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Issues involved: Controversy over auction sale of company property, subsequent purchasers retaining possession, violation of court orders, role of Official Liquidator, contempt of court.
Controversy over auction sale: The High Court allowed a writ petition challenging the auction sale of a company's property, setting aside the auction and ruling that subsequent purchasers had no right to retain possession. The court directed the U.P. Financial Corporation to consider the petitioner's offer and negotiate for the best price, releasing the deposited amount to the petitioner. Appeal to Supreme Court: Subsequent purchasers filed a Special Leave to Appeal before the Supreme Court, which was dismissed, allowing them to remain in possession for four months to prevent damage to stored potatoes. The company also filed an appeal, which was converted into a civil appeal and ultimately dismissed in 2010. Role of Official Liquidator: The company was wound up under the Companies Act, and the Official Liquidator should have taken possession of its assets. However, the Official Liquidator, U.P. Financial Corporation, and subsequent purchasers violated court orders by allowing the purchasers to retain possession and operate the business, disregarding the judgments of the High Court and Supreme Court. Contempt proceedings: The decision of the Official Liquidator, U.P. Financial Corporation, and subsequent purchasers to allow the retention of possession was seen as an attempt to circumvent court judgments. The court issued notices to the parties involved, directing the Official Liquidator to take physical possession of the company's assets within a week and submit a report. Contempt proceedings were considered for flouting court orders.
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