The Supreme Court has settled the dispute over the sale of the assets of Champaran Sugar Co Ltd, which was declared sick beyond redemption by the Board of Industrial and Financial Reconstruction and sold at an auction in 2001. Initially there were two top contenders, Hanuman Industries and VK Gupta. The latter offered Rs 5 crore and his offer was accepted by the official liquidator. However, this decision was challenged by the rivals and it was stayed. The stay operated for six years. By then the value of the assets shot up. Many contenders offered much more than what was offered by Gupta. The company judge of the Allahabad high court ordered re-auction. Gupta challenged this decision as he had already bought the property in 2001. The division bench accepted his stand. IFCI and IDBI, which were involved in the revival proceedings, appealed to the Supreme Court against the high court decision. The court allowed Gupta to keep the property as he was originally the highest bidder but on condition that he paid interest on the amount already given for two years.
SC sets aside Gujarat HC order
The Supreme Court last week stated that after the auction sale of the property of a liquidated firm is confirmed, objections against the sale should not be entertained unless there were grave circumstances like fraud. In this case, the official liquidator put up the assets of Hindustan Nitro Product (Gujarat) Ltd for auction. Valji Khimji & Co offered the highest price and its bid was accepted. Two months later, Manibhadra Sales Corporation and Castwell Alloys Ltd entered the fray and offered higher prices. The company judge of the Gujarat high court, at their instance, withdrew his earlier order and ordered reauction. Valji Khimji appealed to the Supreme Court. It set aside the high court order and confirmed the sale of the assets in favour of Valji Khimji.
Circular should give way to notification: SC
The Supreme Court last week ruled that if a circular is issued by the revenue department which was in conflict with an earlier notification, it would have no effect. This principle was reiterated in the appeals of Sandur Micro Circuits Ltd and several other firms against the ruling of the Customs, Excise and Service Tax Appellate Tribunal. The tribunal had rejected the claim made by the firms for some duty benefits under the circular issued by the Central Board of Excise and Customs. The court upheld the tribunal’s view and stressed that a circular should give way to a notification under a statute.
