Our Legal Correspondent
Chennai, July 11
The Madras High Court ordered fresh tendering of 57.84 acres of land of Standard Motor Products of India Ltd., now in liquidation, in Perungalathur near Chennai, as it saw "possibilities of getting higher price" than the Rs 140 crore offered at the auction held by the company court on November 24, 2004.
A Division Bench, comprising Mr Justice P. Sathasivam and Mr Justice A.R. Ramalingam, while setting aside the order of the company court, directed the Official Liquidator (OL) to call for fresh tenders by inserting advertisements in leading newspapers. The OL would then place the fresh offers before the company court for further orders.
The Bench , while narrating the sequence culminating in the company court deciding the offer in favour of Mr. T.S.R. Khannaiyann of Hindustan Group of Companies, Coimbatore, said it was clear that all the tenders/bidders were not given adequate opportunity before the company court to increase their offers. Only two persons, viz. Nuziveedu Seeds Ltd, Hyderabad (the appellant now) and Mr. Khannaiyann had the opportunity of participating in the proceedings that were held in the chamber of the Registrar (Management) as well as before the company court on November 23, 2004. Had all bidders known that they could improve on their offers, they would have offered more.
The Bench added that the successful bidder (Mr Khannaiyann) had not fulfilled the conditions stipulated by the company court. The Hyderabad-based company, which offered a price of Rs 134 crore for the land, had filed an appeal challenging the company court's order. By its order dated October 4, 1996, Standard Motors was ordered to wind up and the OL initiated steps to sell the company's properties.
While disposing of the present appeal, the Division Bench permitted the OL to return the earnest money involved in the transaction after deducting Rs 2,67,400 payable to the bank towards `cheque returned charges'. The Bench also directed that on confirmation by the company court, the OL would disburse the amount, among the eligible workers, by treating their claim as a first claim. The applications made by other creditors would be passed subject to their eligibility.