9911796707
TMI Blog2023 (7) TMI 1247X X X X Extracts X X X X X X X X Extracts X X X X ..... d 25 April, 1990 renders the sale a nullity. On a plain reading of section 54 of the Transfer of Property Act, 1882, the time of payment of price is not necessarily a sine qua non to the completion of the sale. However, the order dated 25 April, 1990 provided for a stipulated time period for payment which assumes significance in cases of sale by Courts. The exercise of any discretion must be in good faith, fairly, for the purpose for which the power is being conferred and without exceeding the limits of such power. No discretion should be legally unfettered. The exercise of any discretion cannot be arbitrary, vague and fanciful; but legal, regular and according to reason. The Rule of Law requires that no discretion should be unconstrained so as to be potentially arbitrary - Section 457 of the Companies Act, 1956 read with Rule 272 of the Company Court Rules, 1959, govern sales by the Official Liquidator. The duty of the Company Court while conducting a sale under Rule 272 is a more onerous task than an ordinary sale conducted by Court in executing a decree. In a sale by the Company Court, the Court holds a fiduciary duty position protecting the interests of all stakeholders. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses Nos. 232, 232/2, 235, 237, 239, 242, 243 and 244 Picnic Garden Road, Kolkata to the respondent; (d) The respondent be directed to forthwith execute and register the Deed of Conveyance in respect of premises Nos. 232, 232/2, 235, 237, 239, 242, 243 and 244 Picnic Garden Road, Kolkata in favour of the applicant as per the draft Deed submitted by the respondent simultaneously with receipt of the balance sum of Rs. 17,25,000/-; (e) The Registrar of Assurances, Kolkata be directed to assess the stamp duty and registration fees payable for registration of the Deed of Conveyance in respect of premises Nos. 232, 232/2, 235, 237, 239, 242, 243 and 244 Picnic Garden Road, Kolkata in favour of the applicant on the basis of the consideration amount of Rs. 57,50,000/- as the sale was made by the Hon ble Court after publication of notice of sale by public auction in the newspapers; (f) Leave be granted to the applicant to deal with and/or dispose of premises Nos. 232, 232/2, 235, 237, 239, 242, 243 and 244 Picnic Garden Road, Kolkata or any part thereof in the manner the applicant deems fit and proper; (g) Ad interim orders in terms of prayers above; (h) Such fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh offered Rs. 55 lacs on behalf of his client, has instructions not to proceed any further in the matter of bidding. In that view of the matter, the sale in favour of the concern named above at the above price is confirmed. Mr. Chatterjee s client has handed over to the Official Liquidator in Court today cheques for Rs. 2,30,000/- as also banker s cheques for Rs. 3,45,000/- totalling Rs. 5,75,000/-. The Official Liquidator is directed to encash the same forthwith. The balance amount of the purchase price, viz., Rs. 51,75,000/- shall be paid by the purchaser by quarterly instalments within a period of 18 months from date. The Official Liquidator, however, is directed to pay 50% of the amounts received by his immediately on encashment thereof to Mr. Sen Barat s client and retain the balance 50% until further orders of this Court. The Official Liquidator shall make over possession of the premises in question to the purchaser immediately on payment of 50% of the total purchase price by the purchaser, but the Official Liquidator shall keep one guard posted at the premises until the entire purchase price is paid. The salary or monthly emoluments of the guard, however, shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or acquisition of Premises No. 232 232/2 Picnic Garden Road. Significantly, the order records that the applicant is to be treated as a person having an interest in the land and in the compensation in respect of the acquisition proceedings. 10. It is contended on behalf of the applicant that a sum of Rs. 40,25,000/- has been paid to the respondent in terms of order dated 25 April, 1990 and only the balance consideration of Rs. 17,25,000/- remains unpaid. It is further contended that the unauthorised occupants who were directed to be removed from the premises have not yet been removed. The passage of 20 feet from the front portion of the main road to enable entry of vehicles into the premises has also not been cleared. It is also contended that diverse orders recognize the applicant to be the lawful owner of the premises and the sale in respect of the entirety of the premises stood confirmed in favour of the applicant in terms of the order dated 25 April, 1990. A Status Report dated 30 November, 2022 filed by the Official Liquidator also records the applicant to be the lawful owner of the premises. On the basis of the aforesaid orders and admissions made therein, the applicant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e owner of the premises. The actual physical possession of the premises has also been handed over to the applicant. The shallow pond has also been filled up. The applicant has also received the entire compensation alongwith interest in respect of acquisition proceedings for a portion of the premises. 14. Order XXI Rule 85 of the Code of Civil Procedure, 1908 provides as follows: Order XXI 85. Time for payment in full of purchase-money. The full amount of purchase money payable shall be paid by the purchaser into Court before the Court closes on the fifteenth day from the sale of the property: Provided, that, in calculating the amount to be so paid into Court, the purchaser shall have the advantage of any set-off to which he may be entitled under Rule 72. 15. Rule 272 of the Companies Court Rules 1959 reads as follows: Sale to be subject to sanction and to confirmation by Court - Unless the Court otherwise orders, no property belonging to company which is being wound-up by the Court shall be sold by the Official Liquidator without the previous sanction of the Court, and every sale shall be subject to confirmation by the Court. 16. In terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Tyrants; it is always unknown; it is different in different Men; it is causal, and depends on Constitution, Temper, and Passion. In the best it is often-times Caprice, in the worst it is every Vice, Folly, and Passion to which human Nature is liable. [Doe d. Hindson vs. Kersey (1680) 8 How St. Tr 57] 20. The exercise of any discretion must be in good faith, fairly, for the purpose for which the power is being conferred and without exceeding the limits of such power. No discretion should be legally unfettered. The exercise of any discretion cannot be arbitrary, vague and fanciful; but legal, regular and according to reason. The Rule of Law requires that no discretion should be unconstrained so as to be potentially arbitrary. [Tom Bingham, The Rule of Law, Chapter 4]. 21. Section 457 of the Companies Act, 1956 read with Rule 272 of the Company Court Rules, 1959, govern sales by the Official Liquidator. The duty of the Company Court while conducting a sale under Rule 272 is a more onerous task than an ordinary sale conducted by Court in executing a decree. In a sale by the Company Court, the Court holds a fiduciary duty position protecting the interests of all stakeholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of having withdrawn the entire compensation money in the acquisition proceedings. In such circumstances, the contention of the applicant that the order dated 25 April, 1990 gives an indefeasible right of ownership to the applicant as auction purchaser is rejected. On the contrary, in view of the escalated market price and the subsequent conduct of the applicant, it would be a pernicious exercise of discretion to permit any of the prayers as prayed for in this application. In such circumstances, this Court cannot remain blind to an obvious and manifest illegality committed in conducting the sale. 25. On the point of maintainability raised by the Official Liquidator, I find no substance in the contention that the application is not maintainable since there is a permanent stay of the winding up proceedings. The order of permanent stay does not completely obliterate the winding up order. Company petitions even when dismissed on merit are traditionally not regarded as dismissed or disposed of but as permanently stayed. There is a history of more than a century which goes behind such recording. ( Asset Reconstruction Company (India) Ltd. vs. M/s. Bengal Shelter Housing Development ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
