A higher counter offer for a liquidated company can replace the already accepted bid price, if it is found to be below the market value, the Supreme Court has ruled.
The ruling has held that high courts, which supervise the winding up process, can accept a counter bid on the satisfaction that the first bid was below market value.
The judgement was delivered in a case involving Gujarat-based company Global Arya Industries Ltd, in which the acceptance of first bid was recalled, as the final bidder offered Rs 10 lakh more than the second highest bidder.
Chiripal Textile Mills’ offer of Rs 7.6 crore was accepted by the apex court ahead of the offer of Shradhha Aromatics, which had offered Rs 7.5 crore. Shradha Aromatics had moved SC against the Gujarat high court’s decision which gave go ahead to Patel Agro Diesel’s bid of Rs 1.3 crore, as it was the highest bidder in auction. Later, Shradha offered Rs 1.5 crore in that round of bidding.