmed by the learned company court vide order dated December 17, 2013 and even the price offered by respondent No. 1 now, i.e., approximately more than Rs. 66 crores. It is required to be noted that as such the aforesaid difference of Rs. 66 crores would be considering Rs. 214 crores as upset price now fixed by the learned company court and if there is a reauction as ordered by the learned company court then in that case considering the fact that the land in question is situated in prime location of the city of Ahmedabad, it is likely to fetch much more price than even Rs. 214 crores.

Now, so far as the contention on behalf of Shri Joshi, learned counsel appearing on behalf of the appellant that at the time when the appellant as well as respondent No. 1 and other participated in the auction, nobody was aware that there is likelihood of increase in the FSI and therefore, a conscious commercial decision was taken by the parties and the appellant made higher offer of Rs. 148 crores and respondent No. 1 who also participated in public auction did not raise its offer of Rs. 148 crores. 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 learned company 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 hereinabove and even at the cost of repetition it is to be noted that the learned company court has recalled its earlier order dated December 17, 2013, accepting the higher offer 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. At this stage it is required to be noted that the increase in the market price from Rs. 148 crores accepted by the learned company court on December 17, 2013, has been increased substantially at least to Rs. 214 crores within a span of only four months. The aforesaid would confirm the finding recorded by the learned company court that the market price offered by the appellant of Rs. 148 crores and accepted by the learned company court on December 17, 2013, was inadequate. As observed by the hon''ble Supreme Court in catena of decisions that in proceedings for winding up of a company in liquidation, the company court acts as a custodian of the interest of the company and the creditors, etc. Therefore, before sanctioning the sale of its assets, the court is required to exercise its judicial discretion to see that the properties are sold at a reasonable price. It is also observed and held by the hon''ble Supreme Court in catena of decisions that the company court has to see that the best price for the property is fetched. Under the circumstances and in the facts and circumstances of the case, narrated hereinabove, more particularly when the learned company court has recalled its earlier order of accepting the offer of the appellant of Rs. 148 crores, in exercise of inherent powers and has passed an order of re-auction by fixing the upset price at Rs. 214 crores, we see no reason to interfere with the same. We are of the opinion that the learned company judge has exercised the discretion judiciously and in the larger interest and has corrected the mistake committed by it of not considering the relevant factors while passing the order dated December 17, 2013.

If despite the above, the impugned order passed by the learned company court of correcting its mistake/error and recalling its earlier order dated December 17, 2013, accepting the offer of the appellant of Rs. 148 crores is interfered with, in that case the benefit of the same would straightway go to the appellant. Because of the error/mistake of non-consideration of certain factors which had a direct bearing on true determination of market price, the land in question of the company in liquidation would be sold to the appellant at a much lower price, i.e., at Rs. 148 crores. It cannot be disputed that nobody can be permitted to take advantage/disadvantage of any error and/or mistake committed by the court. On the other hand, if the land in question is put to re-auction in that case the real market price will be considered and even the appellant would be compensated by return of the amount which he has deposited with reasonable interest. Under the circumstances, we are of the firm opinion that the impugned judgment and order passed by the learned company court of recalling its earlier order dated December 17, 2013, is not required to be interfered with by this court in exercise of appellate jurisdiction.

At one stage it was argued by learned counsel appearing on behalf of the appellant that as such the workers, labourers, secured creditors, all were satisfied with Rs. 148 crores for the land in question and even after making the payment to all concerned, i.e., labourers, secured creditors and unsecured creditors, there will be surplus is concerned, it is required to be noted that under the Companies Act, the beneficiary would not be only the workers, secured creditors and even unsecured creditors but even whatever will be the surplus, would be paid to the shareholders. Therefore, whatever the maximum amount is received, the same will have to be distributed amongst the shareholders.

At this stage it is required to be noted that in the present case the learned company court has exercised its inherent jurisdiction conferred under rule 9 of the Companies (Court) Rules and has recalled its earlier order and the learned company court has not exercised the powers of review jurisdiction. The aforesaid aspect is already discussed hereinabove. Under the circumstances, O.J. Appeal No. 36 of 2014 deserves to be dismissed.

Now, so far as O.J. Appeal No. 66 of 2014 preferred by the Narmada Fintrade P. Ltd., shareholders who are having approximately 92 per cent shareholding is concerned, considering the impugned order passed by the learned company court in O.J. Civil Application No. 283 of 2014, it appears that the learned company court has not decided anything on merits whether the appellant herein can be said to be a necessary and/or proper party or not. The said application preferred by the applicant, i.e., O.J. Civil Application No. 283 of 2014 has been dismissed by the learned company court solely on the ground that the application submitted by the applicant earlier for joining party in Company Application No. 475 of 2011 in O.L. Report No. 36 of 2011 by which the applicant prayed to join it as a party in the said proceedings was rejected. However, on considering the order passed by the learned company court dated March 26, 2013, in Company Application No. 475 of 2011 more particularly paragraph 18 of the said order, it appears that the said application was not rejected by the learned company court on merits by observing that the applicant cannot be said to be a necessary and/or proper party. The said application being Company Application No. 475 of 2011 was rejected by the learned company court by observing in paragraph 18 as under:

"18. Company Application No. 475 of 2011 and Company Application No. 75 of 2012 are filed by the applicant seeking to join as party in O.L.R. No. 36 of 2011. Now since the court is not inclined to review or reconsider the proposed scheme of the applicant of Company Application No. 331 of 2012 and since proceedings of the company petition are at the stage of ordering for public auction of freehold land of the company, the applications for joining party cannot be entertained and are required to be rejected."

Therefore, as such there was no decision by the learned company court in the said application on merits whether the applicant can be said to be a necessary and/or proper party or not. As observed hereinabove, while dismissing O.J. Civil Application No. 283 of 2014, the learned company court has not enter into the merits of the case and/or expressed anything on merits whether the appellant can be said to be a necessary and/or proper party not. Even learned counsel appearing on behalf of the Vedica, i.e., respondent No. 10 herein is not in a position to dispute the above. Even considering the impugned order passed by the learned company court in O.J. Civil Application No. 283 of 2014, dated August 11, 2014, it appears that except observing that the earlier application of the appellant was rejected, the learned company court has not decided on merits whether the appellant can be said to be a necessary and/or proper party or not. As observed hereinabove while rejecting O.J. Civil Application No. 283 of 2014, the learned company court had never observed anything and/or held that the appellant cannot be said to be a necessary and/or proper party. Under the circumstances, when the learned company court has not decided anything on merits as to whether the appellant can be said to be a necessary and/or proper party or not, the impugned order passed by the learned company court deserves to be quashed and set aside and the matter is required to be remanded to the learned company court to decide the said application afresh in accordance with law and on merits. It is made clear that we have not expressed anything on merits whether the appellant herein, i.e., the appellant of O.J. Appeal No. 66 of 2014 can be said to be a necessary and/or proper party or not. We have simply remanded the matter to the learned company court to decide the said application afresh in accordance with law and on merits as, as observed hereinabove, the learned company court has not decided anything on merits whether the appellant can be said to be a necessary and/or proper party or not. Consequently, O.J. Appeal No. 66 of 2014 deserves to be allowed and is, accordingly, allowed to the aforesaid extent.

In view of the above and for the reasons stated above, O.J. Appeal No. 36 of 2014 filed by Vedica Procon P. Ltd., is hereby dismissed and the impugned judgment and order dated August 11, 2014, passed by the learned company court passed in Miscellaneous Civil Application No. 89/2014 in O.L.R. No. 43 of 2013 by which the learned company court has recalled its earlier order dated October 17, 2013, passed in O.L.R. No. 43 of 2013 and issued the directions for fresh auction of the land in question of the company in liquidation fixing the upset price at Rs. 214 crores is hereby confirmed.

For the reasons stated above, O.J. Appeal No. 66 of 2014 preferred by the Narmada Fintrade P. Ltd., is hereby allowed and the matter is remanded to the learned company court to decide O.J. Civil Application No. 283 of 2014 afresh in accordance with law and on merits as observed hereinabove.

In view of disposal of main appeals, O.J. Civil Application No. 525 of 2014 in O.J. Appeal No. 36 of 2014 stands dismissed. In the facts and circumstances of the case, there shall be no order as to costs.

At this stage a request is made on behalf of the appellant to continue the stay/interim order granted by the learned company court while passing the impugned order which has been continued during the pendency of the appeal, so as to enable the appellant to approach the higher forum. The prayer is opposed by Shri Kamal Trivedi, learned counsel appearing on behalf of respondent No. 1. However, in the facts and circumstances of the case and considering the fact that by order dated September 17, 2014, passed in O.J. Civil Application No. 525 of 2014 the Division Bench has continued the stay granted by the learned company court vide order dated August 28, 2014, till the final disposal of the appeal, the stay granted by the learned company court vide order dated August 28, 2014, which has been continued by the Division Bench vide order dated September 17, 2014, passed in O.J. Civil Application No. 525 of 2014 is hereby directed to be continued till January 6, 2015.

1Here printed in italics.