Partly allowed

P.Venkata Krishna Rao v. M/s.Vijetha Horticulture (I) Ltd.

Telangana HC26 Dec 2011COMPA/1588/2011

Case brief

AI extract

What is this about?

The court accepted an application to purchase company land and assets. The applicant offered Rs.1,51,00,000, exceeding the upset price. The court directed the applicant to increase the offer to Rs.1,75,00,000 and pay the balance within two months to facilitate the sale.

What did the court decide?

Application accepted subject to increasing the offer to Rs. 1,75,00,000/- and paying the balance amount within two months.

P.Venkata Krishna Rao Vs M/s.Vijetha Horticulture… — Execution and Attachment | Telangana HC (2011)

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THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDYw3

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Company Application No.1588 of 2011

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in Company Petition No.96 of 2006

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Date:2 6 th December, 2011

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Between:

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P.Venkata Krishna Rao S/o.P.Suryanarayana & Ors.

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…Applicants

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A n d

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M/s.Sri Vijetha Horticulture (India) Ltd. (In liquidation), rep. by the Official Liquidator, High Court of A.P., Hyderabad, Hyderabad & Anr.

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….Respondents

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THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY

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Company Application No.1588 of 2011 in Company Petition No.96 of 2006

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ORDER:

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This Company Application has been taken out by the applicants under Rules 272 and 9 of the Companies (Court) Rules, 1959, to accept their offer of Rs.1,51,00,000/- in respect of land admeasuring Ac.75.31 cents situated in Survey Nos.95, 96/2, 96/3, 99, 100, 101/2, 102, 113 of Sankaram Village, Madugula Mandal, Visakhapatnam District, owned by M/s.Sri Vijetha Horticulture (India) Limited (in liquidation).

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2. By an order, dated 04.12.2006, passed in Company Petition No.96 of 2006, this Court directed winding up of M/s.Sri Vijetha Horticulture (India) Limited (in liquidation). By virtue of powers under Section 449 of the Companies Act, 1956, the Official Liquidator became its liquidator and he has taken possession of various assets of the company (in liquidation). An attempt has been made to put on sale the various assets of the company (in liquidation). In spite of the notice of publication of sale in leading newspapers on 12.12.2006 and 13.12.2006, there was no response for purchase of lands in Lot Nos.1 to 4. Whereas, only one single offer has been received for purchase of printing machine, furniture and fixtures etc. The offer for that was not considered as responsive by this Court. A second attempt has been made to dispose of the assets without specifying the upset price. Then an offer has come for purchase of the printing press, machinery, furniture and fixtures, for a sum of Rs.5,00,000/- and the same was confirmed in favour of Sri M.Jagannadha Rao. Insofar as landed properties are concerned, viable offers have not come. The Official Liquidator moved an application being Company Application No.218 of 2009 seeking permission to sell the company’s assets, which are in the form of lands to an extent of Ac.75.31 cents situated in various survey numbers of Shankaram Village, Madugula Mandal, Visakhapatnam District, as Lot No.1 by fixing the upset price at Rs.1,50,75,000/- and similarly, to sell the land to an extent of Ac.20.07 cents situated in various survey numbers of L.Ponnavolu Village,

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Visakhapatnam District, as Lot No.2 by fixing the upset price at Rs.60,25,000/- and for the allied reliefs.

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3. This Court, by order, dated 31.03.2009, passed in Company Application No.218 of 2009, permitted the Official Liquidator to sell the lands admeasuring Ac.75.31 cents situated at Shankaram Village, fixing the upset price at Rs.1,50,00,000/- and the lands admeasuring Ac.20.07 cents situated at L.Ponnavolu Village, fixing the upset price at Rs.60,00,000/-. The relevant portion of the order, dated 31.03.2009, passed in Company Application No.218 of 2009, is to be noted and it is thus:

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“Since the lands are fairly valuable and also well-maintained by the company under liquidation, and since valuable plantation such as teak, casurina and cashew are standing thereon, I consider it appropriate to confirm the upset price as Rs.1.5 crores for Acs.75.31 cents of land situate at Shankaram Village and Rs.60 lacs for Ac.20.07 cents of land situate at L.Ponnavolu Village, while approving the terms and conditions, which are enclosed, subject to which the properties may be auctioned by inviting bids. However, I consider it appropriate to direct the Official Liquidator to incorporate in the sale notification an additional term leaving the choice for the bidders, who propose to buy the entire extent or any lesser extent for proportionate value. Hence, the Official Liquidator may indicate the minimum upset price as Rs.2 lacs per acre for the lands situate at Shankaram Village and Rs.3. lacs per acre for the lands situate at L.Ponnavolu Village.

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The Official Liquidator is permitted to sell the tender forms by collecting a sum of Rs.1,000/- from the prospective purchasers. The Official Liquidator is permitted to open the sealed tenders and also conduct an inter se bidding/negotiations with the bidders. The Official Liquidator is permitted to publish the sale notification in “Eenadu” and “Sakshi” Telugu daily newspapers, having circulation in Visakhapatnam District. He is permitted to incur the necessary expenditure towards advertisement charges from out of the funds available with the company. The Official Liquidator is also permitted to advertise for two consecutive days on the electronic media of Tv5 and Tv9. The Official Liquidator is also permitted to put up vinyl boards at prominent places, so as to attract the attention of the prospective purchasers. Let there be a clear gap of 15 days from the date of publication for receipt of the sealed bids.”

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The Official Liquidator made two attempts for sale of the lands. But no offers were received. This Court, by order, dated 30.08.2010, directed the Official Liquidator to advice the ex-Chairman and Managing Director of the Company (in liquidation) to bring the parties for purchase of assets. In pursuance of the said order, the Official

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Liquidator addressed a letter, dated 07.09.2010 to the Ex-Chairman and Managing Director of the Company (in liquidation). In response to the above, D.Satyanarayana, Ex-Chairman and Managing Director of the Company (in liquidation), informed the Official Liquidator under letter, dated 15.11.2010, that he had approached various parties, but they expressed that the price fixed by this Court is on high side. The Official Liquidator, on 01.11.2010 addressed letters to various parties informing the status of the properties of the company (in liquidation). The applicants herein offered Rs.1,51,00,000/- for the total extent of Ac.75.31 cents together with cashew nut trees, teak trees, mango trees, eucalyptus trees, etc. situated in Survey Nos.95, 96/2, 96/3, 99, 100, 101/2, 102, 113 of Sankaravam Village, Madugula Mandal, Visakhapatnam District and sought three months time to pay the balance amount. They enclosed a demand draft for Rs.15,00,000/along with their offer.

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4. The Official Liquidator placed on record his report, dated 18.10.2011. The Official Liquidator detailed the steps taken by him to get the property auctioned and that his efforts did not yield any fruitful result. Para.7 of the report needs to be noted and it is thus:

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“Thus, it is respectfully submitted the offer of Rs.1,51,00,000/- (Rupees One Crore Fifty One Lakhs only) offered by Sri P.Venkata Krishna Rao & Others, the applicants to purchase land an extent of Ac.75.31 cents together with cashew nut trees, teak trees, mango trees, eucalyptus trees, etc., situated in Sy.Nos.95, 96/2, 96/3, 99, 100, 101/2, 102 and 113 of Sankaram Village, Madugula Mandal, Visakhapatnam District, is more than the Minimum Upset Price of Rs.1,50,75,000/- as fixed by this Hon’ble High Court and also an higher offer than the earlier offers so received by the Official Liquidator until this date. However, this Hon’ble Court may be pleased to direct the applicants herein to enhance their offer for the interest of creditors and contributors of the company (in liquidation) or such other directions as may deem and appropriate be passed in this regard.”

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5. On 25.11.2011, this Court directed the Official Liquidator to notify the offer made by the applicants, by way of publication in “Andhra Jyothi” (Telugu daily Newspaper) and “The Indian Express” (English daily newspaper) of Visakhapatnam Editions. Accordingly, the Official

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Liquidator took out publication and filed copies of publication as proof. No objections have been received from any quarter.

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6. The 2^nd respondent, who is the Ex-Chairman and Managing Director of Company (in liquidation) filed counter affidavit reporting no objection to accept the offer given by the applicants herein.

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7. Heard learned counsel appearing for the applicants and learned counsel appearing for the official liquidator representing the 1^st respondent Company (in liquidation) and the 2^nd respondent, party in person.

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8. Learned counsel appearing for the Official Liquidator submits that the property has been put to auction more than twice. On both the occasions, no offers have been received matching with the upset price. It is only the applicants herein, who have come up with this application matching with the upset price fixed by this Court in Company Application No.218 of 2009.

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9. Despite notifying the offer made by the applicants in two leading newspapers, viz., “Andhra Jyothi” (Telugu Daily newspaper) and “The Indian Express” (English daily newspaper), none appeared opposing the offer made by the applicants. It appears there are cashew nut trees, teak trees, mango trees, eucalyptus trees etc. in the land admeasuring Ac.75.31 cents situated in Survey Nos.95, 96/2, 96/3, 99, 100, 101/2, 102 and 113 of Sankavaram Village, Madugula Mandal, Visakhapatnam District.

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10. Having considered the facts and circumstances, I am of the view that the instant application can be considered subject to the applicants raising their offer from Rs.1,51,00,000/- to Rs.1,75,00,000/-.

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11. Accordingly, the Company Application is ordered accepting the offer of the applicants provided that they increase the same to

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Rs.1,75,00,000/-. The applicants have paid Rs.15,00,000/- and the they shall pay the balance amount of Rs.1,60,00,000/- within two months. No costs.

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_____________________ B.SESHASAYANA REDDY, J

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Date: 26^th December, 2011.

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cs THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY

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Company Application No.1588 of 2011 in

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Company Petition No.96 of 2006

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Date:2 6 th December, 2011

P.Venkata Krishna Rao v. M/s.Vijetha Horticulture (I) Ltd.

Case brief

What is this about?

What did the court decide?

P.Venkata Krishna Rao v. M/s.Vijetha Horticulture (I) Ltd.

Case brief

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What did the court decide?

What the court decided

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