PEGASUS ASSETS RECONSTRUCTION P. LTD.versusM/S. HARYANACONCAST LIMITED &ANR.

                       [2015] 15 S.C.R. 102


A       PEGASUSASSETS RECONSTRUCTION P. LTD.
                                 v.
           M/S. HARYANACONCAST LIMITED &ANR.
                  (Civil Appeal No. 3646 of 2011)
B
                      DECEMBER 29, 2015
       [VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.]
        Securitization and Reconstruction of Financial Assets
C and Enforcement of Security Interest Act, 2002 - ss. 9, 13,
  17 and 18 - Sale of secured asset by a secured creditor under
  the SARFAESI Act- Whether can be controlled by company
  court either directly or through an official liquidator - Held:
  There is no lacuna or ambiguity in the SARFAESI Act so as
D to borrow anything from Companies Act - The required
  provisions of the Companies Act have been incorporated in
  the SARFAESI Act for harmonizing this Act with the
  Companies Act - Therefore, there is no reason to take
  recourse to any provisions of the Companies Act and permit
E interference in the proceedings under the SARFAESI Act
  either by the Company Judge or the liquidator:- Companies
  Act, 1956 - Security & Interest (Enforcement) Rules, 2002.
        Auction - Auction-sale - Of secured asset -
  Confirmation of, by the court - Challenged on the ground
F that the consideration money did not reflect the correct value
  of secured assets - Held: No illegality or irregularity was
  established against the conduct of auction - Once it is found
  that the offer was fair in a competitive bid conducted fairly
  and the same was accepted and sale confirmed, it would not
G be proper for Supreme Court to undermine the value of such
  auction sale ..
         Disposing of the appeals, the Court

         HELD: 1.1 There is no lacuna or ambiguity in the
H
                                102
      PEGASUS ASSETS RECONSTRUCTION P. LTD. v.               103
             MIS. HARYANACONCAST LTD.

  SARFAESI Act to warrant reading something more into A
  it. For the purpose it has been enacted, it is a complete
  code. There is nothing lacking in the Act so as to borrow
  anything from the Companies Act till the stage the
  secured assets are ·sold by the secured creditors in
  accordance with the provisions in the SARFAESI Act and B
. the Rules. At the post sale stage, the rights of the persons ·
  or parties having any stake in the sale proceeds are also
  taken care of by sub-section (9) of Section 13 and its
  five provisos (not numbered). As per sub-section (9) a
  sort of consensus is required amongst the secured C
  creditors, if they are more than one, for the exercise of
  rights available under sub-section (4). If borrower is a
  company in liquidation, the sale proceeds have to be
  distributed in accordance with the provisions of Section D
  529A of the Companies Act even where the company is
  being wound up after coming into force of the SARFAESI
  Act, if the secured creditor of such company opts to
  stand out of the winding up proceedings, it is entitled to
  retain the sale proceeds of its secured assets after E
  depositing the workmen's dues with the liquidator in
  accordance with the provi~ions of Section 529A of the
  Companies A9t. [Para 24] [123-G-H; 124-A-D]

       1.2 Thus, it is evid~t that the required provisions F
  of the Companies Act have been incorporated in the
· SARFAESI Act for harmonizing this Act with the
  Companies Act in respect of dues of workmen and their
  protection under Section 529A of the Companies Act. In
  view of such exercise already done by the legislature, G
  there is no plausible reason as to take recourse to any
  provisions of the Companies Act and permit interference
  in the proceedings under the SARFAESI Act either by
  the Company Judge or the liquidator. [Para 24] [124-F-
 H]                                                           H
104        SUPREME COURT REPORTS                [2015] 15S.C.R.

             .
A         1.3 The Official Liquidator as a representative of the
      borrower company under winding up has to be
      associated, not for supplying any omission in the
      SARFAESI Act but because of express provisions therein
      as well as in the Rules. [Para 24] (124-H; 125-A]
B
        1.4 The clear intention of the Parliament is
  expressed in Section 13 of the SARFAESI Act that a
  secured creditor has the right to enforce its security
  interest without the intervention of the court or tribunal.
C At the same time, this Act takes care that in case of
  grievance, the borrower, which in the case of a company
  under liquidation would mean the liquidator, will have
  the right of seeking redressal under Sections 17 and 18
  of the SARFAESl.Act. [Para 25] (125-C·D]
D
        1.5 The appellant was entitled not only to stay
  outside the winding up proceeding in view of provisions
  of SARFAESI Act which is a special and later Act but was
  also entitled to exercise its rights without any fetters that
E were erroneously placed upon it by the company Judge
  and were approved also by the Division Bench. [Para
  27] (125-G-H]
           Rajasthan State Financial Corporation v. Official
 F         Liquidator2005 (3) Suppl. SCR 1073 =AIR 2006
           SC 755 = (2005) 8 SCC 190; Bank of Maharashtra
           v. Pandurang Keshav Gorwardkar 2013 (3) SCR
           269 = (2013) 7 SCC 754; Employees Provident
           Fund Commissioner v. Official Liquidator 2011
G          (15) SCR 336 = (2011) 10 sec 121 - held
           inapplicable.
           Mardia Chemicals v. Union of India 2004 (3) SCR
           982 = (2004) 4 SCC 311; Rajasthan State
           Financial Corporation v. Official Liquidator 2005
H
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.              105
         M/S. HARYANACONCASTLTD ..

    (3) Suppl. SCR 1073 =AIR 2006 SC 755 = (2005)        A
    8 SCC 190; Bakemans Industries v. New
    Cawnpore (2008) 144 Company Cases 71 (SC);
    Ram Kripa/ Singh v. State of Uttar Pradesh 2007
    (6) SCR 1187 = (2007) 11 SCC 22; and Central
    Bank of India v. State of Kera/a 2009 (3) SCR 735    B
    = (2009) 4 SCC 94; Allahabad Bank v. Canara
    Bank 2000 (2) SCR 1102 = (2000) 4 sec 406;
    International Coach Builders Ltd. v. Karnataka
    State Financial Corporation 2003 (2) SCR 631 =
    (2003) 10 SCC 482; Industrial Credit and             c
    Investment Corporation of India Ltd. v. Srinivas
    Agencies 1996 (2) SCR 960 = (1996) 4 sec 165;
    and A.P. State Financial Corporation v. Official
    Liquidator 2000 (2) Suppl. SCR 288 = (2000) 7
                                                         D
    SCC 291; Arun Kumar Agrawal vs. Union of India
    2014 (3)SCR 861 =2014(2)SCC609-referredto.

      2.1 The sale confirmed in favour of auction
purchaser for Rs.32 crores does not require any
interference particularly at the instance of Petitioner. E
There was no illegality or irregularity established against
the conduct of auction and once it is found that the offer
of Rs.32 crores was a fair offer in a competitive bid
conducted fairly and the offer has been accepted and
the sale confirmed, it would not be proper for this court F
to undermine the value of such auction sale conducted
not only by the secured creditor but also by the Official
Liquidator who was permitted to be associated with the
whole process of finding out of valuation as we.II as the G
conduct of sale. [Para 32) [128-D-F]
     Va/ji Khimji & Co. v. Official Liquidator of
     Hindustan Nitro Product (Gujarat) Ltd. 2008 (9)
     SCC 299 and Vedica Procon Private Limited v.
     Ba/leshwar Greens P. Ltd. 2015 (8) SCALE 713;       H
106         SUPREME COURT REPORTS                [2015] 15 S.C.R.


A          Nava/kha and Sons v. Sri Ramanya Das & Ors.
           1970 (3) SCR1 = 1969 (3) SCC 537 - relied on.
          · 2.2 The price of immoveable property keeps on
      varying depending upon the market conditions and
      availability of a buyer. Such fluctuations may attract
8
      fresh higher offers but normally such offers cannot be
      made the basis for reopening the confirmed sale which
      was otherwise valid. In the present case, the sale made
      in favour of auction purchaser does f!Ot require any
c     interference. There is no good reason why the full price
      paid by the auction purchaser should be ordered to be
      refunded with interest etc. and possession which was
      delivered to it at the time of sale should be disturbed after
      passage of so much time. [Para 33] [129-H; 130-A-C]
D
                         Case Law Reference
      2004 (3) SCR 982                      referred to   Para 11
      2005 (3) Suppl. SCR 1073              referred to · Para 11
E (2008) 144 Company Cases 71 (SC)referred to Para 11
      2007 (6) SCR 1187                     referred to   Para 11
      2009 (3) SCR 735                      referred to   Para 11
      2000 (2) SCR 1102                     referred to   Para 20
F
      2003 (2) SCR 631                      referred to   Para 20
      1996 (2) SCR 960                      referred to   Para 20
      2000 (2) Suppl. SCR 288               referred to   Para 20
G 2013 (3) SCR 269                    held inapplicable Para 21
      2011 (15) SCR 336               held inapplicable Para 21
      2014 (3) SCR 861                     referred to    Para 31
      2008 (9) sec 299                     relied on      Para 32
H
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                      107
         M/S. HARYANA CONCAST LTD.

2015 (8) SCALE 713              relied on            Para 32    A
1970 (3) SCR 1                  relied on            Para 33

     CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3646 of 2015
                                                                 B
      From the Judgment and Order dated 15.12.2009 of the
Division Bench of the High Court of Punjab and Haryana at
Chandigarh in CAPP No. 28 of 2009.
                            WITH
                                                                c
     C.A. Nos.14736, 14737& 14738of2015

     C.A. Nos. 9293-9294 of 2014.

      C. U. Singh, V. K. Garg, Yashank Adhyaru, Rana
Mukherjee, Dr. Rajeev Dhawan, Dhruv Mehta, Sr. Advs., Arun D
BhardwajAAG,Anupam LasDas,Anirudh Singh, Sahil Monga,
Saran Suri, Ms. Divya Roy, Yash Pal Dhingra, Ravindra Bana,
Manish K. Bishnoi, Navindu Verma, Rajesh Sharma, Ms ..
Noopur Dubey, Ms. Shalu Sharma, Vikramjit Banerjee, Piyush
Gaur, Ronak Karanpuria, Ms. Madhavi Divan, Ms. Sushma E
Suri, Ms. B. Sunita Rao, Deeptakirti Verma, Ms. Neha Sharma,
Ms.Aparna Iyer, Ms. Uttara Babbar, Vinod Kapoor, Chandra
Shekhar Ashri, Ms. Sushma Suri, Saurabh Kirpal, Karan
Bharioke, SanjayAgarwal, Wattan Sharma, GautamAwasthi, F
Rishi Malhotra, Gunjan Kumar,Advs., for the appearing parties.

     The Judgment of the Court was delivered by

      SHIVA KIRTI SINGH, J. 1. A common issue of law:
Whether a Company Court, directly or through an Official G
Liquidator, can wield any control in respect of sale of a secured
asset by a secured creditor in exercise of powers available to
such creditor under the Securitization and Reconstruction of
Financial Assets and Enforcem~nt of Security Interest Act, 2002
                                                                  H
108         SUPREME COURT REPORTS                [2015] 15 S.C.R.


A     (for brevity 'the SARFAESI Act'), arises in all these matters
      which have been heard together and shall be governed by this
      common judgment.

        2. In order to understand the central issue involved in
B each of the matters, it may be useful to notice that Civil Appeal
  No. 3646 of2011 preferred by Pegasus Assets Reconstruction
  Private Limited (for brevity, 'Pegasus'), which has been heard
  as the lead matter, arises out of a Division Bench judgment of
  Punjab and Haryana High Court dated 15.12.2009 whereby
C the Division Bench upheld the judgment of Company Court
  and approved of certain fetters placed upon M/s. Pegasus
  Assets Reconstruction Pvt. Ltd., while allowing it to exercise
  its powers as a secured creditor under the SARFAESI Act
  and proceed with the sale of the secured assets. Since the
D judgment of Division Bench disallowed the appeal of Haryana
  State Infrastructure and Industrial Development Corporation
  (for brevity 'HSllDC') against the order of Company Judge
  allowing Pegasus to stay outside the winding up proceeding
  of the respondent Haryana Concast Limited, HSllDC is also
E before this ·court through SLP (C) No. 707 4 of 2010.

        3. The secured asset in the form of approximately 36
  acres of land of Haryana Concast Ltd. was subjected to auction
  by Pegasus in association and collaboration with the Official
F Liquidator as per order of the company judge and was ultimately
  sold for Rs.32 crores in favour of M/s. Venus Realcon Pvt. Ltd.
  One Vinod Rajaliwala challenged the orders of the company
  judge confirming sale in favour of M/s. Venus Realcon Pvt. Ltd.
  by preferring a company appeal and also through a public
G interest litigation (a writ petition). Both were dismissed by the
  Division Bench. Those orders have been challenged by Mr.
  Vinod Rajaliwala through Special Leave Petition (C) Nos.117-
  118 of 2011. The three matters indicated above thus relate to
H secured assets of the same coµipany under Liquidation, M/s.
  Haryana Concast Limited.                    ·     ·
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                         109
 M/S. HARYANA CON CAST LTD. [SHIVA KIRTI SINGH, J.]

      4. The fourth matter, C.A. No. 9293-94 of 2014 preferred     A
by Megnostar Telecommunications Private Limited (for brevity,
'Megnostar') arises out of a Division Bench Judgment of Delhi
High Court dated 17 .9.2012. By this order the Delhi High Court
has differed with the views taken by the Punjab and Haryana
High Court in the judgment assailed by Pegasus in Civil Appeal     B
No.3646 of 2011. According to Delhi High Court, the company
judge or the official liquidator cannot have any say in the sale
of secured assets by the secured creditors under the
SARFAESI Act. The Companies Act cannot be used to put
any fetters on the sale by secured creditors because a secured     C
creditor under Section 13 of the SARFAESI Act has been
granted a right to enforce the security interest "without the
intervention of the court or tribunal" in accordance with the
provisions of the SAR FAE SI Act. It goes without saying that if   D
the view taken by the Punjab and Haryana High Court in the
matter of Pegasus is approved and the Civil Appeal No. 3646
of 2011 is dismissed, then the Delhi High Court's view will
 stand disapproved and Civil Appeal No. 9293-94 of 2014 will
have to be allowed.                                                E
     5. In order to decide the issue indicated above, it is not
necessary to go into factual details relating to either the case
of Pegasus or to that of Megnostar. Only the broad features
necessary for appreciation of rival submissions in respect of      F
these matters have been taken note of.

C.A.No.3646 of 2011

      6. M/s. Haryana Concast Ltd., respondent no.1 suffered
a winding up order of the Company Judge of Punjab & Haryana        G
High Court in 1999. The only secured creditor, the Bank of
India obtained a recovery certificate against respondent no.1
from the Debt Recovery Tribunal, Chandigarh in 2002 for a
sum of Rs.5.84 crores approx. with pendente lite and future
interest @ 18% p.a. from the date of filing of the suit till       H
110         SUPREME COURT REPORTS                  [2015] 15 S.C.R.


A     realization. Although the High Court allowed the Official
      Liquidator to sell the assets of the company in May 2004 and
      the bank also submitted its claim before the Official Liquidator
      in July 2004 for Rs.10.58 crores approx. as dues upto 30 1h
      June 2004, the sale could not be effected for one reason or
B     the other. Being a guarantor, the HSllDC settled the liabilities
      of three banks by paying Rs.10.39 crores approx. and as a
      result acquired a charge only over the moveable assets, that
      is, raw materials of the company. Accordingly it was
      substituted/ subrogated in place of the three banks. As a
C     registered securitization company, Pegasus entered into an
      assignment agreement with the sole secured creditor, Bank
      of India on 27 .8.2008 and soon informed the Official Liquidator
      that it intends to remain outside the winding up process, to
      enforce its security as per the provisions of SARFAESI Act,
 0
      subject to the rights of the erstwhile workmen of the company,
      respondent no.1 as per Section 529A of the Companies Act.
      Pegasus pursued its aforesaid stand by filing an application
       before the Company Judge for recalling an order dated March
 E    20, 2008 wherein it had directed the Official Liquidator to
      undertake a fresh sale of the assets of the company. In this
       petition dated 22.09.2008, Pegasus also sought directions to
      the Official Liquidator to hand over the secured assets of the
      company in its favour. The Company Judge allowed Pegasus
 F    to proceed under the SARFAESI Act for enforcing its security
       by an order passed on March 20, 2009 but in view of orders
       passed earlier in the winding up proceedings the Company
      Judge laid down certain terms and conditions for permitting
       Pegasus to stay outside the winding up proceedings and bring
 G    about sale of secured assets under Section 13 of the
      SARFAESI Act read with Rules 8 and 9 of Security Interest
       Enforcement Rules, 2002 (hereinafter referred to as 'the
       Rules'). These conditions forming part of paragraph 19 of the
      judgment of the learned Company Judge are extracted
 H    herein below because these have been objected to by Pegasus
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                          111
 M/S. HARYANA CON CAST LTD. [SHIVA KIRTI SINGH, J.]

as fetters which the Company Judge could not have obtained          A
and therefore Pegasus preferred Company Appeal No.28 of
2009 which has been dismissed by the order under appeal
dated 15.12.2009. Para 19 is as follows :
      "19. If any attempt to harmonize the provisions of the
                                                                    8
      SARFAESI Act and the Companies Act could be made,
      in the context of orders for sale having already been
      made by the Company Court and the participation of
      the assignor of the applicant at several steps for the
      conduct of sale through the Company Court, it will be         c
      inexpedient unyoke the proceeding that were put through
      the O.L. While upholding the claim that the procedure
      laid down under the SARFAESI Act would enable the
      provisions of the Security Enforcement Rules to be
      applied for conduct and confirmation of the sale, the         D
      dispensation in this case would be
         (a) to permit the applicant to stay outside the winding
      up proceedings and take action to bring to sale the
      secured assets under Section 13 of the SARFAESI Act
      read with Rules 8 and 9 of Security Interest Enforcement      E
      Rules, 2002.
         (b) The applicant-Reconstruction Company shall
      keep all the steps taken under the SARFAESI Act and
      the relevant rules transparent and submit all the             F
      proposals for sale to the O.L. and the details of valuation
      obtained for the conduct of the sale for the purpose of
      determining the used price.
         (c) Sale shall be advertised with a specific clause
      that the winding up proceedings are pending before the        G
      Company Court, with details of case number and the
      Court of adjudication.
         (d) The expenses already incurred for the conduct
      of the sale by O.L. shall be deducted from out of the
112       SUPREME COURT REPORTS                    [2015] 15S.C.R.


A         sale proceeds before any appropriation or disbursement
          and deposited with O.L.
             (e) The Reconstruction Company shall place before
          the Company Court the details of its claim and all
          expenses incurred before the Company Court before
B         making any appropriation to himself and disbursed.
               (f) The surplus proceeds over what is lawfully due
           to it shall be deposited to the credit of the Company (in
           liquidation) before the O.L."
                                               .
C       7. The stand of the appellant, Pegasus is that the Division
  Bench erred in law in not appreciating that rights and liabilities
  of the appellant as an asset reconstruction company had to
  be governed by and within the four corners of the SARFAESI
  Act and not by or under the Companies Act. On a pointed
D query that it had accepted the order including the terms and
  conditions and finalized the sale of the secured asset in
  collaboration with the Official Liquidator, learned counsel for
  Pegasus fairly accepted that Pegasus was not against the sale
  of secured asset already concluded but the appeal is being
E pursued for getting the legal issue settled as a precedent for
  future, otherwise as an assets reconstruction company the
  appellant shall be facing similar fetters in case the secured
  assets happen to be of a company under winding up.
 F      8. Learned counsels representing the company
  respondent no.1 which is represented by the Official Liquidator
  and learned counsel for respondent no.2 HSllDC have
  advanced submissions to the contrary. According to them a
G winding up proceeding has to be supervised by the Official
  Liquidator as per orders of the Company Judge and the
  provisions of the Companies Act. The counsel for the company,
  respondent no.1 asserted that once the assets have come into
  the hands of the Official Liquidator, these have to be protected
H and governed by provisions of the Companies Act which are
   PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                     113
  M/S. HARYANA CON CAST LTD. [SHIVA KIRTI SINGH, J.]

 meant not only to serve the interest of secured creditor like A
 Pegasus but also to take care of interest of the workmen and
 by ascertaining their dues which have highes~ priority and
 require protection as per Section 529Aofthe Companies Act
 as well as interest of the unsecured creditors. The stand of
 respondent no.2 is that once the bank had opted to participate B
 in the winding up proceedings before the Company Judge,
 Pegasus should not have been permitted to take a contrary
 stand as it could have only stepped into the shoes of the bank.
 HSllDC had also preferred a cross appeal bearing No. 23 of
 2009 before the Division Bench against order of the Company C
 Judge dated March 20, 2009. Before the Division Bench, it
 claimed a right to be associated with Pegasus in the process
 of sale of the secured assets of the company, from beginning
 to end. However, it is clear as a crystal that HSllDC is neither D
 a secured creditor of the company under winding up nor it has
 stepped into shoes of any secured creditor.

 C.A.Nos.9293-9294 of 2014

        9. Megnostar is the company, now under liquidation, E
  which mortgaged its property bearing Plot No.1297
  ad measuring 502.33 Sq. Yds. situated at MIE, Bahadurgarh,
  Haryana along with structures, present and future, with
  respondent-bank through Memo of Deposit of Title Deeds
  dated 29.04.2008 for securing loans obtained from the bank. F
  In December 2008 respondent-bank issued a notice under
  Section 13(2) of the SARFAESI Act upon Megnostar on account
. of persistent defaults in makir19 timely payment of amounts
  due to the bank. On 05.02.2009 Megnostar requested for
  release of the secured assets to enable it to sell the same for G
  making part payment of dues of the bank. A Company Petition
  No.359 of 2009 was filed by an unsecured creditor M/s.
  Magicon lmpex Pvt. Ltd. for winding up of Megnostar but the
  bank was not made aware of this proceeding till visit of some
                                                                  H
114       SUPREME COURT REPORTS                   [2015] 15 S.C.R.


A officials from the office of the Official Liquidator on 28.08.2011.
  The bank obtained directions from the District Magistrate
  concerned under Section 14(1) of the SARFAESI Act. took
  over possession of the secured asset on 16.06.2010 and a
  notice to that effect was published in various newspapers on
B 18.06.2010. O.A. No.38 of 2009 filed by the bank against
  Megnostarwas allowed by DRT-11, Delhi on 13.07.2010 holding
  the company liable to pay to the bank Rs.12.95 crores approx.
  with pendente lite and future interest @ 15.5. % p.a. with
  quarterly interests from date of filing of O.A. till date of
C realization. To realize its dues, the respondent-bank published
  auction-cum-sale notice of the secured assets on 23.07.2011
  in exercise of its rights under Section 13(4) of the SARFAESI
  Act. In the public auction held on 24.08.2011 respondent, M/
D s. Mohan Tractors (P) Ltd. offered the highest bid of Rs.80
  lacs. As a successful auction purchaser, it was handed over
  the possession and title deed of the mortgaged property. On
  28.08.2011 this property at Bahadurgarh was visited by 4-5
  persons claiming to be from the office o.f the Official Liquidator.
E They had come to take possession of the property on the basis
  of an order dated 03.08.2011 in Company Petition No.359 of
  2009 whereby the Company Judge had appointed the Official
  Liquidator as a provisional liquidator with direction to take
  charge of all assets of the company Megnostar. The personnel
F from the office of the Official Liquidator were apprised of
  developments and sale under the SARFAESI Act but with the
  aid of police personnel they took forcible possession of the
  mortgaged property on August 30, 2011. In September 2011
  the bank filed C.A.No.1948 of 2011 in C.P. No.359 of 2009 for
G a direction upon the Official Liquidator to unseal the property
  and hand over its possession to M/s. Mohan Tractors. To similar
  effect was C.A.No.1947 of 2011 filed by M/s. Mohan Tractors.
  The Company Judge appointed a valuer who submitted a
  Valuation Report on 14.01.2012. As per the report the land
H was valued at Rs.77.44 lacs approx. arid the construction
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                          115
 M/S. HARYANA CON CAST LTD. [SHIVA KIRTI SINGH, J.]

existing on the land was valued at Rs.40.65 lacs, the total value   A
thus amounted to Rs.1.18 crores approx. The learned Company
Judge dismissed C.A. Nos.1947 and 1948 of 2011 by order
dated 26.4.2012. Against that, the bank respondent no.2
preferred Company Appeal No.58 of 2012 before the Division
Bench of High Court of Delhi. A separate appeal bearing no.62       B
of 2012 was filed by M/s. Mohan Tractors. Those appeals were
allowed by the Division Bench as per order under appeal dated
17.09.2012.

      10. The case of Mr. Vinod Rajaliwala requires separate C
consideration but only after an adjudication on the main issue
indicated earlier and after deciding which of the two views is
in accordance with law, of Delhi High Court in the case of
Megnostar or of Punjab & Haryana High Court in the case of
Pegasus. As the case of Pegasus has been argued as a lead D
matter, we propose to first consider the views of Punjab &
Haryana High Court. After noticing the Statement of Objects
& Reasons for enactment of the SARFAESI Act as discussed
by the Company Judge, the Division Bench took note of
detailed arguments advanced on behalf of Pegasus which is E
to the following effect. Section 5 of the SAR FAE SI Act provides
for acquisition of rights or interest in financial assets of any
bank or financial institution by any securitization company or
reconstruction company, inter alia, by entering into an
agreement and this Section begins with a non obstante clause. F
Section 9 enumerates various measures which can be
adopted by a securitization company or reconstruction
company, including the sale or lease of a part or whole of the
business of the borrower and this Section also begins with a G
non obstante clause. Chapter Ill consists of 7 sections
providing for enforcement of security interest created in favour
of any secured creditor. Section 13, which also begins with a
non obstante clause of a limited nature for overcoming the ·
hurdles of Section 69 or Section 69Aof the Transfer of Property H
116       SUPREME COURT REPORTS                  [2015] 15S.C.R.


A Act, 1882, creates a right in the secured creditor to enforce
  any security interest in its favour without the intervention of a
  court or tribunal, in accordance with the provisions of this Act.
  The detailed scheme for enforcement of the secured assets
  under various sub-sections and provisos in Section 13 were
B pointed out along with Section 35 and 37 in support of a
  submission that the provisions are not only a complete code
  for enforcement of secured asset by a secured creditor but in
  case of conflict with any other statute, the provisions of the
  SARFAESI Act would prevail. Some other statutes enumerated
C in Section 37 can play a supplemental role along with any other
  law for the time being in force including the Companies Act
  but obviously only till they are consistent with provisions of the
  SARFAESI Act. The relevant case laws were also cited and
  considered. The rival contention and case laws were noted
D
  for framing the main question of law in the following words : -
           'Whether the Company Court enjoys jurisdiction to issue
           supervisory direction to a securitization company/
           secured creditor in connection with a company in
 E         liquidation or under winding up in the face of Section
           13 of the SARFAESI Act or securitization company
           opting to stand outside the winding up is absolutely free
           to utilise the sale proceeds of assets of the company in
           liquidation?"
 F      11. The Division Bench of Punjab & Haryana High Court
  considered the case of Mardia Chemicals v. Union of India
  (2004) 4 SCC 311; Rajasthan State Financial Corporation
  v. Official Liquidator AIR 2006 SC 755 =(2005) 8 SCC 190;
G Bakemans Industries v. New Cawnpore (2008) 144
  Company Cases 71 (SC); Ram Kripal Singh v. State of Uttar
  Pradesh (2007) 11 SCC 22; and Central Bank of India v.
  State of Kerala (2009) 4 SCC 94 for coming to a conclusion
  in paragraph 34 that the Company Court enjoys the jurisdiction
H to issue directions to a securitization company or a secured
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                           117
 M/S. HARYANA CON CAST LTD. [SHIVA KIRTI SINGH, J.]

creditor who has opted to stay outside the winding up and            A
invoke its power under Section 13 of the SARFAESI Act.
     12. We are unable to subscribe to the aforesaid views.
On the other hand, after going through the judgment of Delhi
High Court in the case of Megnostar we are persuaded to              B
approve its views because of various reasons some of which
we shall enumerate and explain hereinafter.

      13. The relevant case laws discussed in the two
conflicting judgments are virtually the same but the error
committed by the Division Bench in the case of Pegasus lies C
mainly in coming to a conclusion that there is no inconsistency
between the Companies Act and the SARFAESI Act.if the
Company Judge issues supervisory directions to achieve the
object of Section 529A which finds a clear mention in one of D
the provisos of Section 13(9) of the SARFAESI Act. This view
is unacceptable for the reasons detailed by Delhi High Court
in the case of Megnostar. Those reasons commend
themselves to us also. We are particularly in agreement with
the view in paragraph 26 of the judgment which is as follows: E
      "26. If it were to be held that the Official Liquidator (who
      acts under the dictates of the Company Court) is to be
      also associated with the sale, it will naturally open up
      the fora of the Company Court also for entertaining
      matters relating to such sale and which as aforesaid is        F
      not only likely to lead to conflicts but is also contrary to
      the spirit of the SARFAESI Act of sale being without the
      intervention of the Court."
       14. However, there are certain areas covered by the Delhi G
High Court which need further elucidation and clarification. For
that it will be relevant and necessary to first go through the
ambit, scope and peculiarities of Statutes like the State
Financial Corporations Act, 1951 (for brevity the 'SFC Act')
and The Recovery of Debts due to Banks and Financial H
118         SUPREME COURT REPORTS                    [2015] 15 S.C.R.


A     Institutions Act, 1993 (for brevity the 'ROB Act') in contrast with
      the SARFAESI Act and some case laws which, in our view,
      are of special significance for better understanding of the issues.

         15. All the aforesaid Acts are Central legislations enacted
B for specific purposes. The SFC Act enables the State
  Governments to establish a Financial Corporation for a State
  on the lines of Central Industrial Finance Corporation set up
  under Act XV of 1948 to provide medium and long term credit
  to industrial undertakings, somewhat outside the normal
C lending activities of Commercial Banks. This Act, inter-alia,
  vests special privileges in the State Financial Corporations in
  the matter of enforcement of its claims against borrowers,
  throu.gh sections such as 29, 30, 31 and 32. Coercive steps
  including sale of.secured property is, vide Section 31 required
D to be taken by moving appropriate application before the
  concerned District Judge as per procedure prescribed under
  Section 32. Section 46B does bestow overriding status on
  this Act over the then existing law but not over the Companies
  Act of 1956 which is a later law. Hence, in several judgments
E it has rightly been held that if the defaulter is a company under
  winding up, a State Financial Corporation can at best be a
  secured creditor who may opt to remain out of winding up but
  nonetheless it will be subject to orders passed in accordance
F with law under the Companies Act.

           16. The RDBAct is of 1993, i.e. laterto the Companies
   Act. Its avowed object is to provide for the establishment of
   Tribunals for expeditious adjudication and recovery of debts
   due to banks and financial institutions and for matters
 G connected therewith or incidental thereto. This Act creates a
   special machinery for speedy recovery of dues of banks and
   financial institutions which, by an amendment of 2004 now
   include a registered securitization company or reconstruction
   company envisaged under the SARFAESI Act. Section 18
 H
    PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                           119
   M/S. HARYANACONCAST LTD. [SHIVAKIRTI SINGH, J.]

 bars the jurisdiction of ordinary courts or authority in respect      A
 of matters falling within the jurisdiction of Tribunal as specified
 in Section 17. An Appellate Tribunal is provided under Section
 20. The power of the tribunal extends to determining the debt
 due as well as its realization. Section 34 confers over-riding
 effect upon this Act over any other law in force.                     B

          17. In contrast, the SARFAESI Act was enacted in 2002
  to regulate securitization and reconstruction of financial assets
  and enforcement of security interest and for matters connected
  therewith or incidental thereto. lnter-alia, one of the main objects C
· of this Act is to clothe the banks and financial institutions in
  India with power to take possession of securities and sell them.
  All its significant provisions have been noted in detail in Mardia
  Chemicals in which vires of this Act was examined and upheld.
  A reading of Sections 9 and 13 of the SAR FAES I Act leaves D
  no manner of doubt that for enforcement of its security interest,
  a secured creditor has been not only vested with powers to do
  so without the intervention of the court or tribunal but detailed
  procedure has also been prescribed to take care of various
  eventualities such as when the borrower company is under E
  liquidation for which proviso to sub-section (9) of Section 13
  contains clear mandate keeping in view the provisions of
  Section 529 and 529A of the Companies Act, 1956. Since
  significant amendments were introduced in Section 529 while F
  inserting Section 529A through Amendment Act 35 of 1985,
  effective from 24.5.1985 and with the aid of a non obstante
  clause in sub-section (1) of Section 529A workmen's dues
  were given preference over other dues and made to stand
  pari passu with dues of the secured creditors, in case of G
  apparent conflict, this Court through various judgments has
  upheld the proceedings under the RDS Act as it happens to
  be a later Act with overriding effect over other laws. The interest
  of the workmen in respect of dues payable to them as per
  Section 529 and 529A of the Companies Act has been H
120         SUPREME COURT REPORTS                    [2015] 15S.C.R.


A     protected by permitting, wherever necessary, association of
      the Official Liquidator with the proceedings before the Debts
      Recovery Tribunal under the RDB Act. In our considered
      judgment, the same view is required to be taken in context of
      SARFAESI Act also, for the additional reason that Section 13
B     requires notice to the borrower at various stages which in the
      case of a company under winding up being a borrower would
      mean requirement of notice to the Official Liquidator. The
      Security Interest (Enforcement) Rules, 2002 (for brevity, 'the
      Rules') framed under the provisions of SARFAESI Act also
C      require notice upon the borrower or his agent at different
      stages. For sale of immovable secured assets, as per Rule
      8, the authorized officer can take possession by delivering a
       Possession Notice to the borrower and by affixing Possession
D      Notice on the outer door or at some conspicuous place of the
       property. Before the sale also, the authorized officer is required
      to serve to the borrower a notice of 30 days. Thus the Rules
       also ensure that the Official Liquidator is in knowledge of the
       proceedings under the SARFAESI Act in case the borrower
 E     happens to be a company under winding up. As a borrower,
       the Official Liquidator has ample opportunity to get the details
       of the workers dues as ascertained under the Companies Act,
       placed before the authorized officer and seek proper
       distribution of the amount realised from the sale of secured
 F     assets in accordance with various provisos under sub-section
       (9) of Section 13 of the SARFAESI Act. ..

         18. The above discussion supports the view taken by
   Delhi High Court that no order is required by the Company
 G Judge for association of the Official Liquidator in order to
   protect the interest of workers and to realize their dues.
   Sufficient provisions have been made for this purpose under
   the SARFAESI Act and the Rules framed thereunder.

            19. In the event, in the capacity of a borrower the Official
 H    Liquidator is not satisfied with the decisions or steps taken by
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                        121
 M/S. HARYANACONCAST LTD. [SHIVAKIRTI SINGH, J.]

the secured creditor or the authorized officer, at appropriate A
stage it has sufficient opportunity to avail right of appeal under
Section 17 of the SARFAESI Act before the Debts Recovery
Tribunal. There is a right of further appeal under Section 18
before the Appellate Tribunal. On the other hand, if the view
taken by Punjab & Haryana High Court in Pegasus is accepted, B
there shall be a conflict of rights and interest of the secured
creditor who have the right and liberty to realize their secured
interest in accordance with the provisions of the SARFAESI
Act on one hand, and the statutory rights and liability of the
Official Liquidator acting under the orders of the Company C
Judge as per provisions of the Companies Act, on the other.
The appellate fora shall also differ, leading to a situation of
uncertainty and conflict between the two Acts. In such a
scenario, we respectfully agree with the Delhi view and D
disapprove that of the Punjab & Haryana High Court.

      20 .. Coming to the case laws, on behalf of Megnostar,
Delhi view was assailed by placing reliance upon Rajasthan
State Financial Corporation. In this case decided by three
Judges, this Court examined the grievance of Rajasthan State      E
Financial Corporation in the context of conflict between the
SFC Act and the Companies Act. After taking note of various
earlier judgments of this Court in the case of Allahabad Bank
v. Canara Bank (2000) 4 SCC 406; International Coach
Builders Ltd. v. Karnataka State Financial Corporation            F
(2003) 10 SCC 482; Industrial Credit and Investment
Corporation of India Ltd. v. Srinivas Agencies ( 1996) 4
SCC 165; and A.P. State Financial Corporation v. Official
Liquidator (2000) 7 SCC 291, it was held in para 16 that a        G
financial corporation has the right to proceed under Section
29 of the SFC Act against a debtor, if it is a company, only so
long as there is no order of winding up. When the debtor is a
company in winding up, the provisions of Sections 529 and
529Aofth~ CompaniesActwould affect the rights of financial        H
122         SUPREME COURT REPORTS                   [2015] 15 S.C.R.


A     corporations because of a "pari passu" charge in favour of the
      workmen. In respect of such dues of the workmen the Official
      Liquidator has to be accepted as their representative.

            21. In the context of ROB Act, reliance was placed upon
B     another judgment of this Court by three Judges in the case of
      Bank of Maharashtra v. Pandurang Keshav Gorwardkar
      (2013) 7 SCC 754 wherein this Court held that the Debts
      Recovery Tribunal is not empowered to adjudicate/ determine
      dues of workmen of debtor-company. Once the company is in
C     winding up workmen's dues can be determined only by the
      liquidator under supervision of Company Court and by no other
      authority. In para 53, while considering Rajasthan State
      Financial Corporation decided by three Judges' Bench it
      was noticed that once a winding up proceeding has
D     commenced, the distribution of the proceeds of the sale of the
      assets at the instance of the banks or financial institutions
      coming under the ROB Act or SFC Act can only be with the
      association of the Official Liquidator and under the supervision
      of the Company Court. The reason for such a view was
 E    recognized to lie in Section 529Aofthe Companies Act which
      governs the distribution of assets as provided therein. But it
      was also noted that since there was a conflict as to who would
      be competent to sell the assets, it was held that for this purpose
      the ORT would be competent because the ROB Act of 1993
 F    being a later and special law shall prevail over the Companies
      Act which is a general law.

         22. Reliance was also placed upon this Court's judgment
   in Employees Provident Fund Commissioner v. Official
 G Liquidator (2011) 10 SCC 727. This case had arisen in the
   context of dues payable by an employer under Section 11 of
   the Employees Provident Fund and Miscellaneous Provisions
   Act, 1952 and the question was whether in granting priority,
   such dues would be subject to Section 529A of the Companies
 H
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                             123
 M/S. HARYANACONCAST LTD. [SHIVAKIRTI SINGH, J.]

Act. The answer was in the affirmative, i.e., the Companies            A
Act would, in this matter hold its field as there is no situation of
conflict.

      23. On behalf of respondent Bank, Kotak Mahindra as
well as Respondent No. 2, auction purchaser, the judgment in           B
the case of Rajasthan State Financial Corporation (supra)
was distinguished by placing reliance upon factual and legal
situation prevailing in that case as noted in Paragraph 2 of the
judgment. It was pointed out that Section 32 (10) of the SFC
Act contains ample clarification that if liquidation proceedings       C
have commenced in respect of the borrower before an
application is made under sub-section (1) of Section 31, the
financial corporation will not get any preference over the other
creditors unless it is conferred on it by any other law. In that
case no proceeding had been initiated under the SFC Act and            D
all developments had taken place in the liquidation proceeding.
Rajasthan State Financial Corporation was therefore unable
to take any advantage of provisions under SFC Act. At the
end of paragraph 2, this Court rightly held that "a mere right to
take advantage of any enactment without any act done towards           E
availing of that right cannot be deemed a right accrued."

      24. Since we have held earlier in favour of views of Delhi
High Court, it is not necessary to burden this judgment with the
case laws which support that view and have been noted by the           F
High Court. We are in agreement with the submissions
advanced on behalf of respondent Kotak Mahindra Bank as
well as respondent No.2 that there is no lacuna or ambiguity in
the SARFAESI Act to warrant reading something more into it.
For the purpose it has been enacted, it is a complete code             G
and the earlier judgments rendered in the context of SFCAct
or ROB Act vis-a-vis the Companies Act, cannot be held
applicable on all force to the SARFAESI Act. There is·nothing
lacking in the Act so as to borrow anything from the Companies
                                                                       H
124         SUPREME COURT REPORTS                  [2015] 15 S.C.R. ·


A     Act till the stage the secured assets are sold by the secured
      creditors in accordance with the provisions in the SARFAESI
      Act and the Rules. At the post sale stage, the rights of the
      persons or parties having any stake in the sale proceeds are
      also taken care of by sub-section (9) of Section 13 and its five
B     provisos (not numbered). It is significant that as per sub-section
      (9) a sort of consensus is required amongst the secured
      creditors, if they are more than one, for the exercise of rights
      available under sub-section (4 ). If borrower is a company in
      liquidation, the sale proceeds have to be distributed in ·
C     accordance with the provisions of Section 529A of the
      Companies Act even where the company is being wound up
      after coming into force of the SARFAESI Act, if the secured
      creditor of such company opts to stand out of the winding up
      proceedings, it is entitled to retain the sale proceeds of its
 0
      secured assets after depositing the workmen's dues with the
      liquidator in accordance with the provisions of Section 529A
      of the Company Act. The third proviso is also meant to work
      out the provisions of Section 529A of the Companies Act, in
 E    case the workmen's dues cannot be ascertained, by relying
      upon communication of estimate of such dues by the liquidator
      to the secured creditor, who has to deposit the amount of such
      estimated dues with the liquidator and then it can retain the
      sale proceeds of the secured assets. The other two provisos
 F    also are in aid of the liquidator to discharge his duties and
      obligations arising under Section 529A of the Companies Act.
      Thus, it is evident that the required provisions of the Companies
      Act have been incorporated in the SARFAESI Act for
      harmonizing this Act with the Companies Act in respect of dues
G     of workmen and their protection under Section 529A of the
      Companies Act. In view of such exercise already done by the
      legislature, there is no plausible reason as to take recourse to
      any pr9visions of the Companies Act and permit interference
      in the proceedings under the SARFAESI Act either by the
 H    Company Judge or the liquidator. As noted earlier, the Official
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                          125
 M/S. HARYANACONCAST LTD. [SHIVAKIRTI SINGH, J.]

Liquidator as a representative of the borrower company under        A
winding up has to be associated, not for supplying any
omission in the SARFAESI Act but because of express
provisions therein as well as in the Rules. Hence the exercise
of harmonizing that this Court had to undertake in the context
of SFC Act or the ROB Act is no longer warranted in respect         B
of SARFAESI Act vis-a-vis the Companies Act.

       25. The· aforesaid view commends itself to us also
because of clear intention of the Parliament expressed in
Section 13 of the SARFAESI Act that a secured creditor has C
the right to enforce its security interest without the intervention
of the court or tribunal. At the same time, this Act takes care
that in case of grievance, the borrower, which in the case of a
company under liquidation would mean the liquidator, will have
the right of seeking redressal under Sections 17 and 18 of the D
SAR FAES I Act.

      26. On account of the above discussions, the Division
Bench judgment of the Punjab and Haryana High Court under
challenge by Pegasus fails to meet our approval and is              E
therefore, set aside only for the purpose of clarifying the law.
Since the sale already made has not been assailed by
Pegasus, therefore that issue will abide by the views that we
shall indicate hereinafter in respect of SLP(C) Nos. 117-118
of 2011 preferred by Mr. Vinod Rajaliwala.                          F

       27. We grant leave in SLP(C) No.7074 of 2010 preferred
by HSllDC but only to dismiss this case as we have found the
grievance of Pegasus to be justified; it was entitled not only to
stay outside the winding up proceeding in view of provisions        G
of SARFAESI Act which is a special and later Act but was also
entitled to exercise its rights without any fetters that were
errnneously placed upon it by the company Judge and were
approved also by the Division Bench. Hence, the grievance
of the HSllDC that Pegasus should not have been permitted           H
126         SUPREME COURT REPORTS                [2015] 15 S.C.R.


A     to stay outside the winding up proceeding is found meritless.
      Consequently its appeal has to be dismissed.

           28. As we have approved the judgment of the Division
      Bench of Delhi High Court in the case of Megnostar, the
B     appeals preferred against the judgment in Civil Appeal Nos.
      9293-94 of 2014 are hereby dismissed. In the facts of the
      case there shall be no order as to costs.

         29. With respect to the case of Vinod Rajaliwala, it has
C been indicated earlier that approximately 36 acres of land of
  Haryana Concast Limited was put to auction and sale by
  Pegasus in association with official liquidator and was
  ultimately sold for Rs.32 crores in favour of M/s. Venus Rea Icon
  Private Limited. Vinod Rajaliwala challenged the orders of the
D company Judge confirming the sale by preferring a company
  appeal and also through a public interest litigation (a writ
  petition). Both were dismissed by the Division Bench of Punjab
  and Haryana High Court by orders passed on 23.9.2010.
  These orders in company appeal No. 10/2010 and PIL being
E CWP No.8422 of 2010 are under challenge at the instance of
  Mr. Rajaliwala through special leave petition (C) Nos. 117-118
  of 2011.

         30. Since the larger issue arising out of the conflicting
 F judgments of Punjab and Haryana High Court and Delhi High
   Court has already been addressed by us, the case of Mr.
   Rajaliwala requires adjudication, mostly on facts as to whether
   the sale confirmed by the Company Judge and approved by
   the Division Bench in favour of M/s. Venus Realcon requires
 G any interference. It is not at all necessary to go into the facts
   which preceded the sale in favour of M/s Venus Realcon for
   Rs.32 crores which till date stands confirmed. It is against
   confirmation of sale that Mr. Rajaliwala has preferred appeal
   as well as a PIL on the ground that the consideration money
 H dqes not reflect the correct value of the secured assets, i.e.,
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                      127
 M/S. HARYANACONCAST LTD. [SHIVAKIRTI SINGH, J.]

the land sold to Mis. Venus Realcon. In order to substantiate A
this claim, Mr. Rajaliwala was granted an opportunity by the
Division Bench to find out a higher bid. One M/s. ACHASTES
Promoters Private Limited through an application in Company
Appeal No. 10/2010 claimed to offer a bid of Rs.33 crores but
later withdrew the same: Thereafter, another buyer made an B
offer of Rs.37 crores but tendered a meagre amount of Rs.1
crore only before the Division Bench. On these facts the
Division Bench dismissed company appeal on 23.9.2010. As
a consequence, the PIL was also dis.missed on the same date.
In this Court, the petitioner claimed that the property was worth C
hundred of crores but ultimately petitioner persuaded another
entity M/s. Himalayan Infra Projects Private Limited to offer a
higher bid. This company was allowed to intervene and be
impleaded, and it deposited 10 crores in January, 2011 and D
Rs. 40 crores in April, 2011. That money is lying in deposit in
this Court.
      31. The argument on behalf of Mr. Rajaliwala and the
intervener Himalayan Infra Projects Private Limited is that this
Court should take a practical view and allow the offer of Rs.50 E
crores in comparison to Rs.32 crores deposited by the auction
purchaser. In reply, on behalf of Venus Realcon- respondent
No. 3, it was pointed out that Mr. Rajaliwala is himself a property
dealer and a Pilat his instance, in this matter, does not deserve
any consideration for lack of good faith, in view of Judgment in F
the case of Arun Kumar Agrawal vs. Union of India, 2014
(2) SCC 609. It was pointed out from materials on record that
the valuation of property has been changing from 2002 when
it was estimated to be Rs.10.13 crores. In January 2010 its
market value was around Rs.24-25 crores and the distress G
value was Rs.18-20 crores approximately as per two different
valuation reports. The valuation of Rs.75 crores approximately
in 2008 was unrealistic, solely on the basis of oral
communication from the Collector said to be based upon H
128       SUPREME COURT REPORTS                   [2015] 15 S.C.R.


A valuation for commercial plot and not for an industrial plot. It is
  pointed out that one bid in 2005 by M/s. Radha Raman
  Builders and Developers Private Limited for Rs.29 crores
  approximately for a larger plot than the actual land, could not
  materialize. The first offer by M/s. Venus Realcon on 9.4.2010
B was Rs.26 crores which on negotiation was raised to Rs.26.50
  crores. Subsequently on allegations made by Mr. Rajaliwala
  the Company Judge on 13.5.2010 held an open bid in Court,
  wherein M/s. Venus Realcon raised its bid to Rs.32 crores.
  The Court then ordered for fresh advertisement pursuant to
C which no bidder, including Mr. Rajaliwala offered more than
  Rs.32 crores. Hence the Company Court confirmed the sale
  in favour of M/s. Venus Realcon for Rs.32 crores but it was made
  subject to Special Leave Petitions filed by Pegasus and HSllDC.
          32. On considering the submissions of parties, we find
 D
   that the sale confirmed in favour of M/s. Venus Realcon for
   Rs.32 crores does not require any interference particularly at
   the instance of Petitioner-Vinod Rajaliwala. There was no
   illegality or irregularity established against the conduct of
 E auction and once it is found that the offer of Rs.32 crores was
   a fair offer in a competitive bid conducted fairly and the offer
   has been accepted and the sale confirmed, it would not be
   proper for this court to undermine the value of such auction
   sale conducted not only by the secured creditor but also by the
 F Official Liquidator who was permitted to be associated with
   the whole process of finding out of valuation as well as the
   conduct of sale. M/s. Venus Rea Icon has rightly placed reliance
   upon the judgments of this court in the case of Valji Khimji &
   Co. vs. Official Liquidator of Hindustan Nitro Product
 G (Gujarat) Ltd. 2008(9) SCC 299 and Vedica Procon Private
   Limited vs. Balleshwar Greens P. Ltd., 2015(8) SCALE
   713. In Valji Khimji, the law was enunciated in Paragraph
   28 in the following words:
           "If it is held that every confirmed sale can be set aside
 H
  PEGASUS ASSETS RECONSTRUCTION P. LTD. v.                          129
 M/S. HARYANA CONCAST LTD. [SHIVA KIRTI SINGH, J.]

       the result would be that no auction-sale will ever be A
       complete because always somebody can come after
       the auction or its confirmation offering a higher amount.
       It could have been a different matter if the auction had
       been held without adequate publicity in well-known
       newspapers having wide circulation, but where the B
       auction-sale was done after wide publicity, then setting
       aside the sale after its confirmation will create huge
       problems. When an auction-sale is advertised in well-
       known newspapers having wide circulation, all eligible
       persons can come and bid for the same, and they are C
       themselves to be blamed if they do not come-forward to
       bid at the time of the auction. They cannot ordinarily
       later on be allowed after the bidding (or confirmation) is
       over to offer a higher price. Of course, the situation
                                                                  D
       may be different if an auction-sale is finalized, say for
       Rs.1 crore, and subsequently somebody turns up
       offering Rs.10 crores. In this situation it is possible to
       infer that there was some fraud because if somebody
       subsequently offers Rs.10 crores, then an inference can E
       be drawn that an attempt had been made to acquire
       that property/asset at a grossly inadequate price. This
       situation itself may indicate fraud or some collusion.
       However, if the price offered after the auction is over
       which is only a little over the auction price, that cannot F
       by itself suggest that any fraud has been done."
       33. In Vedica Procon's case (supra) the aforesaid view
was noticed and after considering many judgments in
Paragraph 39, the Court approved the view taken in Navalkha
and Sons vs. Sri Ramanya Das & Ors., 1969 (3) SCC 537               G
that there is a discretion in the Company Court either to accept
or reject the highest bid before an order of confirmation of sale
is made. Hrn,\'.ever, once the Company Court is satisfied that
the price is adequate, the subsequent higher offer cannot be
a ground for refusing confirmation. The price of immoveable         H
130          SUPREME COW RT REPORTS               [2015] 15 S.C.R.


A property keeps on varying depending upon the market
  conditions and availability of a buyer. Such fluctuations may
  attract fresh higher offers but normally such offers cannot be
  made the basis for reopening the confirmed sale which was
  otherwise valid. In the present case, we are satisfied that the
B sale made in favour of M/s. Venus Rea Icon does not require
  any interference. There is no good reason why the full price
  paid by Venus Realcon should be ordered to be refunded with
  interest etc. and possession which was delivered to Venus
  Realcon at the time of sale should be disturbed after passage
C of so much time. In such circumstances, while granting leave
  in SLP(C) Nos.117-118, the consequent Civil Appeals are
  hereby dismissed but without any order as to costs. The money
  deposited in this case by the intervener M/s. Himalayan Infra
  Projects Private Limited should be refunded to it forthwith along
0
  with interest accrued thereupon.
        34. The views expressed and the orders passed
  hereinabove may once again be recapitulated as follows :-
  (1) Civil Appeal No. 3646 of 2011 is allowed only for declaration
E of law without interfering with the sale of the secured assets
  which has not been challenged by Pegasus. (2) Civil Appeal
  No.14736/2015 (Arising out of SLP(C) No. 7074 of 2010) is
  dismissed. (3) Civil Appeal Nos. 14 737-38/2015 (Arising out
  of SLP(C) Nos. 117-118 of 2011) are dismissed. The amount
F of Rs.50 crores deposited by the intervener Mis. Himalayan
  Infra Projects Private Limited shall be refunded to it forthwith
  alongwith interest accrued thereupon. (4) Civil Appeal Nos.
  9293-94 of 2014 are dismissed. The judgment and order of
  the Delhi High Court is affirmed by holding that powers under
G the Companies Act cannot be wielded by the Company Judge
  to interfere with proceedings by a secured creditor to realize
  its secured interests as per provisions of the SARFAESI Act.
            35. There shall be no order as to costs.
 H    Kalpana K. Tripathy                          Appeals disposed of.