TaxTMI 
TaxTMI 
2004 (10) TMI 326
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....urt on 20-4-1999 by providing that the applicant was also entitled to the amount of Rs. 1,56,21,839.25 being the interest that has accrued on the purchase price of Rs. 2 crores paid by it for the assets of the Bengal Paper Mills Co. Ltd., a company in liquidation. The applications are opposed by the creditors some of whom were the appellants in the appeals. 2. The Bengal Paper Mills Co. Ltd. was ordered to be wound up in a winding up petition filed by its creditors. The order was passed on 24-4-1987. Even before the order for winding up, the assets were put in possession of two joint receivers appointed in a suit by one of the creditors. On the official liquidator being appointed in liquidation, the joint receivers were directed to put the Official Liquidator in possession of the assets of the debtor company. They put him in possession. The possession was thus obtained by the Official Liquidator. After getting the assets valued, the company court on 29-6-1989 granted leave to the Official Liquidator to sell the assets and properties of the company in liquidation. Pursuant thereto, the Official Liquidator issued a sale notice on 14-9-1989. Respondent No. 2 in the appeal, the applic....
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....crores by the Official Liquidator subsequent to recovery of possession as aforesaid." 3. On 4-6-1999, the applicant requested the Official Liquidator to refund the amount of Rs. 2 crores deposited by it towards the purchase price as directed in the judgment. The Official Liquidator promptly refunded a sum of Rs. 2 crores to the applicant on 6-7-1999. It is the case of the applicant that it had claimed that it was also entitled to the interest earned by the Official Liquidator on investment of the sum of Rs. 2 crores, but that the Official Liquidator refused to pay any interest. It is in that context that the present applications have been filed by the applicant seeking what it calls a clarification of the judgment rendered by this Court. 4. According to the applicant, its claim for interest was for the period from 15-9-1989 to 20-4-1999 on the sum of Rs. 2 crores. This Court had passed an order on 20-1-2000 calling upon the Official Liquidator to furnish information on the investment of the sum of Rs. 2 crores and the interest that had been earned and the Official Liquidator had filed a statement which indicated that the interest that was earned for the period in question was Rs.....
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.... 1,56,21,839.25 and that the said interest was really an accretion to the purchase price paid by the applicant and once the purchase price was directed to be refunded to the applicant by setting aside the sale, the applicant was also entitled to the interest accrued, as an accretion to the asset. He, therefore, submitted that the judgment of this Court required a clarification in that regard and really no review of the judgment was necessary and relief could be granted to the applicant on these applications. Counsel appearing for the creditors, on the other hand, submitted that the relief now being claimed must be deemed to have been refused by this Court while it ordered the refund of the purchase price of Rs. 2 crores and also allowed the applicant to make an application before the company court claiming payment out of the amounts allegedly expended by it for the revival of the company. The prayer made was beyond the scope of a petition for clarification of the judgment and it was really, a claim for further relief and such a relief cannot be granted on these applications. The applicant had enjoyment of the properties and its profits for a period of 10 years and really it was a c....
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....st or not to award interest. Considered in the context of that discretion, it is clear from the judgment rendered by this Court that this Court refused to direct the payment of interest to the applicant even while directing the refund of the purchase price paid by the applicant to the Official Liquidator. In such a situation it is not possible to accede to the prayer of the applicant to order the payment of interest on the purchase price paid by it, based on the principle embodied in Order XXI rule 93 of the Code on this application for a clarification of the judgment. In the circumstances of the present applications, we have to proceed on the basis that this Court has exercised its discretion not to award interest on the purchase price in the light of the directions issued by it in that behalf. 11. Learned counsel for the applicant relied on the decision in Motors & Investment Ltd. v. New Bank of India [1997] 11 SCC 271 and submitted that in that case the Court ordered payment of interest to the purchaser on the sale being set aside. On an examination of paragraph 6 of the said decision, it is seen that the question was not discussed as such. But the Court did order the interest ....
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....cant may not succeed. This is not a case where the applicant was deprived of both his money and the property purchased by him. There was, therefore, no failure of consideration. By the subsequent order of Court, the sale was set aside; but during the interregnum, the applicant had the benefit of the assets he had purchased. The other contracting party, the company in liquidation was deprived of the use of its assets. The creditors who held the properties as security were deprived of their right to deal with the security or to enjoy the benefits of the security during the interregnum. In fact, the securities available to the creditors were utilized by the auction purchaser - the applicant. In that situation, the applicant might have the obligation to account for the profits. Certainly, while rendering the main judgment, this Court was conscious of all these aspects while ordering refund only of the purchase price deposited without providing for payment of interest to the purchaser but at the same time leaving it open to the purchaser to work out its claim for the expenses incurred by it before the company court. 13. As stated in Goff and Jones The Law of Restitution (sixth edition)....
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....n as a going concern for a price of Rs. 10 crores. But a counter offer was received from M/s. Zoom Traders and Reality Ltd., the applicant in I.A. No. 15 of 2004, for Rs. 17.75 crores for the entire assets of the company in liquidation on "as is where is" basis. In this situation, the company court has directed the parties to get a clarification from this Court as to the mode in which the assets should be sold, whether as a going concern or as property "as is where is", meaning thereby that the purchaser will be free to dispose of the land, machinery and other equipments as he pleased. It is the submission of the Union that the workers of the Union will be benefited if the property is sold as a unit and a going concern and it is in that context that they have filed I.A. No. 13 of 2004 for clarification. It is in that application that M/s. Zoom Traders & Realty Ltd. wants to intervene, to press its claim for purchase of the assets "as is where is" but not with a view to run the industry or revive the industry. 17. We find that these applications are misconceived. The learned company judge was also in directing the parties to seek a clarification from this Court. In liquidation, the....