2004 (6) TMI 334 - HC - Companies Law

Summary

Issues Involved:
1. Recall of the order dated June 12, 2001.
2. Direction upon WBFC to hand over possession of the assets.
3. Confirmation of sale in favor of ANMOL.
4. Recall of the order dated September 2, 2003, and setting aside the sale in favor of ANMOL.
5. Setting aside the sale in favor of ANMOL by a secured creditor.

Issue-wise Detailed Analysis:

1. Recall of the order dated June 12, 2001:
This application (C.A. No. 455 of 2001) was made by a contributory of the company in liquidation, seeking to recall the order directing the Official Liquidator to take possession of the assets due to the company's default. The court noted that this application, along with two others, was virtually disposed of based on the chronological events recorded earlier. Hence, no further order was passed on this application.

2. Direction upon WBFC to hand over possession of the assets:
This application (C.A. No. 512 of 2001) was also made by the same contributory, praying for a direction upon WBFC to return the possession of the company's assets and for liberty to commence business and production. As with the first application, this was disposed of without further order.

3. Confirmation of sale in favor of ANMOL:
WBFC applied (C.A. No. 366 of 2003) for confirmation of the sale of the company's assets to ANMOL for Rs. 37.5 lakhs. The court confirmed the sale on September 2, 2003, and directed the Official Liquidator to invite claims and settle the creditors' dues. The Official Liquidator was to send the particulars of the workers' claims to WBFC for payment.

4. Recall of the order dated September 2, 2003, and setting aside the sale in favor of ANMOL:
This application (C.A. No. 532 of 2003) was made by the same contributory, seeking to set aside the sale confirmed in favor of ANMOL. The contributory contended that the sale was contrary to the court's direction as the Official Liquidator was not informed, the property was sold below valuation, and there was an opportunity to settle WBFC's claim for Rs. 33 lakhs. The court found that the Official Liquidator was informed at the relevant time, the sale price was not significantly lower than the valuation, and the contributory's offer did not present a better alternative. The court emphasized that once a sale is confirmed by the court, it should not be set aside except on cogent reasons to maintain the sanctity of court orders.

5. Setting aside the sale in favor of ANMOL by a secured creditor:
This application (C.A. No. 86 of 2004) was made by M/s. Doshi Agents Pvt. Ltd., a secured creditor, seeking to set aside the sale in favor of ANMOL. The creditor argued that the sale could fetch a higher price and should be conducted afresh. The court noted that the creditor did not present a better offer and emphasized the importance of finality in court-confirmed sales. The court also considered the significant investment made by ANMOL post-sale and found no cogent reason to set aside the sale.

Conclusion:
The court dismissed the applications for setting aside the sale (C.A. No. 532 of 2003 and C.A. No. 86 of 2004), emphasizing the need to maintain the sanctity of court orders and the finality of the sale. The court directed the Official Liquidator to conduct a local inspection to verify the measurement of the land and report any discrepancies. There was no order as to costs.