MUHAMMAD MOOSA K. LAGHARI, J. - Vide this order References No. 02/2005 and 03/2005 filed by the Official Assignee are being disposed of, as directed by Honourable Supreme Court vide order dated 15.02.2006 passed in Civil Appeal No. 1071/2005.
2. Briefly stated the facts giving rise to filing of abovesaid References are that vide order dated 04.6.2004. 'M/s Sindh Alkalis Limited Karachi was wound up by Company Bench of this Court and the Official Assignee was appointed as Official Liquidator of the said, company. By another order dated 20.9.2004 the Official Liquidator was directed to sell all the assets of the company.-
3. Accordingly auction proceedings were conducted and bids were offered. The highest bid of Rs.45.00 Crore was given by M/s. Ibrahim Shamsi and Abdullah Rafi. Ultimately the Official Assignee submitted Reference No. 02/2005 on 22.03.2005 seeking orders for acceptance of the said bid of Rs.
45.00 Crore. Said Reference was placed in Court on 28.03.2005, on which orders were passed for issuing notices to the Petitioners and secured creditors for 04.4.2005. The. Diary of 04.4.2005 reveals that the Court was informed by (the then) Official Assignee and an A.V.P, of NBP that there was a likelihood of improvement and that for the said purpose a meeting was going to be held in the office of Official Assignee. Vide this order the Official Assignee was directed to furnish a fresh reference on 11.04.2005 and the reference was directed to be taken up alongwith fresh reference.
However, it seems that on 21.3.2005 a new development took place, a man by name Memon Abdul Qadir submitted to the Official Assignee an offer of Rs. 460 million. Having come to know about the said offer the "Shamsi" filed objections on 06.4.2005. An urgency application was moved by them for hearing of the objections and the matter was placed in Court on 08.4.2005 when it was ordered that the objections and the Reference be fixed on 03.05.2005. But much before the above date the Official Assignee seems to have moved Reference No.03/2005 alongwith an application for urgent hearing. The matter was taken up on 18.04.2005, which resulted into passing of the order which was impugned before the Honourable Apex Court. Vide Reference No. 03/2005 the Official Assignee submitted that a new bidder namely, Memon Abdul Qadir had given an offer of Rs. 46.10 Crore for the purchase of entire assets of the Company. He also sought permission to call all the bidders for further improvement. The said Reference was placed in Court on 18.4.2005 when the Official Assignee was directed to call the last two bidders and make close bidding amongst themselves, It appears that M/s. Ibrahim Shamsi and others having become aggrieved by orders 04.4.2005 and 18.4.2005, filed Civil Petition No.319-K of 2005 which was ultimately converted into Civil Appeal No. 652 of 2005 and vide order dated 28.6.2005 the matter was remanded to the Company Bench of this Court with direction to decide Reference Nos. 02/2005 and 03/2005 alongwith all the objections and applications of parties.
However, when the case came up before the Court on 11.7.2005 the said M/s Ibrahim Shamsi and others raised their bid from Rs. 45.00 Crore to Rs. 46.10 Crore whereas Memon Abdul Qadir raised his offer from Rs. 46.10 to Rs.46.20. Ultimately it was observed that as the bids so far given were not in substance real bids depicting real value of the assets of the company, the Official Assignee was directed to call for fresh bidding through publication in all newspapers of the country. As result of advertisement, the Official Assignee received only one bid of Rs. 2.5 Crore, It appears that on 03.8.2005 during the course of hearing on a query raised by the Court from the learned counsel for the bidders M/s. Ibrahim Shami and Abdullah Rafi as to whether they were ready to increase bid amount and match the same with highest bid amount of Rs.46.20 offered by Memon Abdul Qadir, they replied in negative and consequently the offer Of Rs. 46.20 given by Memon Abdul Qadir was accepted and he was directed to deposit the balance amount within 15 days from the date Of the order. Thereafter the said Memon Abdul Qadir moved an application for extension of time by six months with a further grace period of four weeks for depositing the balance sale consideration.
However, the said application was dismissed by order dated 24.10.2005 as no cogent reason was given for grant of such request.
4. It appears that, in the meantime, M/s. Ibrahim Shamsi and Abdullah. Rafi having felt aggrieved by the order passed on 03.8.20Q5 whereby bid of Rs. 46.20 Crore given by Memon Abdul Qadir was accepted, challenged the same before the Honourable Supreme Court in Civil Appeal No. 1071 of 2005. The Honourable Supreme Court while hearing a Misc. Application filed in the said appeal on 25.10.2005, passed an order whereby it was observed that Memon Abdul Qadir failed to deposit the balance sale consideration within the stipulated time of 15 days and consequently the offer of M/s. Ibrahim Shamsi and Abdullah Rafi for Rs. 46.15 Crore was accepted and they were allowed 15 days time to deposit the balance sale consideration and the matter was adjourned to 11.11.2005. On 10.11.2005 when this J.M. Came up before the Court, on the request of the auction purchaser namely, Abdullah Rafi, permission was granted to deposit the amount in terms of the order of the Supreme Court. However, ultimately the aforesaid Civil Appeal No. 1071/2005 was allowed by the Honourable Supreme Court and the case was remanded to this Court for giving decision on Reference No.2 and 3 of 2005 afresh in the light of the observations contained in the judgment dated 28.6.2005 earlier passed by the Honourable Supreme Court in Civil Appeal No. 652 of 2005.
5. Counsel for the contesting parties have been heard.
6. It is contended on behalf of the bidders/ Objectors, M/s. Ibrahim Shamshi and others that after they were declared as highest bidder, entertainment of the offer of Memon Abdul Qadir was illegal and unlawful, It is further contended that the said Memon Abdul Qadir was, at all, not competent to give any offer as he was totally an stranger and was not on the scene during the entire process of bidding and the improvements proceedings and emerged all of a sudden from the back doors at the eleventh-hour when the bid of M/s. Ibrahim Shamsi and. Others was at the verge of acceptance, It was submitted that the highest bid given by M/s. Ibrahim Shamsi and others for Rs.
46.15 has already been accepted by the Honourable Supreme Court vide its order dated 25.10.2005 and he has accordingly deposited the required amount through cheques etc.
7. On the other hand, it was contended on behalf of the bidder namely, Memon Abdul Qadir that he had made offer of Rs. 46.10 which was subsequently enhanced to Rs.46.20 Crore which was the highest offer and keeping in view the larger interest of the company and the creditors, the Honourable Court vide order dated 03.8.2005 had rightly accepted his offer, It was contended that the said bidder Memon Abdul Qadir is ready and willing to deposit the balance amount provided he is given sufficient time to do so. It was further contended that although he did not participate in the auction proceedings but in such matters, it is always the larger interest of the company and the creditors which is to be kept in mind and as his offer is the highest one, it deserves to be accepted.
8. The contentions advanced at The bar on behalf of the parties have been considered and the material placed on record including the Objections of the concerned parties have been scrutinized.
9. So far as Reference No. 03/2005 is concerned, it may be. Observed that from the perusal of the material available on record, it reveals that after advertisement in the newspapers 17 sealed offers were received by the Official Assignee. Thereafter the matter was fixed before the learned Official Assignee for further improvement on 22.2.2005, 10.3.2005 and on 17.3.2005 when all the bidders attended the proceedings and submitted their bids of of which the highest bid was that of M/s. Ibrahim Shamsi and others. The bidder namely, Memon Abdul Qadir neither submitted his sealed offer in pursuance of the publication in the newspapers, nor did he participate on a single date in the entire proceedings of bidding/improvement. It was only when the bidder namely M/s. Ibrahim Shamsi and Abdullah Rafi gave the highest bid of Rs. 45.00 Crore, that all of a sudden Memon Abdul Qadir emerged at the eleventh-hour when the bid of M/s. Ibrahim Shamsi was likely to be accepted.
10. There appears a considerable weight in the arguments addressed on behalf of the Shamsi Group, that Memon Abdul Qadir was, in fact, a spurious bidder. He was completely-of of the scene till 21st March 2005, when he submitted an offer, on a plain paper addressed to Mr. Bashir Ahmed Memon, the then Official Assignee.- Neither it contained the address of the bidder, nor even a phone number. The letter/bid does not contain any initial/seal/ signature or inward register number of the Office of Official Assignee to lend credibility to the bidder, and/or the genuineness.
However, the then Official Assignee informed the Court, through his reference No. 03/2005 that said Memon Abdul Qadir belonged to Sharjah UAE. Incidentally the bid/offer was dated 21.03.2005 but the reference was made on 15.04.2005, though in the meantime the matter came up before the Court on 21.03.2005, and on 8.03.2005 when the earlier reference No. 02/2005 was taken up in presence of Mr. Bashir Ahmed Memon, the then Official Assignee and again on 04.04.2005 but the Official Assignee did not disclose the fact to the Court and eve withheld the fact, that Shamsi Group had filed objections against the offer of Memon Abdul Qadir entertained by him at a belated stage, which led to passing of the order dated 18.04.2005.
11. Hard evidence may not be available to reveal obvious betrayal of trust but the highly mysterious circumstances speak for themselves, that there was lack of transparency in the handling of affairs, for which the office of Official Assignee could, by no means, claim clean slate, as apparently all was not well there.
12. Leaving aside for a moment, the circumstances as narrated above, it will be pertinent to note that vide order dated 03.8.2005 the offer of Rs. 46.20 given by Memon Abdul Qadir was accepted and he was directed to deposit the balance amount within 15 days from the date of the orders. But he failed to comply with the order of the Court and instead he moved an application for extension of time by six months with a grace period of four weeks on the self- designed pretext that he could not comprehend the order for depositing the balance consideration that the balance sale consideration was to be deposited within 15 days. Such application for extension being misconceived was dismissed by order dated 24.10.2005.
13. It would further be appropriate to mention here that when order dated 25.10.2005 was being passed by the Honourable Supreme Court, the counsel of Memon Abdul Qadir was-asked by their lordships to deposit the remaining amount within two days but he was reluctant to avail such grace and requested for three months' time, It would be advantageous to reproduce hereunder the, .Relevant" observations from the said order of Supreme Court: "It is mentioned in the concluding paragraph of the impugned order that auction purchaser, namely, Memon Abdul Qadir was directed to deposit the balance amount within 15 days. When confronted with this fact, the learned counsel appearing on his behalf admitted that the auction purchaser had not complied with the order and had not deposited the balance amount within due date but has moved application for extension of time.
2. Even today we asked learned counsel for auction purchaser Respondent No. 2 to deposit the remaining amount within two days to which he was reluctant and requested that three months time may be allowed."
(Emphasis laid)
Even during the course. Of hearing of the References no statement, at all, was made that said Memon Abdul Qadir is ready and willing to deposit the balance amount within a reasonable time.
Note of the fact may also be taken that said Memon Abdul Qadir is permanently settled in Sharjah, U.A.E, and at no point of time he ever personally appeared either to participate in the bidding process or even thereafter during the Court proceedings. Even his address permanent or temporary is not on record.
14. In view of above discussion, Reference No.03/2005 dated 15.4.2005 regarding acceptance of the offer of said Memon Abdul Qadir is rejected, he having failed to comply with the conditions/orders.
15. So far as Reference No. 02/2005 regarding the 'offer made by M/s. Ibrahim Shamsi and others is concerned, it will be noted from the preceding paragraphs that when order dated 25.10.2005 was being passed on C.M.A. 5300/2005 moved in Civil Appeal No. 1071/2005, their lordships of the Apex Court asked the counsel of Memon Abdul Qadir to deposit the balance sale consideration within two days but he was. Reluctant to do so and instead requested for three months' time, while during the proceedings M/s. Ibrahim Shamsi and others showed their willingness to pay the balance amount within 15 days, as such they we're allowed to deposit the balance amount in this Court- within 15 days. The relevant portion from the said order is reproduced as under: "Raja Muhammad Ibrahim, learned counsel for appellants volunteers that appellants are prepared to pay the balance amount within 15 days, if allowed by this Court.
3. It would be pertinent to mention here that while matching the bid auction purchaser offered bid of 46.20 crore whereas appellants offered 46.15 crore. Thus the difference in between the two is that of 05 which is ignorable difference.
4. Since the offer of the appellants appears to be reasonable and there is a meager difference of the amount in between the two bids, as such, we allow appellants to deposit the balance amount before the learned Company Judge of the High Court of Sindh within 15 days."
Thereafter vide order dated 10.11.2005 passed in this case, the Official Liquidator was directed to receive the amount from M/s. Ibrahim Shamsi and others in terms of the order passed by the Supreme, Court. However, the Counsel for M/s. Ibrahim Shamsi and others in his letter dated 08.11.2005 addressed to the Company Judge of this Court made a statement, which is totally contrary to the record, that after the passing of order dated 25.10.2005 by the Supreme Court in the above-said Civil Appeal, the Honourable Judges of the apex Court orally directed the counsel to deposit the balance amount conditionally, It would be advantageous to reproduce hereunder the relevant portion from the said letter, which was, addressed by the counsel for Ibrahim Shamsi: "That after passing the above order, Advocate of the Appellants invited the attention of the Honourable Apex Bench as to whether amount is to be deposited conditionally because the Award has not been passed in. Terms of Reference No. 02. The Honourable Apex Court orally directed the counsel to deposit the amount before the learned Company Judge of the Honourable High Court of Sindh."
(Emphasis laid)
Consequently the balance amount was deposited subject to various conditions which find no mention in the entire order passed by the Honourable Supreme Court, It will be appropriate to reproduce hereunder the relevant portion from the said letter indicating such conditions:- "And this amount is conditionally deposited on the direction of the Honourable Supreme Court of Pakistan and the matter is adjourned for 11/11/2005 for further hearing. Therefore, the said Guaranteed Cheques shall be cashed when the appellants bid as contemplated in the Reference No. 02 made by the Official Liquidator for award in favour of the appellants and all the properties, physical and peaceful vacant possession is given to the appellants and a letter to the Govt, of Sindh for extension of lease as agreed and mentioned in the above reference No. 02 dated 21.03.2005 made by the official assignee of the Honourable Sindh High Court. Please Note."
(Emphasis laid)
16. Apart from the fact that the language used in the letter is inappropriate and much below the required level of etiquette and decency, the letter contains the conditionalities and the stipulations, which the bidder has arbitrarily and ridiculously chosen for imposedly inflicting upon the Court.
Indeed none of those, at all, finds mention in the whole order passed by the Honourable Supreme Court, Besides, the statement of the counsel appears to be ridiculous, to suggest that after passing of the order the Honourable Judges of the Supreme Court permitted the said auction purchasers to make conditional payment. Moreover, in the 'terms' incorporated in the advertisement published in the newspapers for inviting sealed bids/tenders, there is absolutely no mention that physical and peaceful vacant possession of all the properties would be handed over to the auction purchaser even before encashment of the cheques if payment. Towards sale consideration is made through cheques, I humbly feel that making such flimsy statement with great force that such amount was being deposited conditionally "on the direction of the Honourable Supreme Court of Pakistan", was unwarranted as there was no such direction, at all, in the order passed by the Honourable Supreme Court.
17. In any case, the Official Assignee has reported that after the passing of order dated 25.10.2005 by the Honourable Supreme Court, M/s. Ibrahim Shamsi and others deposited two cheques of Rs.
44.15 Crore with conditional bank guarantee. However, on presentation of the said cheques before the concerned bank, the same were dishonoured and such fact was brought to the notice of the Court by the Official Assignee through Reference No.09/2005 wherein he also prayed for forfeiture of earnest money of Rs.2.00 Crore- deposited by M/s. Ibrahim Shamsi and others which is yet to be decided.
18. In view of above, the said bidders namely M/s. Ibrahim Shamsi and others have also failed to comply with the order passed by the Supreme Court 25.10.2005 in Civil Appeal 1071/2005 for depositing the balance sale consideration within 15 days, rather they have taken a very amazing stand that after passing of the above order, the Honourable Supreme Court permitted them to make conditional payment, In the circumstances, they have rendered themselves disentitled to the bid. Obviously they do not seem to be sincere in their offer/bid. Resultantly, Reference No. 02/2005 is also liable to be rejected, It is accordingly rejected.
19. In so far as the legal position is concerned, it may not be of of place to mention here that. "A bid in an auction is only an offer and without the confirmation of sale, it does not create any right in the property in favour of successful bidder, therefore the confirmation of Sale cannot be claimed as of right". This "wa& exactly laid down in Afzal Mahmood But Vs. Banking Court No.2, Lahore-PLD 2005 S.C 470.
20. The evidently obvious circumstances, in which both the bidders acted, coupled with their dubious conduct were adequate enough to create an impression that none of them was genuine bidder. Both of them wanted their share of booty. Failing to get what they wanted at a throwaway price, they have thrusted meaningless litigation to the detriment of the company, the creditors, and all other share holders. Indeed they need to be ridded off.
21. Although the Official Assignee has made References No. 07/2005 and 09/2005 seeking therein orders for forfeiture of the earnest money deposited by Mr. Memon Abdul . Qadir and M/s. Ibrahim Shamsi and others respectively, but those have been deferred for the time being as the direction of the Honourable Supreme. Gourt contained in its order dated 15.02.2006 in Civil Appeal No. 1071/2005 is only to the extent of decision of References No. 02/2005. And 03/2005.
Reference Nos. 02/2005 and 03/2005 stand disposed of accordingly.
22. As in the order of remand dated 28.6.2005 of the Honourable Supreme Court this Court was directed to decide the abovesaid References alongwith all the objections and applications of the parties, as such I would also deal with C.M.A. No. 2408/2004 which was also listed on 04.4.2005 alongwith Reference No.02/2005 on which date the order subsequently challenged in the Supreme Court was passed.
23. This application was filed by Export Promotion Zone Authority (EPZA) under Order 1 Rule (T)(2)
CPC for being impleaded as one of the Respondents. According to EPZA the Board of Revenue had leased of certain land situated in Deh Rehri to the company under liquidation viz., M/s. Sindh Alkalis Limited Karachi but subsequently the allotment in respect of 200.00 acres Out of The said land was canceled and the same was leased of to EPZA vide letter dated 17.02.2001 of the B.O.R. From the perusal of the case diary, it reveals that on 03.8.2005 said application was fixed before the Court and after elaborately discussing all the relevant points,' the same was disposed of. It will thus not be appropriate to make any further observations.
Official Assignee is-directed to proceed further and get the matter placed in Court for passing further orders.