Locus standi and jurisdictional validity: a guarantor-shareholder could not stop sale of mortgaged company property.

A guarantor-shareholder lacked locus standi to challenge sale of a company's mortgaged property because he was neither mortgagor nor mortgagee, had not discharged the debt, and could not invoke the company's separate right of redemption or subrogation. The court also held that an order granting the receiver power of sale was not a nullity where the court had jurisdiction; even if arguably erroneous, it remained binding and could not be treated as void to sale. Acquiescence by the company and official liquidator, together with the belated challenge, further supported rejection of the objection.

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Issues: (i) Whether the appellant, as a guarantor and shareholder, had locus standi to challenge the order directing sale of the company's mortgaged properties. (ii) Whether the order dated 13 August 1984 granting the court receiver power of sale was a nullity or otherwise invalid so as to prevent sale of the property.

Issue (i): Whether the appellant, as a guarantor and shareholder, had locus standi to challenge the order directing sale of the company's mortgaged properties.

Analysis: The appellant was neither the mortgagor nor the mortgagee. The mortgaged property belonged to a separate juristic entity, and the individual shareholder could not assert the company's right of redemption or oppose the mortgagee's enforcement in a mortgage suit. The appellant had also not discharged the mortgage debt, so no right of subrogation arose. His position as a contributory in winding up did not confer a right to challenge the sale order in the mortgage proceedings.

Conclusion: The appellant had no locus standi to challenge the sale order.

Issue (ii): Whether the order dated 13 August 1984 granting the court receiver power of sale was a nullity or otherwise invalid so as to prevent sale of the property.

Analysis: An order is a nullity only where the court lacks inherent jurisdiction. The mortgage suit was within jurisdiction and the sale order was passed by a competent court. Even if the order were assumed to be erroneous, it would not be void. The mortgagor company and the official liquidator had acquiesced in the sale process, and the statutory framework governing redemption and winding up did not prohibit sale by the receiver in the circumstances. The challenge was also belated and had been accepted in practice for years.

Conclusion: The order of 13 August 1984 was not a nullity and remained binding.

Final Conclusion: The challenge to the receiver's power of sale failed on both standing and merits, and the sale process was permitted to proceed.

Ratio Decidendi: An order passed by a court having jurisdiction is not a nullity merely because it is alleged to be legally erroneous, and a person who is neither mortgagor nor mortgagee cannot ordinarily challenge enforcement of the mortgage on the basis of a company's separate legal personality or an unfulfilled guarantor's position.

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