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Judgment
Jayant Patel, J.—The present appeal arises against the order dated 26.4.2010 passed by the learned Company Judge in OLR No. 29 of 2010, whereby the learned Company Judge has directed the Appellant herein to pay an amount of Rs. 10,60,000/- for the damage/loss caused to the properties of the company.
We have heard Mr. Navin Pahwa, learned Counsel for the Appellant and Mr. Mrugesh Jani, learned Counsel for the Official Liquidator.
The relevant facts are that the properties of the company, M/s. Kwality Roller and Ball Bearing Pvt. Ltd., were in the possession of the OL, since the said company was ordered to be wound up. In order to realize money by sale of the properties, the OL had got the valuation made of the properties through approved valuer. As per the valuation report the properties of the company were divided into three parts; one was for the land, another was for the shed and the third was for other movable properties. As such, for the plant and machinery, the valuation was assessed by the valuer at Rs. 50,000/-, the valuation of the land was assessed at Rs. 10,21,944/- and the valuation of the super-structure thereon was assessed at Rs. 10,51,795/- However, as far as the depreciated value of the super-structure is concerned, the valuer had deducted the amount of Rs. 4,20,718/- and consequently, the depreciated value of the building and super-structure was assessed at Rs. 6,31,070/-. Accordingly the valuer had assessed the market value of the land and super-structure at Rs. 16.50 lac. The jantri value of the premises was assessed at Rs. 13.20 lac and the distress sale value of the premises was assessed at Rs. 10.60 lac. The OL, based on the said valuation report, had submitted the OLR No. 22 of 2003 and the attempts were made to invite offers. The advertisement was issued in DNA Newspaper on 21.2.2009. For the purpose of inviting offers, the properties of the company in liquidation were divided into three parts; first one, Lot No. I, comprises of the land admeasuring 464.52 sq. mtrs., and the upset price was fixed at Rs. 13.20 lac; the second one, Lot No. II, comprises of assets other than land and records and the upset price was fixed at Rs. 50,000/-, and the third one, Lot No. III, comprised of composite lot of Lot Nos. I and II and the upset price was fixed at Rs. 14 lac.. It appears that thereafter, the report was submitted to the learned Company Judge by the OL being OLR No. 140 of 2009 and vide order dated 6.11.2009, the offer for Lot No. II was accepted at Rs. 55,000/-, whereas for Lot No. I, no orders were passed.
Pursuant to the said order, the Appellant herein deposited the amount and the possession was given to him. The Appellant had to remove the movables, but it appears that since in the advertisement at the time when the offers were invited, it was mentioned as of assets other than land and records forming part of Lot No. II, the Appellant removed super-structure over the land. The OL thereafter submitted the report to the learned Company Judge being OLR No. 29 of 2010 seeking directions against the Appellant to pay the amount of Rs. 10,21,942/- being the loss caused to the properties of the company in liquidation by unauthorised dismantling and removal of the building structure. The learned Company Judge examined the matter and found that only movables were sold i.e. plant and machinery and the land and building were not sold to the Appellant and, therefore, ultimately directed the Appellant to pay an amount of Rs. 10,60,000/- towards the loss caused to the properties of the company by the impugned order. Under these circumstances, the present appeal before us.
We have heard Mr. Pahwa, learned Counsel for the Appellant and Mr. Jani, learned Counsel for the OL.
If the matter is strictly considered on the basis of advertisement issued for inviting offer, it was provided as under:
Lot No. Particulars Upset Price (Rs. ) EMD (Rs. )
I Land admeasuring 464.52 sq. mtrs. Situated at Plot No.K-2/4, Street No.15/11, Survey No.246/2(p), charge-sheet No.4807, Gondal, Dist. Rajkot 13.20 lakh 1.32 lakh
II All assets other than Land and records 50,000/- 5000/-
III Composite Officer (i.e. Lot I & II as above except records) 14.00 lakh 1.40 lakh
It is undisputed position that the offer of the Appellant was for Lot No. II and his offer was accepted at Rs. 55,000/-. In the aforesaid advertisement, it was mentioned as "all assets other than land and records". Therefore, one at the first brush will get the impression that except land and records all assets are included. However, the order of this Court for confirmation of the offer and more particularly the conditions stated therein vide Paragraph 4 Clause (i) reads as under:
4 (i) It will be open to the purchaser to place his own security outside the premises of the said unit upon possession being handed over by the liquidator for the purpose of removal of all the movable assets, but upon completion of the removal of the said items, the purchaser shall be liable to hand over vacant and peaceful possession of the land to the Official Liquidator;
The another aspect that at paragraph 5 in the said order, the Court observed thus:
In the result, the sale of all the movable assets, other than land and records of the company in liquidation, is hereby confirmed for a sum of Rs. 55,000/- (Rupees fifty five thousand only), in favour of Shri Savjibhai H. Parmar, on the terms and conditions specified hereinbefore.
The aforesaid shows that what was intended to be sold was the movable assets and not in immovable assets.
Mr. Pahwa, learned Counsel for the Appellant, at the outset, did make an attempt to contend that when it was expressly provided that movables other than land and records of the company, it would include the super-structure, in our view cannot be countenanced for the simple reason that if the super-structure is attached to the land, it would fall in the category of immovable properties and not movables. Therefore, the said contention cannot be accepted.
Mr. Pahwa, learned Counsel for the Appellant next contended that even if the real value of the super-structure for the purpose of assessing the loss caused to the properties of the company is to be considered, it would not be Rs. 10.67 lac as ordered by the learned Company Judge, but it would be Rs. 6,31,070/-. In support of his contention, he pressed in service, the valuation report of the valuer himself, wherein he has deducted the amount of Rs. 4,20,718/- towards depreciation and, therefore, it was submitted that the said aspect has not been considered and he also declared before the Court that if this Court is inclined to order for payment of the said amount of Rs. 6,31,070/- plus some incidental charges, the Appellant would agree for payment of the said amount without raising any dispute further.
We find considerable force in the submission of the learned Counsel for the Appellant inasmuch as even if the loss or damage is to be traced, one may look at the valuation report of the valuer. The valuer''s report for the assessment of the value of the structure provides for the replacement cost of the building at Rs. 10,51,975/-. However, the valuer has deducted the depreciation of Rs. 4,20,718/- and the net figure being depreciated replacement cost of the building is assessed at Rs. 6,31,070/-. The valuer thereafter has added the said amount in the market value of the land being Rs. 10,21,944/- and consequently has arrived at the value of the premises, which would include the land and super-structure at Rs. 16,53,014/- and by rounding thereof at Rs. 16.50 lac. Therefore, even as per the valuer, the depreciated replacement cost of the building was assessed at Rs. 6,31,070/-, whereas the learned Company Judge has directed for the amount of Rs. 10,60,000/- towards the loss/damage caused to the properties of the company. The fact remains that the super-structure, which was forming part of the immovable properties has been unauthorizedly removed by the Appellant by taking undue benefits of the description of the properties in the newspaper advertisement, ignoring the language used by the Court while confirming the sale for movables. Therefore, we find that mere direction for the actual replacement cost of the building at Rs. 6,31,070/- would not be sufficient and in the facts and circumstances of the case, the Appellant should also additionally pay the amount for his alleged conduct for unauthorized removal of the super-structure.
We find that keeping in view the said aspect, it would be just and proper to direct the Appellant to pay an amount of Rs. 7,00,000/- towards loss caused to the properties of the company and the incidental aspects thereto. We may also record that at this stage Mr. Pahwa, learned Counsel appearing for the Appellant, under the instructions of his client, has declared before us that the Appellant would pay the amount of Rs. 7,00,000/- to the OL by depositing the same, but some time may be granted by this Court to pay the amount and he prayed for four months'' period to deposit the said amount with the OL by continuing the bank guarantee until the actual payment is made.
We find that the reasonable time may be granted as stated herein after.
Hence, in view of the aforesaid observations and discussions, the impugned order passed by the learned Company Judge shall stand modified to the effect that the original Respondent No. 2 - Appellant herein shall be required to pay the amount of Rs. 7,00,000/-, in place of Rs. 10,60,000/- as ordered by the learned Company Judge. The aforesaid amount shall be deposited by the Appellant with the OL within a period of three months in three instalments of Rs. 2,50,000/- plus Rs. 2,50,000/- and the remaining instlament of Rs. 2,00,000/- every month and the first instalment shall become due on or before 31.3.2011 and the remaining instalments shall become due before the end of each respective months thereafter. The bank guarantee as ordered by the interim order of this Court of Rs. 5,00,000/- shall be continued until the last instalment is fully paid.
The appeal is partly allowed to the aforesaid extent. No order as to costs.