Confirmed liquidation sale upheld where a later higher offer could not unsettle completed auction rights.

An application to recall a confirmed company-court sale was held maintainable under Rule 9 of the Companies (Court) Rules, 1959 and the Court's inherent powers, even though it did not satisfy the conventional grounds for review under Order XLVII CPC. However, the Court refused to reopen the sale merely because a later higher offer was made. It applied the settled principle that a confirmed liquidation sale may be disturbed only for fraud, illegality, material irregularity, or gross inadequacy of price, and found the auction process, valuation, and consideration of liabilities to be adequate. Possession had passed and third-party rights had arisen, so the purchaser's rights were left undisturbed.

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Issues: (i) whether the application to recall or review the order confirming sale was maintainable under the review jurisdiction and the inherent powers of the Company Court; (ii) whether a subsequent higher offer, by itself, justified reopening a confirmed sale after possession had been delivered and third-party rights had arisen.

Issue (i): whether the application to recall or review the order confirming sale was maintainable under the review jurisdiction and the inherent powers of the Company Court.

Analysis: The application did not strictly satisfy the ordinary grounds for review, since no discovery of new matter, apparent error, or analogous sufficient reason was shown. Even so, the Court held that the proceeding before it was not confined to Order XLVII of the Code of Civil Procedure, 1908, and that, in the context of company proceedings, the Court could act under Rule 9 of the Companies (Court) Rules, 1959, read with its inherent powers, to do complete justice. The Court therefore treated the objection based on the bar against review of review orders as inapplicable to the facts of the case, though it also noted that the application was delayed.

Conclusion: The application was held maintainable, but not as a conventional review under Order XLVII of the Code of Civil Procedure, 1908.

Issue (ii): whether a subsequent higher offer, by itself, justified reopening a confirmed sale after possession had been delivered and third-party rights had arisen.

Analysis: The Court applied the settled principle that in company-liquidation sales the Court must seek a fair and adequate price and may interfere where the sale is vitiated by fraud, illegality, or material irregularity, or where the price is grossly inadequate. On the record, however, the sale had been preceded by repeated attempts, wide publicity, valuation material, and consideration of municipal liabilities. The confirmed bid was found to be reasonable and commercially adequate in light of those liabilities, and the purchaser had already paid substantial consideration, taken possession, incurred expenditure, and created third-party interests. In these circumstances, a marginally higher later offer was not treated as a sufficient ground to unsettle the completed transaction.

Conclusion: The confirmed sale was not liable to be reopened merely because the applicant offered a higher price.

Final Conclusion: The Court declined to disturb the confirmed auction sale and left the purchaser's rights undisturbed, holding that the later higher offer and the surrounding circumstances did not warrant interference.

Ratio Decidendi: In company-liquidation sales, a later higher offer does not by itself justify reopening a confirmed sale once the Court is satisfied that the price obtained was adequate and no fraud, illegality, or procedural irregularity is shown, especially where possession has passed and third-party rights have intervened.

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