Welcome, Guest    
Login  Contact Us RSS Feeds
  Add Property                
Register Free to find a Perfect life partner In AnytimeMatrimony | Equated Monthly Installment(EMI) Calculator | Stamp Duty Calculator | Area Conversion Calculator | Know answer for your Taxation query | Ask Legal Advice @ Free of cost | Vaastu Tips
FAQ Sitemap
Newsletter Signup
Subscribe for our property news letter

News Search
Type a keyword to search.


Select a city to search property news.

News Archieves
September 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
September 2008
June 2008
February 2008
January 2008
December 2007
November 2007
External Links
 ICICI Home Loans
 LIC Housing
 HDFC Home Loans
 SBI Home Loans
 Axis Bank Home Loans
 Tamilnadu Govt Links
adProperty News

Can an auctioned property get a higher bid?
Source : The Hindu Property Plus Published On : 2009-03-21 City : Chennai

What happens when an auctioned property gets a higher value after the bidding is closed? Can a liquidator overlook the higher bid and settle for procedures than interest of the company whose property is auctioned?

In the case involving FCS software solutions Ltd and LaMedical Devices Ltd and others ((2008) 10 Supreme Court Cases 440), the court observed, in the event if the property had not been handed over and the transaction not closed, the liquidator could consider the higher bid in the interest of the company under liquidation and its creditors.

It was made clear that property under liquidation Appellant appears to be the first bidder (1.47 crores) and the defendant appears to be the highest bidder (3.5 crore). In the above case, property of a company situated in U.P was auctioned by the official Liquidator (OL).

The appellant was the highest bidder and finalized it for Rs. 1.47 crore. The appellant wrote a letter in 2004 followed by a reminder in 2005 requesting the Official Liquidator to expedite the process and issue a letter of acceptance. As there was no response, he made a complaint to the company judge in 2005.

Possession not given

Subsequently on payment of the amount the liquidator informed the appellant that the property would be handed over. However, possession was not given and the appellant was intimated that a higher bid at Rs. 1.55 crores had been received. The appellant filed an objection with the company judge stating that the sale was already confirmed and the full amount was paid.

Hence, the liquidator had to hand over possession of the property. In the mean time more offers were received for the same property and the highest among them was Rs. 2.10 crores. The company judge directed resale of the property by inviting tenders in 2006. The reserve price was fixed at Rs. 2.10 crores.

The appellant (FCS software solutions Ltd) challenged this order, which was dismissed by the Division Bench since the highest offer at the time was for Rs. 3.5 crores. The appellant then approached the Supreme Court. A counter affidavit was filed by the bidder who offered Rs.3.5 crores stating that the notice issued earlier was incomplete and invalid, as it did not state the fair value of the properties. In addition it was mentioned that the reserve price was not fixed. It was contended that in view of such irregularities the property could not fetch fair market price.

Auction sale

The Supreme Court while issuing orders in this case referred to an earlier judgment - MUs Union Bank of India vs. official Liquidator ((1969) 3 SCC 537) “In the auction sale of the property of the company which is ordered to be would up, the company court acts as a custodian for the interest of the company and its creditors.

It is the duty of the company court to satisfy itself as to the reasonableness of price by disclosing valuation report to secured creditors of the company and other interested persons. It was further held that the court should exercise judicial discretion to ensure that the sale of the property should fetch adequate price. For deciding what would be the reasonable price valuation report of an expert is essential the company judge himself must apply his mind to the valuation report ….The Supreme Court further said the approach of the company judge should be to get highest price to satisfy the maximum claims against the company in liquidation and the procedure followed by him cannot be said to be illegal and dismissed the petition.

It is the duty of the company court to satisfy itself as to the reasonableness of price by disclosing valuation report to secured creditors of the company and other interested persons. However, as the appellant’s bid was accepted in 2004 and he had deposited the entire money, it would be appropriate that the respondent who bid for Rs. 3.5 crores pay an amount of Rs. 30 lakh to the appellant to serve the ends of justice, the Court ruled.

The author is former National President, Institution of Valuers.



More on Anytimeproperty
City Based Properties
Useful Tools Property News Search Property Calculators Others
© 2019 Any Time Property All Rights Reserved. Home | About Us | Advertise | Testimonials | Help & Support | Contact Us | Careers | FAQ | Feedback | Sitemap
Privacy Policy | Terms and Conditions Developed by Snick Technologies