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Issues:
Stay of proceedings, Feasibility of scheme, Adequacy of sale price, Delay in sale, Creditor agreement, Valuation report, Delay tactics by directors. Stay of Proceedings: The appellant argued for a stay of proceedings, contending that rejection would frustrate the appeal. The court emphasized that admission of an appeal does not automatically grant a stay. The court must exercise discretion judiciously, considering all circumstances. The court noted that lack of crucial information at the time of admission could have influenced the decision differently. The court highlighted that the stay could potentially frustrate the order itself. Feasibility of Scheme: The appellant argued that the scheme was feasible, but the court pointed out various uncertainties affecting its success. Concerns were raised about the conditions of the scheme, particularly the continuation of management in inefficient hands. The court highlighted objections from creditors and the Industrial Finance Corporation, emphasizing the need for a comprehensive evaluation before proceeding with the scheme. Adequacy of Sale Price: The appellant contended that the proposed sale price was inadequate. However, the court noted that wide publicity was given for the sale, and only one bidder submitted an offer. The bidder expressed concerns about delays impacting the sugarcane season. The court emphasized the importance of timely sale to prevent capital loss for the purchaser. Delay in Sale: The court highlighted the urgency of completing the sale due to the advancing sugarcane season. Delays could result in financial losses for the purchaser, impacting the effective utilization of the purchased assets. The court considered the practical implications of delaying the sale and the potential consequences for all parties involved. Creditor Agreement: The court noted that a substantial number of creditors, amounting to Rs. 3,50,000, expressed satisfaction with the price offered for the assets. However, the Industrial Finance Corporation, holding the largest stake, did not support the proposal. The court emphasized the importance of creditor agreement in such matters. Valuation Report: The appellant's valuation of the assets significantly differed from the assessments of the liquidator and the officer of the Industrial Finance Corporation. Discrepancies in valuation raised doubts about the adequacy of the proposed sale price. The court considered the valuation reports and their implications on the overall sale process. Delay Tactics by Directors: The court observed a pattern of delay tactics by the directors, including failed scheme attempts and adjournments during liquidation proceedings. The court expressed skepticism about the intentions behind the scheme proposal and highlighted the lack of practical business experience on the appellant's part. The court considered the history of delay tactics in evaluating the current stay application. In conclusion, the court dismissed the notice of motion for a stay of sale, citing the lack of a compelling case based on the presented facts and circumstances. The judgment emphasized the need for a thorough evaluation of all aspects, including creditor agreement, feasibility of the scheme, valuation reports, and potential delays.
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