Gujarat HC Approves Revised E-Auction of Mahendra Mills Assets at Reduced Price [Read Order]
The court permitted the Official Liquidator to conduct a fresh e-auction through M/s. RailTel Corporation of India Ltd. at the revised upset price of ₹160 crores, with an Earnest Money Deposit (EMD) of ₹16 crores
The Gujarat High Court has approved a revised plan for the e-auction of the assets of Mahendra Mills Ltd. at a reduced upset price, citing previous failed attempts and the practical difficulties affecting the property's realizable value. The court permitted the Official Liquidator to conduct a fresh e-auction through M/s. RailTel Corporation of India Ltd. at the revised upset price of ₹160 crores, with an Earnest Money Deposit (EMD) of ₹16 crores.
The application was filed by the Official Liquidator of M/s. Mahendra Mills Ltd. (in liquidation) seeking the court's approval for a new sale strategy after an initial auction for the company's industrial land in Kalol failed to attract any bidders despite advertisements being published.
The Official Liquidator, based on the unanimous recommendation of an Asset Sale Committee including secured creditors, proposed reducing the upset price from ₹175 crores to ₹160 crores. The Committee cited several factors justifying the reduction, including substantial government dues exceeding ₹70 crores, existing encroachments by M/s. Sanrhea Technical Textiles, mandatory Town Planning deductions, and the fact that the sale is on an 'as is where is' basis without assurance of vacant possession or clear title.
A single bench comprising Justice Mauna M. Bhatt considered the material on record and found the committee's recommendation to be fair, commercially viable, and in the interest of maximizing realization for stakeholders. The court accepted the reasoning that the practical value is lower than the theoretical government rate due to the liabilities and encumbrances attached to the property.
Accordingly, the court disposed of the report, granting the prayed-for reliefs. The court permitted the Official Liquidator to conduct a fresh e-auction through M/s. RailTel Corporation of India Ltd. at the revised upset price of ₹160 crores, with an Earnest Money Deposit (EMD) of ₹16 crores.
The court also directed that the advertisement and tender documents must include specific disclaimers regarding title, measurement, and the continued occupation of a portion of the property by M/s. Sanrhea Technical Textiles until the sale is finalized, in line with previous court orders.
It is made clear that finalization of auction is subject to final order that may be passed by the Court and if required the Court will conduct manual auction, inter-se bidding between bidders to fetch the maximum price of the property.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
