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TMI Blog1963 (1) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... e same order, further proceedings in winding up of the company were transferred to the District Court at Madurai. The official receiver, Madurai, who was later appointed official liquidator, was given a direction by the District Court to sell the properties. The sale was originally held on August 1, 1956. The highest bid recorded was Rs. 1,21,000. On being moved by the petitioning creditor the District Judge directed the continuance of the sale till August 13, 1956, and for accepting the highest bid after obtaining the orders of court. The highest bid then received was for a sum of Rs. 1,26,000 from the third respondent, the Madurai District Wholesale Co-operative Stores Ltd. This offer was however not accepted by the court. In the fresh sale that was held on December 10, 1956, which admittedly was conducted after due publicity, individual notices having been given to all the shareholders, the third respondent again became the highest bidder for a sum of Rs. 1,30,000. There was an attempt to have that sale set aside by a shareholder, who was also a director of the company, in C.M.P. No. 29 of 1957. The learned District Judge found that the price obtained at the sale was a proper on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (thereby empowering a review of the order) being merely a rule of procedure would not apply to the present case as that enactment has now been superseded by the Act of 1956 and as the corresponding section 483 in the latter Act did not confer any such power. Thus it is argued the power to review a judicial order would therefore be confined to Order 47, rule 1, Civil Procedure Code, and as the application has been rejected, there will be no right to appeal therefrom. We consider that it is unnecessary to deal with the preliminary objection as we are of opinion that the judgment of the learned District Judge can be sustained on the merits of the case itself. There are certain matters which are beyond dispute. The official liquidator before putting up the properties for sale did obtain the sanction of the court for so doing. He gave notices of the sale to every shareholder and indeed requested them to assist him in securing the best price for the properties. Every formality of a public auction was scrupulously observed. No irregularity in the conduct of the sale has been proved. Throughout the proceedings which resulted in the sale, the petitioning creditor as well as some of the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeded upon the footing that he was entitled to sell the properties. There was no objection on the part of the shareholders at any time to his so doing. But even apart from that, we are of opinion that the power of the official liquidator to sell the properties of company cannot in any way be limited or circumscribed by anything found in the articles of association. The main purpose of a winding up of a company is to collect the assets of the company, pay the general body of creditors either in full or pari passu as available assets would justify and distribute the surplus amongst the members of the company. The liquidator's principal duty will, therefore, be to take possession of and protect the assets, to make the requisite lists of contributories and creditors, to have disputed cases adjudicated upon, to realise the assets subject to such control by the court or other authority that may be prescribed in that behalf, and to apply the proceeds in the payment of the company's liabilities and then divide the surplus amongst the contributories and adjust their rights. The duty to collect the assets of the company and to apply them in discharge of its liabilities has been laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the section referred to above, a sale can be effected only after sanction by court does not mean that it is anything but the act of the official liquidator. For, there is a vital distinction between a case where the court itself orders a sale and one where the official liquidator sells the property on sanction by court. In Pearson's case [1872] LR 7 Ch. App. 309 a question arose as to whether a court would have any jurisdiction to order the liquidator in a winding up to consent to compromise with a contributory. Section 160 of the English Act which was similar to section 179 of the Act referred to above empowered the liquidator with the sanction of the court to compromise claims. James L.J. said : "But the court has no more power to compel the liquidator to accept a compromise than to compel an ordinary suitor to take less than is due to him. I am of opinion that the only power is in the liquidator with the sanction of the court, and that there is no power in the court to order a compromise, whether the liquidator recommends it or not." That decision was applied to a case under the Indian Companies Act in Chiraghdin v. Official Liquidator [1939] 9 Comp. Cas. 307 ; ILR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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