MP High Court Sends Bharat Commerce Asset Sale Dispute Back To Company Court To Consider Post-Auction Higher Bid

The Madhya Pradesh High Court has sent back for fresh consideration a dispute over the sale of assets of Bharat Commerce and Industries Ltd., finding that the Company Judge did not consider a bidder's arguments for entertaining a higher post-auction offer.

“Upon perusal of the said impugned order, we find that the aforesaid contentions were not considered by the company judge.”

A Division Bench of Justice Vijay Kumar Shukla and Justice Alok Awasthi passed the order on April 23 in an intra-court appeal filed by Dilip Kumar Agrawal against rejection of his application seeking consideration of his ₹42.25 crore offer.

The dispute arises from liquidation proceedings of Bharat Commerce and Industries Ltd, whose immovable assets comprising industrial land at Rajpura, Punjab, measuring about 2,40,500 sq ft, were put up for sale under the supervision of the Official Liquidator attached to the High Court.

The Official Liquidator conducted an e-auction on January 29, 2025, with a reserve price of ₹29 crore. Kalindi Associates emerged as the highest bidder with an offer of ₹31 crore.

After the auction closed, Maa Sharda Oils, which had not participated in the auction, submitted a higher offer of ₹35 crore and deposited earnest money with the Official Liquidator. The liquidator then asked Kalindi Associates to enhance its bid to ₹35 crore and placed the matter before the court.

The Division Bench noted that in earlier proceedings, the Company Court had recorded that the property's valuation was approximately ₹36.31 crore while the highest auction bid was only ₹31 crore. It had declined to directly accept the third-party offer, citing the need to preserve the sanctity of the auction process, but had not treated the auction as having attained finality.

Agrawal later approached the court with an offer of ₹42.25 crore, contending that the Company Judge erred in rejecting his application on the ground that the bid had attained finality.

Senior Advocate Vivek Khedkar, appearing for Agrawal, relied on the Supreme Court's ruling in Divya Manufacturing Company Pvt Ltd v Union of India, arguing that even where a sale certificate has been issued, a higher offer by a third party may still be considered.

He argued that the Company Judge wrongly treated the Supreme Court's later decision in Vedica Procon Pvt Ltd v Balleshwar Greens Pvt Ltd as having overruled Divya Manufacturing.

According to Agrawal, Vedica Procon considered Divya Manufacturing but did not overrule it, and both judgments remained binding precedents of equal strength.

Counsel for the respondent opposed the appeal, pointing out that a separate company appeal filed by BCI Staff Colony Residents Welfare Association had already been dismissed. Agrawal's counsel responded that the earlier appeal had been filed by different parties and did not involve the grounds being raised in the present case.

The Division Bench found that these submissions had not been considered by the Company Judge.

“Considering the same, the matter is remanded back to the Single Judge to decide the application afresh after considering the contention raised by counsel for the appellant without being influenced by the earlier order.”

The court also recorded Agrawal's submission that, unlike the appellants in the residents' appeal, he was prepared to demonstrate his bona fides by depositing ₹5 crore.

The bench directed that the matter be listed before the Company Judge in the week commencing May 4, 2026.