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TMI Blog1963 (1) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the court was in the circumstances, a judicial order and not an administrative one and was, therefore, not inherently incapable of being brought up in appeal. Appeal dismissed. - 214 OF 1960 - - - Dated:- 24-1-1963 - S.J. IMAM, K. SUBBA RAO, N. RAJAGOPALA AYYANGAR AND J.R. MUDHOLKAR, JJ. S.T. Desai, Himmatsinghka and B.P. Maheshwari for the Appellant. N.C. Chatterjee, B.M. Bagaria, M. V, Goswami and B.C. Misra for the Respondent. JUDGMENT Ayyangar, J. The principal point raised for consideration in this appeal by special leave relates to the correctness and legality of an order by a Division Bench of the Calcutta High Court refusing to confirm a sale by the liquidators of the assets of a company which is being wound up. The company in question, the Luxmi Spinning Weaving Mills Ltd., a company incorporated under the Indian Companies Act, was carrying on business at Calcutta. On a petition of the first respondent, Shankarlal Poddar, made to the High Court of Calcutta, this company was ordered to be wound up compulsorily by order dated August 22, 1955. But before this order was-passed, certain matters had transpired to which it is nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sell the properties free of all encumbrances, the sale proceeds realised being held in court to answer the claims of the creditors according to such priorities as might be determined by the court. The sale by public auction thus directed was duly advertised to be held on September 8, 1956, at 2 p.m. The conditions subject to which the properties were to be sold which were approved by the court included, inter alia , (1) that the sale was subject to a reserve price to be determined by a valuer and surveyor which however was not to be made known to the bidders but had to be kept in a sealed cover until the bidding was over, (2) the sale was subject to confirmation by the court, (3) that it was in the discretion of the liquidators to accept or reject any bid, (4) as far as possible the highest bid was to be accepted provided the liquidators considered that the bid was for a sufficient amount, (5) immediately on acceptance of the bid by liquidator the bidder was required to deposit 25 per cent, of the amount of the bid in cash " in default whereof the liquidators were at party to put up the property again for sale" (6) the purchaser was to pay i.e ., balance of purchase moneys with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eem lit and proper. The summons was opposed by the first respondent and the main point urged by him was that when Nandlal Agarwalla's bid was accepted by the joint liquidators, several others who had come to bid for the property left the auction room under the impression that sale was going through and that the subsequent sale at which the appellant was the highest bidder was not such as could be confirmed by the court. The summons was heard by the company judge P.B. Mukharji J. and the learned judge passed an order acceding to the prayer of the liquidators to confirm the sale. Thereupon the first respondent filed an appeal against the order confirming the sale and also applied for the stay of delivery of possession of the properties of the company to the appellant. In the application for stay the appellate court passed an order in these terms : "On Bansidhar Shankarlal giving an undertaking to this court to purchase the property for Rs. 3,35,000 should the appeal be allowed and on Bansidhar Shankarlal depositing with their solicitors Rs. 16,000 to be held by the solicitors free from lien and subject to further order of this court to abide by the result of the suit challenging th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be open to appeal under clause 15 of the Letters Patent of the High Court, ( b ) if the above were answered in the affirmative, whether independently of section 202 the order of the Company Judge in this case amounted to a judgment within clause 15 of the Letters Patent, and (3) whether the appellate court acted improperly in interfering with the order of the learned company judge. We shall deal with these points in that order. (1) First as to the scheme of the relevant provisions under the Companies Act. Section 179 of the Companies Act, 1913, specifies the powers of the official liquidator. It enacts, to quote only the words material for the present appeal : "179. Powers of official liquidator. The official liquidator shall have power, with the sanction of the court, to do the following things : . . . ( c ) to sell the immovable and movable property of the company by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels." Though section 180 which reads : " 180. Discretion of official liquidator. The court may provide by any order that the official liquidator may exercise any of the above p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. For instance, the determination of amounts due to the company from its debtors which is also part of the process of the realisation of the assets of the company is a matter which arises in the course of the administration. It does not on that account follow that the determination of the particular amount due from a debtor who is brought before the court is an administrative order. It is perhaps not possible to formulate a definition which would satisfactorily distinguish, in this context, between an administrative and a judicial order. That the power is entrusted to or wielded by a person who functions as a court is not decisive of the question whether the act or decision is administrative or judicial. But we conceive that an administrative order would be one which is directed to the regulation or supervision of matters as distinguished from an order which decides the rights of parties Dr. confers or refuses to confer rights to property which are the subject of adjudication before the court. One of the tests would be whether a matter which involves the exercise of discretion is left for the decision of the authority, particularly if that authority were a court, and if the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er no appeal lay from it under section 202 of the Indian Companies Act unless the order amounted to a judgment within clause 15 of the Letters Patent of the Calcutta High Court. Section 202 runs as follows : "202. Appeals from orders. Re-hearings of, and appeals from, any order or decision made or given in the matter of the winding up of a company by the court may be had in the same manner and subject to the same conditions in and subject to which appeals may be had from any order or decision of the same court in cases within its ordinary jurisdiction." It was submitted that assuming the order of the company judge was "an order or decision made or given in the matter of the winding up of a company by the court" the last words of the section " subject to the same conditions in and subject to which appeals may be had from any order or decision of the same court in cases within its ordinary jurisdiction" restrict ed the right of appeal conferred by the first limb of the section to those which might be preferred under clause 15 of the Letters Patent in the case of a judgment of a single judge of the High Court. In support of this sub mission learned counsel relied on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal lay. It was urged that under section 202 the right of appeal conferred was subject to "the same conditions" to which appeals might be had from the decision of the court in cases within its ordinary jurisdiction and since the said condition was not fulfilled the appeal was incompetent. Chagla C.J. repelled this contention and pointed out that the courts which dealt with winding up petitions and to whose orders section 202 applied were not merely the High Courts bat also the District Courts, If the construction of the section]1 oh whose correctness the preliminary objection was based were upheld it would .mean that \n the case of -an order made by a District Court the appeal-ability of that order would be dependent on its satisfying the conditions of appeal for "decisions" laid down under the Civil Procedure Code. Under the Code "orders or decisions" are classified into two heads decrees and order. Whereas an appeal lies by virtue of section 96 of the Code against every decree which is defined in section 2 of the Code, only certain types of orders under particular provisions of the Code which are listed in section 104 are capable of appeal and none others. It was not in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n "subject to the conditions'* occurring in section 202 and does not take into account the context in which section 202 was designed to operate and particularly the fact that more than one grade of court each governed by different rules as to the nature of the decision which would enable an appeal to be preferred could be vested with jurisdiction under the Act. When by the proviso to section 3 of the Indian Companies Act, 1913, the Indian legislature enabled jurisdiction to be vested in District Courts so as to be constituted the "court having jurisdiction under the Act", knowledge must be imported to it that the District Courts and the High Courts functioned under different statutory provisions as regards rights of appeal from their orders and decisions. Besides, it would also be fair to presume that they intended to prescribe a uniform law as regards the substantive right of appeal conferred by section 202. It could not therefore be that an identical order if passed by one class of "court having jurisdiction under the Act" would be final, but that if passed by another court vested with identical powers and jurisdiction would be subject to an appeal. There is also one another as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But that Letters Patent is not immutable and has been the subject of several alterations. Thus when the Companies Act was passed in 1913, an appeal lay from every " judgment" of a single judge of the High Court. But in March, 1919, it was amended so as to exclude the rights of appeal from judgment passed in exercise of revisional jurisdiction and in exercise of the power of superintendence under section 107 of the Government of India Act, 1915. There can be no doubt either that the exercise of revisional or supervisory jurisdiction is as much " ordinary jurisdiction " of the High Court as its original or appellate jurisdiction and it cannot be that there has been any alteration in the law as regards the appealability of decisions of a High Court under section 202 of the Companies Act by reason of the amendment of the Letters Patent. Again, the Letters Patent were amended in January, 1928, when appeals against decisions in second appeals were made subject to the grant of leave by judges rendering such decisions. If the decision in a second appeal were in the exercise of "ordinary jurisdiction", and there can be no controversy about it, then the construction of section 202 of the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garam Civil Appeal No. 25 of 1961 (Not reported), where, after setting out the cleavage of views on the question by the several High Courts, the point as to the proper construction of the word was left open for future decision when the occasion required. We consider that that occasion has not arisen before us either since in view of the construction which we have adopted of section 202 of the Indian Companies Act the scope of the expression "judgment" in the Letters Patent does not call for examination or final decision. The next contention put forward was this. The learned company judge had a discretion to confirm or not to confirm the sale. In order that the discretion might be properly exercised the official liquidators had placed every material fact in the Master's summons which they filed and every one of those facts had been considered by the learned judge. If, after considering those facts, the learned judge thought that it was a fit case in which the sale could be confirmed it was not open to an appellate court to interfere with that order merely because on its appreciation of the facts it would have refused confirmation and directed a fresh sale. Learned counsel further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of them therefore left the place and went away. The bidding list, which is annexure "A" to the petition of the liquidators, showed that New India Transport Co., which had bid up to Rs. 2,55,000, Babulal Bhagwandas who bid up to Rs. 2,75,000 and Chabildas Agarwal who went up to Rs. 2,85,000 were not there when the second auction was held. The result therefore was that when after waiting for about 20 minutes the liquidators continued the auction several had left and the appellant was able to become the highest bidder for the price of Rs. 2,25,000. This feature of the case was missed by the learned company, judge and forms the basis of the decision of the Division Bench. We would go further and add that on a proper construction of condition 5 the liquidators were not entitled to proceed with the sale in the circumstances that happened because of the interval of time, they granted to Nandlal to make the deposit which gave the impression to those who gathered there that there would be no further auction on the same date at which they were entitled to bid Learned counsel for the appellant referred us to the fact that one S. K. Chakrabarti who in the first auction had bid up to Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the appellant taking the property for Rs. 3-35.000 but that surely cannot give the appellants any legal right to insist that the property be sold to them. It was a condition for the grant as of the indulgence of stay and by no stretch of language could that be read implying that the appellants had a right to purchase the property. It is true that the appellants have made a grievance about this matter in the application for leave to this court as well as in the statement of the case but that hardly improves the position. This matter may also be looked at from a slightly different point of view. Immediately Nandlal failed to turn upon September 8, 1956, the liquidators enquired of the appellants whether they were willing that their penultimate bid be treated as the highest bid and they be declared purchases. This offer was refused as Apparently they were satisfied that they would be able to get the property for a much less sum. Thereafter the liquidators took out a Master's summons seeking sanction of the court for the sale to them for Rs. 2,25,000. The appellants supported that application. In other words, they wanted that the court should confirm the sale to them for Rs. 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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