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Confirm sale once highest bid accepted

After accepting the highest offer in an auction by an official liquidator, the company court cannot refuse to confirm the sale because subsequently another person offered a higher amount. The price of the property might have risen in the meantime, but that is no reason to accept a higher bid, the Supreme Court stated in its judgment, Vedica Procon Ltd vs Balleshwar Greens Ltd. The company judge of the Gujarat High Court ordered winding up of Omex Investors Ltd in 1990 and appointed the liquidator. The land was auctioned in open court in which 11 persons participated in the 12 rounds. Vedica offered the highest at Rs 148 crore. It deposited the earnest money and later sought extension of time to deposit the rest. The time was allowed. Meanwhile Balleshwar Greens, the second highest bidder moved the high court offering Rs 160 crore and seeking the recall of the earlier decision. The high court allowed it, leading to the appeal of Vedica in the Supreme Court. Allowing the appeal, the judgment said the court has always maintained that a concluded proceeding cannot be reopened whenever a higher offer is received in respect of the sale of the property of a company in liquidation.

Article referred: http://www.business-standard.com/article/opinion/higher-price-in-re-auction-not-legal-115082300797_1.html

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