Court sale in liquidation: long default in balance payment defeats conveyance and can render the sale unenforceable.

A permanent stay of winding up proceedings does not erase the winding up order; the proceeding remains in suspended animation, so the Company Court retains jurisdiction to deal with the liquidation estate and related applications. In a court-conducted sale under liquidation, timely payment of the balance consideration is a material condition: prolonged default, even with possession and incidental benefits, justified of equitable indulgence, denial of conveyance and related reliefs, forfeiture of part consideration, and treatment of the sale as a nullity, with the estate restored to the Official Liquidator for further action.

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Issues: (i) Whether the application was maintainable despite the permanent stay of the winding up proceedings; (ii) whether the confirmed sale could be sustained and the applicant granted conveyance and related reliefs despite long default in payment of the balance consideration.

Issue (i): Whether the application was maintainable despite the permanent stay of the winding up proceedings.

Analysis: A permanent stay does not obliterate the winding up order. The proceeding remains in suspended animation and continues to subsist, though inoperative for the time being. The Company Court therefore retained jurisdiction to consider the application and to pass appropriate directions relating to the liquidation estate.

Conclusion: The objection to maintainability was rejected.

Issue (ii): Whether the confirmed sale could be sustained and the applicant granted conveyance and related reliefs despite long default in payment of the balance consideration.

Analysis: In a court-conducted sale under the company liquidation regime, payment of the purchase money within the stipulated time is a material condition. The applicant paid only part of the consideration and remained in default for decades while enjoying possession and other benefits. The Court held that no equitable indulgence was warranted, the delay could not be condoned, and the applicant was not entitled to have the sale perfected by conveyance or to retain the benefit of the purported sale. The sale was therefore treated as vitiated and the part consideration was ordered to be forfeited.

Conclusion: The sale was declared a nullity and the applicant was denied all substantive reliefs.

Final Conclusion: The application failed in its entirety, the purported sale was set aside in effect, and the liquidation estate was directed to be restored to the Official Liquidator for further action in accordance with law.

Ratio Decidendi: In a court sale in liquidation, failure to pay the balance purchase money within the time fixed by the court can render the sale unenforceable and disentitle the purchaser to conveyance or equitable relief, even where possession and incidental benefits have been enjoyed for a long period.

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