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Issues: (i) whether prospective buyers had locus standi to intervene in the appeal or be impleaded as parties, and (ii) whether an agreement to sell executed before winding up conferred on the appellants any preferential right to purchase the company's immovable property in liquidation, so as to displace the court's duty to secure the best price for creditors.
Issue (i): whether prospective buyers had locus standi to intervene in the appeal or be impleaded as parties.
Analysis: The applicants were only prospective bidders with no direct lis arising out of the appellants' 1981 agreement. Their role was confined to offering bids when the property was brought to sale, and they had no necessary or proper party status in the dispute between the appellants and the company in liquidation.
Conclusion: The applicants had no locus standi to be impleaded or to be heard as interveners, and the civil applications were not maintainable.
Issue (ii): whether an agreement to sell executed before winding up conferred on the appellants any preferential right to purchase the company's immovable property in liquidation, so as to displace the court's duty to secure the best price for creditors.
Analysis: An agreement to sell does not create any interest in immovable property. Once the company is ordered to be wound up and an official liquidator is appointed, disposition of assets must conform to the Companies Act, 1956 and the relevant rules, including the requirement of court sanction and the mandate to protect the interests of all creditors. The liquidator and the court must realise the maximum possible value of the asset, and where the record shows substantially higher competing offers than the valuation report, the property cannot be given to a claimant merely because of an unimplemented prior agreement. Preferential treatment would prejudice unsecured creditors and would amount to recognising a right not sanctioned by law.
Conclusion: The appellants acquired no preferential or exclusive right to purchase the property on the basis of the 1981 agreement, and the appeal on that claim failed.
Final Conclusion: The challenged order was sustained, the appellants' claim to priority purchase was rejected, and the liquidation court's duty to obtain the best realizable value for the company's assets for the benefit of creditors was affirmed.
Ratio Decidendi: A pre-winding-up agreement to sell does not create an interest in the property of a company in liquidation, and the court must prefer the course that secures the best price for the asset in the interest of the creditors rather than confer an exclusive purchase right on the basis of such agreement.
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