TaxTMI 
TaxTMI 
TaxTMI 
2008 (5) TMI 401
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....creed by a common judgment dated 24-7-1993. The Bank filed execution applications which were transferred to Debts Recovery Tribunal on establishment of the Tribunal under Recovery of Debts due to Banks and Financial Institutions Act, 1993. Recovery certificates were issued in favour of the Bank and the Bank was allowed to execute the decree. 5. Since the matter was pending in the Company Court and Official Liquidator was appointed, the Bank made an application, being Company Application No. 219 of 1996 in Company Petition No. 18 of 1990 in accordance with the provisions of section 446 of the Companies Act, 1956 (hereinafter referred to as 'the Act') read with rule 117 of the Companies (Court) Rules, 1959 (hereinafter referred to as 'the Rules') for granting leave to proceed with the sale of the property of the Company. 6. The Company Court, vide its order, dated 13-8-999 granted the permission. 7. The Bank then took steps for sale of land and building of the Company. It got valuation report from approved valuer, assessed market value and realizable value, submitted copies of judgment, recovery certificate and valuation report, etc. to the Official Liquidator. It made an applicat....
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....ful, violative of principles of natural justice and fair play inasmuch as no notice was issued and no opportunity of hearing was afforded before passing the said order, which adversely affected the appellant. The Division Bench upheld the contention of the appellant, allowed the appeal filed by him and set aside the order passed by the Company Judge. The matter was again ordered to be placed before the learned Company Judge for passing an appropriate order in accordance with law. 12. The learned Company Judge, thereafter, heard the parties and by an order dated 8-9-2006, set aside the sale which was in favour of the appellant and ordered that the amount deposited by the appellant be refunded to him. The appellant approached the Division Bench of the High Court but the Division Bench also dismissed the appeal. The said order is challenged in the present appeal. 13. On 12-2-2007, notice was issued by this Court. The matter thereafter appeared on the board from time to time. Status quo was also granted. Parties were permitted to file replies and a direction was issued to the Registry to place the matter for final hearing on a non-miscellaneous day and that is how the matter has been....
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....he other hand, supported the order passed by the learned Company Judge and confirmed by the Division Bench. It was submitted that the Recovery Officer had no power, authority or jurisdiction to confirm sale and an order of confirming sale passed by him on 13-2-2006 was, therefore, without power or authority. Moreover, Company proceedings were pending before the learned Company Judge. The Company was ordered to be wound up. Official Liquidator was appointed who was in charge of the assets of the Company. He was not taken in confidence, nor was he associated with the auction of assets and properties of the Company in liquidation and an action had been taken by the Recovery Officer which was contrary to law. Even the report submitted by the Official Liquidator expressly stated; "Since Official Liquidator was not associated with the proceedings of sale, he has no comments to offer". 17. So far as the order passed by the learned Company Judge is concerned, it specifically and unequivocally stated that permission of the court should be obtained before sale is confirmed or finalized. That order was passed as early as on August 13, 1999. In an order, dated 25-3-2005 also, it was expressly....
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....d. B.Certified copy of the judgment and decree passed by the Subordinate Judge, Bhongir in O.S. No. 57/89, dated 24-7-1993 shall be made available to the Official Liquidator without delay. C.The certified copy of the order that would be passed by the Debt Recovery Tribunal, Bangalore shall be made available to the Official Liquidator without avoidable delay. D.The petitioner-Bank shall file the valuer's report in the court before the properties covered under the mortgage deed are put to sale. E.Permission of this Court shall be obtained before the sale of the properties movable or immovable, is confirmed or finalized. F.The petitioner-Bank shall undertake to deposit and shall deposit the workmen dues with the Official Liquidator as and when quantified by him as per the provisions of section 529(A) of the Indian Companies Act. G.Whatever surplus remains after the sale and realization of the dues of the secured creditors and the workmen, as per law, the balance sale proceeds shall be made available to the Official Liquidator for being dealt with in accordance with the provisions of the Companies Act and the Rules. 21. An order, dated 28-3-2005 in Company Application No. 187 of....
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....ceptance get any vested right in the property so that he may demand automatic confirmation of his offer. The condition of confirmation by the Court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case it is the duty of the Court to satisfy itself that having regard to the market value of the property the price offered is reasonable. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion. In Gordhan Das Chuni Lal v. T. Sriman Kanthimathinatha Pillai AIR 1921 Mad. 286, it was observed that where the property is authorised to be sold by private contract or otherwise it is the duty of the Court to satisfy itself that the price fixed is the best that could be expected to be offered. That is because the Court is the custodian of the interests of the Company and its creditors and the sanction of the Court required under the Companies Act has to be exercised with judicial discretion regard being had to the interests of the company and its creditors as well. This princ....
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....ng the objections, if filed. We find substance in the argument. Order 21 Rule 92 of the Code of Civil Procedure provides that the civil court shall have power to make an order confirming the sale and thereupon the sale shall become absolute. What Section 71 of the Code provides is that where the execution of the decree is passed by the competent civil court, which cannot be satisfied and requires sale of the agricultural holding of a pakka tenant, the auction-sale of such land shall be conducted by the Collector on fulfilment of certain conditions. It is, therefore, crystal clear that only the auction-sale of an agricultural land is to be held and conducted by the orders of the Collector and not the confirmation of such sale. In view of the fact that in the present case the auction-sale of the appellants' land was not confirmed by the civil court, the auction-sale was a nullity and the executing court was right when it set aside the impugned auction-sale." 28. It is true that when the Company Judge set aside the sale on 17-3-2006, the order was reversed by the Division Bench of the High Court since it was in breach of natural justice. That does not, however, mean that the Company....