Sanction for sale and compromise cannot be revoked after completion when the Official Liquidator has acted on it.

A court cannot revoke a sanction for sale of company property or compromise of suits after the Official Liquidator has acted on it and the transactions have been completed. The earlier sanction had been implemented through the sale and settlement of pending suits, so the court lacked jurisdiction to undo completed acts in the absence of clear statutory authority; the matter was not a review under Order 47 CPC. The suggested grounds of want of notice, absence of subordinate court approval, and suppression of material facts did not justify cancellation, as the sanction was general, interested persons were aware of it, and the compromise was beneficial to the estate and creditors.

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Issues: (i) Whether the District Court could revoke its earlier sanction for sale of company property and compromise of suits after the Official Liquidator had acted upon it. (ii) Whether the revocation could be sustained on merits on grounds of alleged want of notice, lack of subordinate court sanction, or suppression of material facts.

Issue (i): Whether the District Court could revoke its earlier sanction for sale of company property and compromise of suits after the Official Liquidator had acted upon it.

Analysis: The sanction earlier granted under the company liquidation powers had already been acted upon by the Official Liquidator, who entered into the sale and compromised the pending suits, resulting in decrees in terms of the compromises. The provisions invoked did not authorise the court to undo an act already completed in pursuance of its own express sanction. The applications were not proceedings for review under Order 47 of the Code of Civil Procedure, 1908, and no inherent power was shown to exist for revoking a sanction after rights had crystallised through completed transactions.

Conclusion: The District Court had no jurisdiction to revoke its sanction after it had been acted upon, and that part of the order was against the appellant.

Issue (ii): Whether the revocation could be sustained on merits on grounds of alleged want of notice, lack of subordinate court sanction, or suppression of material facts.

Analysis: The earlier permission to sell had been a general sanction subject to approval, and all interested persons were aware of it. No statutory notice requirement was shown to have been violated. The Official Liquidator's powers under the company law were not curtailed by his separate position as receiver in another suit. The later offer relied upon was made without earnest money and after the sale contract had been concluded, and the compromise was beneficial to the estate and creditors. The grounds relied upon for revocation did not justify setting aside the sanctioned sale and compromises.

Conclusion: The revocation was unsustainable on merits and was against the appellant.

Final Conclusion: The appeals succeeded, the orders revoking sanction were set aside, and the applications for cancellation of the sale and compromise were dismissed with costs.

Ratio Decidendi: A court cannot revoke a sanction for sale or compromise after the Official Liquidator has acted upon it and completed the transaction pursuant to that sanction, and such completed acts are not liable to be undone under a review or inherent-power jurisdiction absent clear statutory authority.

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