Confirmed private treaty sale cannot ordinarily be recalled by a co-ordinate Bench; appellate relief may preserve the transaction on just terms.

A confirmed sale by private treaty, once concluded and acted upon, should not ordinarily be recalled by a co-ordinate Bench after the purchaser has altered its position. In this matter, the recall order was held unsustainable in its original form, but appellate intervention was considered appropriate to mould relief rather than simply restore the earlier order. The court recognised that private treaty sales may be permissible, though public auction is generally the better course where demarcation and resale efforts have failed. The transaction was preserved on revised payment terms to protect the estate, the workers and the purchaser, with default consequences including re-possession and public auction.

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Issues: (i) Whether the order confirming the sale by private treaty could be recalled or set aside by another co-ordinate Bench after the sale had been concluded and acted upon; (ii) Whether the sale, instead of being annulled, ought to be modified in appellate jurisdiction having regard to the competing interests of the purchaser, the workers, and the official liquidator.

Issue (i): Whether the order confirming the sale by private treaty could be recalled or set aside by another co-ordinate Bench after the sale had been concluded and acted upon.

Analysis: The sale had been concluded pursuant to a court order, conveyance had been executed, and the purchaser had altered its position by investing money and incurring stamp duty. The challenge by the workers was belated, and although they had locus standi, a co-ordinate Bench ought ordinarily not to recall another Judge's order unless there was an apparent error on the face of the record. The impugned recall was treated as irregular, though not one warranting complete invalidation on that ground alone.

Conclusion: The recall of the earlier sale order could not be sustained in its original form, but the matter was fit for appellate intervention rather than simple restoration of the recalled order.

Issue (ii): Whether the sale, instead of being annulled, ought to be modified in appellate jurisdiction having regard to the competing interests of the purchaser, the workers, and the official liquidator.

Analysis: The court recognized that private treaty sale was permissible in appropriate cases under Section 457(1)(c) of the Companies Act, 1956, but the better course after failed attempts at demarcation and resale was public auction. Since the earlier sale to Bharat Metal had led to a refund of Rs.70 lakhs and the purchaser before the court agreed to match that amount, the interests of justice were served by preserving the transaction with enhanced payment terms rather than undoing it entirely. The court therefore exercised appellate power to mould relief and protect both the estate and the purchaser from prejudice caused by the earlier irregularity.

Conclusion: The appellate court modified the sale order, restored the transaction on revised monetary terms, and directed staged payment with interest, failing which re-possession and public auction were to follow.

Final Conclusion: The appeal was allowed only in part: the recall order was set aside, the earlier sale order was modified, and the transaction was sustained subject to enhanced payment and default consequences.

Ratio Decidendi: A court order confirming a concluded sale should not ordinarily be recalled by a co-ordinate Bench after the purchaser has altered position, but appellate jurisdiction may be used to mould relief and preserve the transaction on just terms where complete annulment would cause undue prejudice and defeat the ends of justice.

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