1982 PLP 1749 (CLC)

Lateef Shakoor and Ghulam Mustafa for the Bidder. Offcial Assignee in person. S. Abrar Hassan for Respondent/Company. On 22‑5‑1979, winding up order was passed, and the Official Liqui dator was appointed to do all acts and things mentioned in section 179 of the Companies Act, but with the sanction of the Court. Some of the assets of the Company were disposed of by the Official Liquidator by private negotiation. Advertisement was made in seven daily news‑papers from Karachi, Lahore, Peshawar, Rawalpindi and Hyderabad m regard to sale of the spinning plant, etc. of the Company in liquidation. Such advertisement was shown to a representative of the Industrial Development Bank of Pakistan. Bids were received, but some of those were conditional, and the highest bid was out of time. By consent of all counsel, an order was passed on 23‑8‑1981 in following terms "All counsel agree that it would be proper if fresh bids are invited, and the notice to be published should clearly state that the pro perty shall be delivered free of all encumbrances." In pursuance of such order, the Official Assignee re‑advertised the sale by auction. While on the previous occasion, bids were made by six parties, at present only two bids nave been submitted, one by Gulistan Textile Mills Ltd., and the other by Fatima Enterprises Ltd. The bid by Gulistan Textile Mills Ltd. postulates some conditions, which have been summarised by the Official Liquidator in the following words :‑ "However, they have stated that their bid is subject to settlement of terms with Industrial Development Bank of Pakistan for transfer of loan to them. They have also expressed that the Industrial Development Bank of Pakistan will have to write off a part of the loan amount and that this subject will be negotiated with Industrial Development Bank of Pakistan and whatever loan amount is agreed to be transferred to them shall be reduced from the total price offered and the balance amount will be paid by them in cash. They have also claimed the transfer of Insurance policy in respect of the machinery and entitlement to receive all claim amount from the Insurance Company. Alternately they have offered to purchase the assets on cash down price of Rs. One crore only." The bid by Fatima Enterprises Ltd. carries no condition. On the other hand, the bid by Gulistan Textile Mills Ltd. clearly states that, in case such conditions are not acceded to, they were prepared for an out right purchase on cash down price of Rupees One crore only, which shall be the price in full and final settlement for machinery, land and building, which should be free from all liabilities, liens, charges and encumbrances. They have, of course, agreed to pay a total price of Rs. 3,50,00,000, if their conditions were acceded to. At the time of hearing, Gulistan Textile Mills Ltd., was not represented. On the other hand, Fatima Enterprises Ltd., offered a total price of Rs. 2,31,00,001 for purchase of all the assets, including spinning plant, machinery, leasehold rights, etc, No conditions have been stated in the letter. Mr. Abubakar I. Chundrigar, appearing for the Industrial Develop. ment Batik of Pakistan, bad made an application, bearing C.M.A. No. 614/1981, seeking permission to participate in the auction and in giving bids. By an order, dated 12‑9‑1981. the Bank was permitted to make a bid. 1t, however, did not make any bid. The question that now arises is as to the bid, which should be accep ted. Before that question is decided. I propose to dispose of a preliminary objection made by Mr. Abubakar

1. Chundrigar. He stated that all the creditors should be given notice in regard to acceptance of the bid. As it is, the auction was first set in the month of June, and fresh bids were again invited. The auctions were widely advertised. No creditor objected to the auction, nor submitted a bid. It is not easy to understand the import of Mr. Aboobakar

1. Chundrigar's objection, but it is surely easy to understand that inviting the creditors to object at this juncture, when none had objected earlier, would only lengthen in the process and further mount up the liabilities of the Company in liquidation, as the huge loans that are outstanding will result in further interest being added to it. What is more that no creditor seems to be having any genuine interest in the disposal of the assets of the Company in liquidation. Mr. Nizam Ahmed and Mr. S. Hassan Zafar, who are also appearing for some of the creditors, have not joined Mr. Aboobakar. I. Chundrigar in making this objection. I do not think any notice to the creditors is necessary. The next question is in regard to the suitability of the two bidders. Messrs Gulistan Textile Mills Ltd., have imposed conditions, which this Court cannot possibly accede to; as the fulfilment thereof would involve the consent of Industrial Development Bank of Pakistan. Suffice to say that Messrs Gulistan Textile Mills Ltd., have offer to purchase the machinery, land and building, etc. for Rupees One crore only. On the other band. Fatima Enterprises Ltd, have offered a total price of Rs. 2,31,00,001 for purchase of all the assets, including the spinning plant/machinery, leasehold rights, etc. The bid submitted by Fatima Enterprises Ltd. is far higher than that of Gulistan Textile Mills Ltd. Besides, in the bid of Gulistan Textile Mills Ltd., they have put a con dition that the Industrial Development Bank of Pakistan's loan may be transferred to them, and they seek that a part of his loan amount should also be written off. In fact, they state that such writing off a part of the loan amount will be negotiated with the Industrial Development Bank of Pakistan, and whatever loan amount is agreed to be transferable to them, shall be reduced from the total price offered. It is stated that the loan of the Industrial Development Bank of Pakistan is in the neighbourhood of Rupees ten crores, and, if the Industrial Development Bank of Pakistan does not agree to reduce the loan, then the price offered by Gulistan Textile Mills Ltd., will have to be reduced by ten crore of rupees, so that perhaps they could claim an amount either from the Industrial Develop ment Bank of Pakistan, or from any other source. The situation would be absurd. In these circumstances, I accept the bid offered by Fatima Enter prises Ltd., M. Y. H. ‑‑‑‑ Order accordingly.