9911796707
TMI Blog1994 (6) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... The company took a loan of Rs. 24,50,000 from the Corporation in the year 1975 and in order to secure this amount a mortgage deed was executed by the company. Its plant and machinery along with the building and land stood mortgaged with the Corporation. Three directors of the company including Shri Pardeep Gupta also executed several personal guarantees in favour of the Corporation. The mortgage deed was registered on 5-3-1975, and the first charge of the Corporation over the properties of the company was registered with the Registrar of Companies. The company defaulted in the repayment of the loan and interest due thereon as a result whereof the Corporation filed a petition before the District Judge, Sonepat under section 31 of the State Financial Corporations Act, 1951 ( 1951 Act for brevity), for an order for the recovery of Rs. 26,41,992.77 with future interest. The petition was allowed by the District Judge on 27-2-1980, and the Corporation was held entitled to recover the aforesaid amount with future interest at 13.5 per cent by putting the mortgaged properties to sale. It is the common case of the parties that the Corporation made several attempts to sell the property in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale proceeds thereof against the dues of the Corporation. The petition was allowed by the then learned company judge on 26-5-1989, when the following order was passed: "This application is ordered as prayed. The auction be conducted through court auctioneer after publication in the Daily Tribune and Dainik Tribune." 5. The aforesaid petition was purportedly filed under section 446 of the Act though counsel for the parties are agreed that permission of this court for the sale of properties was not necessary under the said section but it was required under section 537 of the Act. The order granting permission to the Corporation to sell the properties would, therefore, be deemed to be one under section 537 because a mere wrong mention of the section in the petition will make no difference when the power to grant permission vested in this court. 6. After obtaining permission the Corporation sold the properties on 24-7-1989, to one Shri D.R. Wadhwa ( the auction purchaser ) for a sum of Rs. 38,40,000. The sale is said to have been conducted after giving wide publicity but admittedly the auction was held by the Corporation itself and the property was not sold through a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties are agreed that annexures P-9 and P-10 be quashed and a direction be issued that the petitioner should pay the amount in terms of the auction held on 24-7-1989. Order accordingly. The writ petition is disposed of in the aforesaid terms. Sd.Sd. (G.C. Mital)(Amarjeet Chaudhary)." 8. An application for recalling this order is said to be pending before Amarjeet Chaudhary, J. 9. When all this had happened, the official liquidator on behalf of the company filed the present petition on 12-5-1993 under sections 456, 468 and 477 of the Act, read with rule 9 of the Companies (Court) Rules, 1959. The Corporation and Shri Pardeep Gupta, ex-managing director of the company were impleaded as respondents. The prayer made in the petition is that the respondents be summoned, examined and directed to hand over the properties of the company to the official liquidator. By an order dated 3-6-1993, passed in Company Application No. 173 of 1993 the auction purchaser was impleaded as a respondent. During the pendency of this petition Shri Pardeep Gupta also filed Company Petition No. 220 of 1993 with a prayer that this court should take into its actual possession the properties of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritten statement filed by the auction purchaser it is stated that the auction was conducted after giving wide publicity by way of advertisement in the leading newspapers and that the official liquidator and the representatives of the City Bank and the Punjab and Sind Bank were associated with the sale proceedings. These facts have not been controverted by the official liquidator. Moreover, from the records of the Corporation it is clear that the notice regarding sale was published in the Tribune, Indian Express, Hindustan Times and the Punjab Kesri, Delhi and Jalandhar editions and the notices were published through View Point Advertisers. It is of course, true that the sale was not held through the court auctioneer as was directed by this court while granting permission for the sale. Does it mean that the sale is void or is it a mere irregularity. Before seeking leave of this court, the Corporation had taken possession of the properties of the company under section 29(1) of the 1951 Act and it, therefore, became its owner. The sale made by it was like a sale by any owner of his property and was not a court sale governed by the provisions of Order 21 of the Code of Civil Proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no merit in the second contention either. It has already been noticed earlier that the Corporation filed an application under section 446 and obtained leave of this court to sell the properties. Leave was not required under this section but the same was necessary under section 537. Sanction granted by this court will be deemed to have been granted under the said section and mere mention of a wrong section in the application cannot invalidate the sale proceedings. 17. As regards the third contention, Mr. Chhibbar has tried to raise a suspicion about the conduct of the Corporation, but whatever may be said in this regard, it cannot be held that any fraud has been committed. After seeking permission from this court for the sale of properties the Corporation moved an application informing the company court about the sale. There was no need for the Corporation to file such an application. However, when it came up before the then learned company judge it was dismissed as infructuous after noticing that the sale had not been effected in terms of the condition imposed in the order dated 26-5-1989. The Corporation read this order to mean that the court had not approved the sale and acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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