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TMI Blog1978 (1) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ch ha preceded that Act as the Management Ordinance. The Sick Textile Undertakings (Nationalisation) Act 1974 will be referred to as the Nationalisation Act. The point involved lies within a very narrow compass and the High Court appears to have travelled unnecessarily into the wealth of details regarding the history of the proceedings and has entered into meticulous detail$ regarding the provisions of the Acts concerned although for the purposes of this case it was necessary to refer only to a few provisions of the Management Act and the Nationalisation Act. In order to appreciate the point in controversy in the instant case it may be'necessary to, give a brief survey of, the facts leading up to the impugned order. The appellant M.S.T.C. had taken a lease of the original company known as. R.B.. Bansilal Abhir Chund Spinning and Weaving Mills (P) Ltd. Hingangbat (Maharashtra). By an order dated 1. 10. 1965 the said company was ordered to be wound up and an Official Liquidator of the company was appointed. On 3rd February, 1967 a lease for the running of the mill was taken by the Government of Maharashtra which was handed over to M.S.T.C. for running the mill on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as furniture, duplicating machine and machinery scrap etc. The Court directed notice to the Additional Government Pleader on the aforesaid report of the Official Liquidator. On 30th April, 1974 the appellant M.S.T.C. appeared and wanted time for filing objections but no objections were filed and the Company Judge by its order dated 25th June, 1974 directed the Official Liquidator to sell the aforementioned assets and realise the price thereon. No appeal against this order was filed by the appellant M.S.T.C. On the 28th June, 1974 certain directions were sought by the Official Liquidator for approving the proposed purchasers which was granted. The items mentioned above were sold for ₹ 72,501/-. On 3-7-74 the Court accepted the offer of respondents 2 and 3 and 9 days later on 12-7- 1974 the Court granted permission for removal of the materials by the purchasers, but unfortunately because of some labour trouble the materials could not be taken physical possession of by the purchasers. The appellant M.S.T.C. filed an appeal before the Division Bench against the order of the Court directing the sale, of the articles which was however dismissed by the Division Bench of the Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quidation proceeding to continue it only meant that the proceedings should continue in accordance with law and if the law enjoined any condition the same must be complied with. In view of the provisions of section 8 of the Management Act the consent of the Central Government was necessary, so the order of this Court would be interpreted as meaning that the proceedings could continue after the Official Liquidator obtained the consent of the Central Government under section 8 of the Management Act. The order passed by this Court did not give any free licence to the parties to act in disobedience of the mandatory provisions of the Act and continue the proceedings without complying with the conditions enjoined by section 8 of the Management Act. In these circumstances, therefore, the inference is irresistible that without the consent of the Central Government the liquidation proceedings could not continue and the company Judge was not legally justified in ordering the sale of the moveables without obtaining the sanction of the Central at Government. It was however suggested on behalf of the respondents that section 8 would have no application to the facts of the present case inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Art after being passed would, by virtue, of its statutory fiction, take effect from the 1st day of April, 1974 and all proceedings taken after this day without the permission of the Central ,Government would become void ab-initio. The High Court seems to have explained away this aspect of the matter on the ground that as the Nationalisation Act was in fact passed after the Court had (ranted permission to sell, it could not affect the sale at all. We are of the opinion that the High Court was in error in not giving effect to the statutory fiction contained in section 2(1) (a) of the Nationalisation Act. In the case of East End Dwellings Co. Ltd. v. Finsbury Borough ,Council([1952] A.C. 109) Lord Asquith observed as follows :- If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it......... Tile Statute says that you must imagine a; certain state of affairs it does not say that having done so, you must cause or permit your imagination to boggle when it come ..... X X X X Extracts X X X X X X X X Extracts X X X X
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