Possibility of receiving higher offers in a fresh bid is not legally justifiable ground to direct fresh holding of auction in Company Winding-up/Liquidation – Flavuro Foods Pvt. Ltd. Vs. Official Liquidator and Another – Allahabad High Court

Hon’ble High Court holds that:
(i) The purpose and the object of inviting bids at the auction is to secure the best price for the property. For such purposes auction notices are to be widely circulated so that the best offers could be received for the property to be auctioned. Auction process has a sense of sanctity attached to it and it is only for valid reasons that the highest bids can be discarded in an auction otherwise held in accordance with law.
(ii) No reasons are otherwise discernible in the order of the Company Judge for not accepting the highest bid and directing holding of fresh auction. The only reason that can be inferred is the possibility of receiving higher offers in a fresh bid. This reason has also been disapproved by the Supreme Court in Eva Agro Feeds Pvt. Ltd. (2023) ibclaw.in 98 SC.

Possibility of receiving higher offers in a fresh bid is not legally justifiable ground to direct fresh holding of auction in Company Winding-up/Liquidation – Flavuro Foods Pvt. Ltd. Vs. Official Liquidator and Another – Allahabad High Court Read Post »