2002 (8) TMI 563 - HC - Companies Law

Summary

Issues:
1. Appeal against the order of the Company Judge dated 26-3-2002 in C.A. No. 531 of 2000 in RCC No. 4 of 1997.
2. Allegations of misuse of office by the Official Liquidator.
3. Violation of principles of natural justice in passing the order without hearing the appellant.
4. Challenge to the order based on affecting civil rights and liberties without giving an opportunity to explain conduct.

Analysis:
The appeal was filed against the order of the Company Judge dated 26-3-2002 in C.A. No. 531 of 2000 in RCC No. 4 of 1997. The Official Liquidator sought various reliefs related to the sale of a car through public auction and circulation of handbills among Central Government offices. The Company Judge initially allowed the application but later passed an order without notice to the appellant, raising concerns about the disposal of assets, specifically three cars, by the Official Liquidator. The Judge directed the Regional Director to file an affidavit disclosing powers exercised and inspection/enquiry reports. The appellant challenged the order on grounds of violation of natural justice, as the order was made without hearing the appellant and alleged misuse of office without giving an opportunity to explain conduct. The learned counsel contended that such serious charges should not have been made without proper hearing. The Court found that the order affected civil rights and liberties of the appellant and was made without hearing, violating principles of natural justice. The Court held that post-decisional hearing was not sufficient in this case, emphasizing the importance of apprising the affected person before taking adverse action. The Court allowed the appeal, setting aside the order except for the direction to the Regional Director to file an affidavit.