Judgment:
ORDER
SHEET APO No.533 of 2004 C.P.No.510 of 1988 IN THE HIGH COURT AT CALCUTTA Civil Appellate Jurisdiction ORIGINAL SIDE ANIL AGARWAL Versus THE OFFICIAL LIQUIDATOR BEFORE: The Hon'ble JUSTICE GIRISH CHANDRA GUPTA The Hon'ble JUSTICE TAPASH MOOKHERJEE Date : 11th February , 2014.
Mr.Jishnu Saha,Advocate, Mr.S.Banerjee, Advocate Mr.R.Upadhayay, Advocate, Ms.Ananya Das, Advocate Mr.Soumabho Ghose, Advocate for the Appellant Mr.M.C.Ghosh, Advocate with Ms.Mithua Sen, Advocate for the Official Liquidator.
Mr.P.K.Roy, Advocate with Md.Siddique, Advocate for Customs Authorities The Court : The appeal is directed against a judgment and order dated 23rd February, 2004 by which the Company Application No.402 of 2003 made by the purchaser was dismissed.
The Company Application No.402 of 2003 was made in or about August, 2003 praying for the following reliefs: “a) An order be made directing the Official Liquidator to refund to the applicant the sum of Rs.17,98,440/- together with interest @ 24% per annum compounded quarterly calculated on an from 20.6.1995 to till the date of refund.” The sole ground for the aforesaid prayer, pointed out to us by Mr.Saha, learned Advocate appearing for the appellant, is to be found in paragraph-14 of the affidavit affirmed on 20th August, 2003 by Sr.Anil Agarwal.
The said paragraph-14 reads as follows : “14.
I say that in view of the direction contained in the said judgment and order dated 5th November, 1998 granting the customs authorities leave to recover the import duty claimed by them on the said goods by sale of the balance goods lying in their custody, there can be no other impediment to the refund of the sum of Rs.17,98,440/- to the applicant together with interest thereon.
There can in any event be no question of withholding the refund of the said balance sum to the applicant in view of the failure on the part of the Official Liquidator to deliver any goods to the applicant apart from the said 825 barrels of CDP of the applicant which have been valued at Rs.17,01,560/-.
In this context, it is significant to note that no challenge to such valuation has been made either by the Official Liquidator or by any one else.” The facts and circumstances of the case, briefly stated, are as follows: The appellant made an offer for purchasing chemicals put up for sale by the Official Liquidator in connection with the winding up proceeding arising out of Company Petition No.510 of 1988.
The offer of the appellant was accepted by an order dated 6th April, 1995 at a sum of Rs.64.25 lakhs on the terms and conditions of sale which, inter alia, were as follows: “ Sealed cover will be opened and considered by the Hon'ble Judge, High Court, Calcutta taking company matters on 24.2.95 at 2 p.m.when the offerers may be present.
After opening the sealed tendeRs.the tenderers and if their enhanced tenders are accepted, then they will deposit a further sum which along with the 20% deposited earlier would amount to 20% of the enhanced bid accepted.
Any person other than the tenderers shall also be entitled to be present and make their bid offering any amount higher than the highest bid submitted.
In such case, such sale may be made in favour of such outsider upon his deposit of 20% of the bid made by him as the earnest money, in court by bank draft or pay order or banker cheque in favour of the Official Liquidator and subject to the terms and conditions of sale.
The court, reserves the right to accept or reject any offer without assigning any reason therefor and the decision of the High Court shall be final.
The successful purchaser will have to pay the balance purchase price to the Official Liquidator within a period of 90 days from the date of sale by the Court either by bank draft or pay order or bankers cheque, upon failure to pay such money within such fixed time the earnest money shall stand forfeited and the articles may be sold at the risk and cost of defaulting tenderers without prejudice to any other rights which the Official Liquidator may have against the same.
It is made clear that this would not prevent the court from fixing any other date for such deposit or intender such time even if such time has expired on such terms and conditions as the court may deem fit.
The goods/property sold will be held by the Official Liquidator entirely at the risk of purchaser from time and date the sale.
The Official Liquidator will not be liable for any loss deficint or deterioration of damages or injury to the property after such sale.
The successful purchaser shall have to take delivery of the goods articles sold within seven days from the date of payment of full consideration money or any other time fixed by the Hon'ble Court.
In default, unless otherwise ordered by the court, the sale in their favour shall stand cancelled and all sums paid on account of the sale shall stand forfeited without any reference to the purchaseRs.No claim in respect of the same shall be entertained thereafter.” The appellant paid a sum of Rs.12,20,000/- by way of earnest money along with his offer which initially was for a sum of Rs.61 lakhs.
The offer was raised from Rs.61 lakhs to Rs.64.25 lakhs in an open bid conducted by the Company Court on 6th April, 1995.
It is not in dispute that the appellant deposited altogether a sum of Rs.35 lakhs on or before 6th July, 1995 which was the last date for making the entire payment of a sum of Rs.64.25 lakhs.
Without making payment of the balance sum of Rs.29.25 lakhs, the appellant was not entitled to take delivery of the goods as per the terms and conditions of sale.
The appellant, however, succeeded in obtaining delivery of 826 barrels of chemicals on the basis of undertakings given by him from time to time to pay the balance sum.
By an order dated 5th July, 1995, the time for payment was peremptorily extended till 13th July, 1995 without prejudice to the rights and contentions of the Official Liquidator.
The appellant did not, however, make any further payment within the extended time or at all.
The appellant, on the contrary, made an application which was registered as Company Application No.259 of 1995 by which he prayed for an order exempting him from depositing the balance sum of Rs.29.25 lakhs and for cancellation of the sell in respect of rest of the goods.
To be precise, the prayers made by the appellant were as follows : “a) The order of sale dated 6.4.95 as modified by the order dated 23.6.95 and 5.7.95 has further modified by exempting the applicant from depositing the balance purchaser consideration of Rs.29,25,000/- within 30.7.95.
The order dated 6.4.95 as modified by order dated 23.6.95 and 5.7.95 be stayed.
b) Applicant be relieved from depositing balance consideration of Rs.2,92,000/- and the sale confirmed in favour of the applicant with regard to other materials apart from 826 barrels of phenol be cancelled.
c) Official Liquidator is directed to refund the balance amount after deducting a sum of Rs.17,01,560/- being the price of 826 barrels of phenol and assessed amount on account of cost, charges and expenses, as may be directed by this Hon'ble Court out of total sum of Rs.35 lacs deposited by the applicant.” The said application being C.A.No.259 of 1995 was finally disposed of by an order dated 5th June, 1996 which reads as follows : “ The Official Liquidator and all other interested parties and/or their representative will visit the custom warehouse in presence of the custom official and the chemicals will be inspected on as is where is basis on 20th June, 1996 at 4 p.m.by all concerned and if the description of the chemicals are found in order, the petitioner will purchase the same upon payment of the entire balance amount.
The payment will be made immediately to the Official Liquidator by pay order on the spot.
After encashing the pay order, the money will be kept in a fixed deposit account with a nationalised bank but will not be disbursed until the claim of the customs authority is finally adjudicated.
This order is passed in view of the several orders already passed by the court from time to time”.
Mr.Saha contended that the goods could not be inspected because it transpired that the Customs Authorities had shifted the goods to another godown.
They also failed to offer inspection as directed by the Court.
The appellant, thereafter, on 4th July, 1996 made an application by a Judge’s Summons, which was registered as Company Application No.401 of 1996, praying for the following reliefs: “a) The order dated 6th April, 1995 passed by this Hon’ble Court confirming the sale of the assets of Dytro (I) LTD.(in liquidation) in the form of chemicals lying at Bengal Bonded Warehouse, Metiabruz, Calcutta in favour of the applicant as modified by the orders dated 23rd June, 1995, 28th June, 1995 and 5th July, 1995 be cancelled with regard to the other materials apart from 826 barrels of phenol which the applicant has already received from the official liquidator.
c) An order be passed relieving the applicant and/or exempting the applicant from depositing consideration of Rs.23,25,000/-.
the balance purchase The orders dated 6th April, 1995 as modified by the orders dated 23rd June, 1995, 28th June, 1995 and 5th July, 1995 be stayed.
Direction be given to the Official Liquidator to refund the balance amount after deducting a sum of Rs.17,01,560/- being the price valued by the valuer for 826 barrels of phenol and the amount on account of costs, charges and expenses as may be directed by this Hon’ble Court out of the total sum of Rs.35,00,000/- deposited by the applicant.” It would appear that the prayers made in the Company Application No.401 of 1996 are substantially the same, which had earlier been made by the appellant in its Company Application No.259 of 1995, which were not allowed by the order dated 5th June, 1996.
The Customs authorities had, in the meantime, preferred an appeal against the order dated 28th April, 1996 and all subsequent orders selling the goods to the appellant and for a direction for payment of the customs duty assessed at Rs.27,05,628/- together with interest , penalty etc.The Company Application No.401 of 1996 made by the appellant was dismissed by a judgment and order dated 6th February, 1998, the operative portion whereof reads as follows : “ In my view, since there is a statutory obligation to clear the goods upon payment of the import duty and since the customs authorities have preferred an appeal on the same question, it will not be proper to pass any order at this stage since the refund of the entire amount to the petitioner may cause serious prejudice to the Customs Authorities to recover the import duty.
Moreover, the terms and conditions of the sale also do not provide for part sale of goods.
Be that as it may, all these questions are subject matter of pending appeal.
Considering all aspects of the matter I am not inclined to pass any order in this application.
It will be proper for the parties to take proper steps for disposal of the pending appeal.
With the observations as above, the application stands disposed of.
Accordingly, in my view the petitioner is not entitled to any order as prayed for and the application is accordingly rejected.
The Official Liquidator, however, will invest the amount lying with him in a suitable Fixed Deposit Account with a nationalized bank.” The appeal preferred by the Customs authorities was allowed by a judgment and order dated 5th November, 1998 directing as follows: “32.
The Official Liquidator will, accordingly, make over to the Customs Authorities the amount as claimed including the interest.
As the amount with the Official Liquidator does not cover the entire dues of the Customs Authorities, the Customs Authorities will also be entitled to realise the balance claim from any further sums that the purchaser may pay on account of the sale of the chemicals.
The creditors of the company will be entitled to the balance after the Customs Authorities’ demands on account of Duty and interest have been met.
The Customs Authorities are at liberty to appropriate the sum of Rs.35 lakh together with the interest accumulated thereon against their claims in protanto satisfaction of their dues and without prejudice to their right to claim the balance.
The Official Liquidator shall make the said payment within a period of two weeks from date.” Mr.Saha, learned Advocate appearing for the appellant, submitted that the sole ground for the application for refund of a sum of Rs.17,98,440/- together with interest at the rate of 24% from 20th June, 1995 until the date of payment was to be found in paragraph 14 of the application which we already have quoted above for convenience.
It would appear that contention of the appellant that by the order dated 5th November, 1998, the Customs Authorities were granted liberty by the Appellate Court to sell the goods, which had earlier been sold to the appellant was never issued.
On the contrary, the Appellate Court proceeded on the basis that the Official Liquidator was likely to recover balance money from the appellant before us.
The Appellate Court by its order dated 5th November, 1998 did not grant any opportunity to the Customs Authorities to sell the goods which had earlier been sold by the Company Court to the appellant.
Therefore, the entire premise for an order, as prayed for, is misconceived.
On the top of that, the prayer for refund was earlier rejected twice in Company Application No.259 of 1995 and Company Application No.401 of 1996.
Therefore, the issue is clearly res judicata.
Further reasons, why such a prayer cannot be allowed, may briefly be indicated as follows: (a) The terms and conditions of sale were binding on the appellant.
The last date of payment was 6th July, 1995.
The court had extended the time for payment peremptorily by a week.
Therefore, the time to make payment expired on 13th July, 1995.
The appellant did not make any payment.
Going by the terms and conditions, the entire earnest money stood forfeited.
(b) Without making the full payment, the appellant was not entitled to take delivery of any part of the goods.
On the basis of undertakings given by the appellant recorded in the orders dated 5th July, 1995 (page
78) and 23rd May, 1995 (page 59).the appellant succeeded in obtaining delivery of 726 barrels of chemical.
The appellant never Therefore, the carried appellant out his undertakings.
was liable to restore possession of the goods taken by him.
The goods in that case could have been put up for sale at the cost and risk of the appellant as per the terms of sale noticed above.
The appellant has admittedly appropriated the goods which he had no right to take delivery of.
By doing so, the appellant has disabled the Official Liquidator from taking steps in accordance with the terms and conditions of sale.
(c) By the order dated 5th November, 1998, the Appellate Court directed the Official Liquidator to pay the money received from the appellant to the Customs Authorities which it had received from the appellant on account of the goods.
Therefore, the Official Liquidator is no longer in possession of any funds received from the appellant which can be directed to be refunded to the appellant.
The appellant was a party to that appeal.
The order directing the Official Liquidator to pay the sum of Rs.35 lakhs to t he Customs authority was not challenged by the appellant.
The order has not only become final but has also been acted upon.
(d) The appellant purchased the goods in the year 1995 knowing that they were chemicals liable to have an expiry date.
transaction, By he his omission allowed the to expiry complete date of the the chemicals to be over.
As a result the entire goods lost their efficacy.
Due to the laches on the part of the appellant, the goods could not be sold.
The resultant effect is that both the Customs Authorities and the creditors of the company, in winding up, were seriously prejudiced.
(e) Even assuming that by the order dated 5th June, 1996, the appellant was granted an opportunity to take delivery of the goods provided they had not lost their efficacy, there is nothing to show that any attempt or serious attempt was made by the appellant to take delivery of the goods.
Mr.Saha submitted that it was found that the customs authorities had already shifted the goods to another godown and therefore the inspection could not be carried out.
The appellant in that case should have insisted upon an inspection of the goods by executing the order dated 5th June, 1996 which the appellant never did.
He on the contrary on 4th July, 1996 made the Company Application No.401 of 1996 seeking refund of the money which was dismissed by an order dated 6th February, 1998.
The Company Application No.402 of 2003 was a third futile attempt after 5 years made by the appellant on an erroneous premise seeking refund of the money.
(f) Mr.Saha contended that the goods had lost their efficacy.
There is no evidence in that regard.
Even assuming that he is correct, the Official Liquidator is not at fault.
As per the terms of sale, the Official Liquidator held the goods at the cost and risk of the purchaser/appellant after the sale was made in favour of the appellant on 6th April, 1995.
(g) The alleged valuation of the goods received by the appellant on the basis of his undertakings, which he never discharged, was not proved by the appellant at any stage by any dependable evidence.
For the aforesaid reasons, we are of the opinion that the order of dismissal of the application passed by the learned Trial Court cannot be interfered with.
The appeal is, therefore, dismissed with costs assessed at 60 GMs payable to each of the contending parties.
(GIRISH CHANDRA GUPTA, J.) (TAPASH MOOKHERJEE, J.) kM/S.AR(CR)