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TMI Blog2000 (9) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale of plant, machinery and movable lying at the factory, can the same Court later pass an order for sale of the factory of the company as a 'going concern'. The submission is, by introducing into the sale of the factory as a 'going concern' has in fact, nullified the execution itself. In order to appreciate the controversy we are hereunder giving short essential facts. 3. The appellant-Allahabad Bank the decree-holder is a secured creditor of Rishra Steels Ltd. respondent No. 4 the judgment-debtor. On 19-12-1990 the appellant-Bank filed a suit against the said company represented by the Official Liquidator in the High Court for a decree for Rs. 4,06,90,548 together with interest. On 15-7-1996, a decree was passed by the Calcutta High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the sale on the application of the secured creditor Allahabad Bank, the same must be limited to its security and the order dated 12-12-1997 is modified to the above extent...., At the time of settling the above sale, the question as to whether the suit of the company can be sold as a going concern shall be considered." Thereafter, the High Court through its order dated 23-2-1998 directed the Official Liquidator to publish an advertisement inviting offers for sale of the assets of the company in liquidation as a 'going concern'. The relevant portion of this order is also quoted hereunder: "The Official Liquidator is directed to appoint a valuer in terms of the order dated 12-12-1997 passed by this Court. Such valuation is to be made with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This means, revive the company first to make it operational, re-employ its employees, which would involve huge investment by the prospective buyer, an Herculean task, making execution practically infructuous. 8. On these facts the appellant-bank has filed these appeals against two orders dated 23-2-1998 and 10-7-1998. The learned counsel submits, the Division Bench of the High Court fell in error in not directing plant, machinery and securities to be sold separately. By this vast land and building of the factory would still be left, which would fetch much higher price, which may cover the total balance liabilities of the company in liquidation. On the other hand, selling of the factory as a 'going concern' with a rider to absorb all the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble such company may be brought back as running concern, with hope of its revival. But, if a company has reached a skeleton stage, where its revival is not possible, its assets are sold, to pay back the creditors. In the present case, undisputedly an order of winding up was passed as far back as on 4-6-1990. There is nothing on the record to show even any attempt was made by the judgment-debtor respondent-company for its revival nor there is anything on the record, to show that there exist possibility of its revival. Submission for the appellant-bank in support of sale being as 'going concern' is made under the garb and in the name of 'workers' to resist the present execution. 11. The learned counsel for the appellant-bank strongly relies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 'going concern' is not sustainable. 12. The learned counsel for the company in liquidation and for the employees union, representing workers submits, for a compassionate consideration, in the interest of workers; as a last resort, attempt be made, if possible, to get a buyer who may take over the company as a 'going concern' and be ready to pay the price to satisfy the decree and pay the rest of the liability in a phased manner after the production starts. 13. When indisputably the order of winding up made on 4-6-1990 had become final and company has become non-functional for long, even the BIFR could not come to its rescue and the attempt of the workers union to resuscitate the company by getting a committee constituted for management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In case, it is not concluded within this period, the order of the High Court directing the sale of the company as a 'going concern' shall stand set aside. The Official Liquidator will then proceed to sell the assets of the company first by selling the plant, machinery and other movable assets and then the other assets in such a manner as to fetch the maximum price, keeping the interest of all other creditors. Out of the aforesaid proceeds, first the decree in favour of the appellant-bank should be satisfied and then to proceed to distribute the balance to other creditors in accordance with law. Accordingly the aforesaid two orders of the High Court dated 23-2-1998 and 10-7-1998 stand modified to the extent we have passed this order. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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