MAGMA FINCORP LIMITED vs VEERAMANI V & ORS.

In this application the petitioner has prayed for confirmation of sale of the hypothecated asset in favour of Mr. P. Senthil Kumar at a price of Rs.9.50 lakhs.

The present petitioner filed the application, AP No.104 of 2015 under section 9 of the Arbitration and Conciliation Act, 1996, against the respondents alleging that the respondents had defaulted in making payment of its outstanding dues in excess of Rs.10 lakhs.

By an order dated July 2, 2015 a learned single Judge of this Court appointed a Receiver but allowed the respondents to pay Rs.4 lakhs to the petitioner within seven days from the date of the said order failing which, the Receiver would take possession of the hypothecated asset.

Since the respondents did not make any payment to the petitioner in terms of the said order dated July 2, 2015, the Receiver took possession of the hypothecated asset.

By a further order dated July 5, 2016 another learned single Judge of this Court in the application, being GA No. 1604 of 2016 passed an order directing the sale of the hypothecated asset by the Receiver. By the said order, it was further directed that if the respondents paid Rs.5 lakhs to the petitioner within a period of eight weeks from date, the Receiver would not sale the hypothecated asset but, if the respondents default to pay the said sum of Rs.5 lakhs, the Receiver shall sell the hypothecated asset by public auction and/or private treaty subject to confirmation by this Court. It further appears that since the Receiver did not receive any offer for the sale of the hypothecated asset, by an order dated February 22, 2017 a learned single Judge of this Court directed the Receiver to continue with the possession of the hypothecated asset till an order is passed by an appropriate forum in respect thereof.

Now, the petitioner has filed this application disclosing that pursuant to an advertisement published by the Receiver in one English newspaper and one Tamil newspaper circulated in the State of Tamil Nadu, one Mr. P. Senthil Kumar has offered to purchase the said asset, on as is where is basis, at a price of Rs.9.50 lakhs. The petitioner has, therefore, prayed for confirmation of the sale of the hypothecated asset in favour of Mr. P. Senthil Kumar.

A copy of the application has been served upon the respondents. Mr. Gaureeshankar appearing for the respondents submits that the newspapers in which the Receiver had published the notice-inviting offer for sale of the hypothecated asset are not in wide circulation in the state of Tamil Nadu. He, however, submitted that the respondents shall not file any affidavit in opposition to this application. Mr. Gaureeshankar further submitted that the respondents are not in a position to bring any person to purchase the hypothecated asset at a price higher than the price quoted by the said Mr. P. Senthil Kumar.

Having considered the materials on record and the submissions made on behalf of the respective parties, I find that the respondents had no grievance against the order dated July 5, 2016 whereby a learned single Judge of this Court allowed the Receiver to sell the hypothecated asset by public auction and/or private treaty. The Receiver has taken steps for sale of the hypothecated asset, by issuing public notices in two newspapers, one in English and the other in local vernacular circulated in the state of Tamil Nadu. When the Receiver was entitled to sell the hypothecated asset even by way of private treaty and he has taken steps for sale of the hypothecated asset after publishing the notices of sale of the hypothecated asset in the two newspapers circulated in the state of Tamil Nadu, I am unable to find any merit in the contention raised on behalf of the respondents with regard to any defect in publication of the notices of the sale by the Receiver in the newspapers. Further, the respondents are not ready to take any step to produce before this court any better offer for sale of the asset in question.

For the reasons as aforesaid, subject to the said Mr. P. Senthil Kumar paying the entirety of the balance consideration of Rs.9.50 lakhs to the Receiver within February 9, 2018 by way of demand draft/banker''s cheque, the sale of the hypothecated asset mentioned in paragraph 2 of the application in favour of Mr. P. Senthil Kumar is confirmed.

It is, however, clarified that the Receiver shall make over, possession of the hypothecated asset and the sale certificate/transfer document to the aforementioned buyer only after encashment of the demand draft/banker''s cheque.

For the purpose of encashing the demand draft/banker''s cheque, the Receiver shall open a bank account with any nationalised bank in Kolkata and he shall deposit the sale proceeds of the hypothecated asset in his said bank account.

With the above directions, AP No.87 of 2018 stands disposed of.

There shall, however, be no order as to costs.