9911796707
TMI Blog2004 (11) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... to restrain the respondent No. 1 from parting with the possession of the movable assets auctioned in favour of the respondent No. 7 by order-dated 14.10.2004 in Official Liquidator's Report no. 56 of 2004. D. Any further relief(s) as deemed fit may be granted to the Applicant as according to the applicant, the applicant is offering a substantially higher amount for composite properties of Wood Polymers Limited [hereinafter referred to as 'the Company (in liquidation)']. 2. On 14-10-2004 an order came to be made by this Court in O.L.R. No. 56 of 2004 whereunder sale of all movable assets excluding land, building and records was confirmed in favour of M/s. Sterling Lam Limited (respondent No. 7) for a sum of Rs.178 lacs on the terms and conditions stated in the order. Though the applicant has not made a prayer to set aside the aforestated order before any of the prayers could be granted, if required to be granted, it would be necessary to recall and set aside the order dated 14-10-2004. 3. Mr. Mihir H. Joshi, learned Senior Advocate appearing with Mr. Tanvish U. Bhatt, learned advocate on behalf of the applicant, submitted that the approach of the Court in such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions raised by the applicant the bona fides of the applicant were required to be tested. In this connection he invited attention to the averments made in Paragraph No. 2 of the application as well as Paragraph No. 6 of the rejoinder affidavit to submit that the applicant had made contrary statements in relation to the business carried on by the applicant, the source of knowledge of the applicant and the circumstances went to show that the present application is filed with ulterior motives and with a view to blackmail and harass respondent No. 7. 4.1 Inviting attention to communication dated 18-10-2004 (Annexure-A) it was submitted that on the one hand the applicant was seeking inspection of the unit of the Company (in liquidation) on 20-10-2004 and on the other hand the applicant was already in possession of the order dated 14-10-2004 at 12:03 hrs. on 18-10-2004 itself as could be seen from the computerised copy of the order. Therefore, the applicant was in fact aware that the movable assets of the Company (in liquidation) had already been sold in favour of respondent No. 7 and yet was trying to create evidence by the said communication dated 18-10-2004. That the applicant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat be so, it was not open to the Court to disturb a concluded contract. Inviting attention to the decisions of the Apex Court in: i) Divya Manufacturing Company (P) Ltd. Tirupati Woolen Mills Shramik Sanghaarsha Samity and Anr. v. Union Bank of India and Ors. Official Liquidator Ors : (2000) 6 SCC 69; (ii) Lica (P) Ltd. v. Official Liquidator and Anr. (2000) 6 SCC 79; (iii) Lica (P) Ltd. v. Official Liquidator and Anr. (2000) 6 SCC 82; it was submitted by Mr. Shah that the Apex Court was dealing with cases involving immovable property wherein the circumstances were that either the sale was yet to be confirmed or that the Sale Deed was to be executed or the appeal was pending, coupled with the fact that Condition No. 11 in the said cases permitted the Court to set aside a concluded sale. That in the present case the Court was not required to exercise such jurisdiction in absence of similar condition in the terms and conditions on which the contract was executed by the parties; in other words, no power was reserved with the Court for setting aside a concluded contract. Moreover, the Court had confirmed the sale of movable assets and ownership of property had passed from r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter price if the land was otherwise not having any superstructure or any other encumbrance thereupon. That accordingly the offer was far too less and not attractive enough to be taken into consideration. 6. Mr. Mihir Joshi in rejoinder submitted that the contention regarding letter dated 18-10-2004 being back dated or having been filed later in point of time was not stated by respondent No. 1 - the Official Liquidator and hence, the said aspect should not be a relevant consideration. Responding to the submission regarding the applicant already being in possession of the order dated 14-10-2004 when the aforesaid letter dated 18-10-2004 was addressed to the Official Liquidator, Mr. Joshi submitted that this issue was never raised earlier in point of time, otherwise the applicant would have tendered appropriate reply. In relation to the contention regarding the contradiction about business of the applicant, it was submitted that the applicant was in the business of trading in steel and plant and machinery were definitely such items which would fall within the business of the applicant. The contention regarding source of information about the properties of the Company (in liquidati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded contract by way of auction sale for the purpose of setting aside the same. 8. For the purpose of recalling an order or reviewing an order the jurisdiction that is required to be exercised by the Court has to be on the principles enunciated while exercising jurisdiction under Order 47 Rule 1 of the Code of Civil Procedure, 1908. Order 47 Rule 1 of the Code of Civil Procedure stipulates various contingencies in which an application may be made for review of judgement of this Court. Pre-requisite conditions prescribed in Rule 1 of Order 47 of the Code of Civil Procedure are : [i] On discovery of new and important matter or evidence which after the exercise of due diligence was not within the knowledge or could not be produced at the time when the order was made; OR [ii] On account of some mistake or error apparent on the face of the record; [iii] For any other sufficient reason. If any one condition is shown to exist an order may be taken up for review. The applicant has not been able to show that the present case would fall within the first situation viz. discovery of new and important matter or evidence. Nor can it be stated that there is some mistake or err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any of the advertisements published by the Sale Committee. This becomes important in the context of the averment made by the applicant that The applicant submits that he is in the business of purchase of land, plant machinery of various industries. . A person who is in business would definitely be aware of the advertisements published; may be one set of advertisements may be overlooked by a person; to say that advertisements published thrice were not within the knowledge of the applicant is not believable. In fact the applicant does not even state so. The applicant is absolutely silent as to whether he had seen the advertisements or not. 11. In Paragraph No. 2 of the application, the applicant further states that the applicant came to know from trade circles that properties of the erstwhile Company are to be sold and, therefore, the applicant inquired about the same as no recent advertisement for the same was published in any newspapers. The applicant thereby gives credence to the belief that the applicant was aware that the advertisements had been published in past but no recent advertisement had been published. If that be so, no explanation is forthcoming why the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not enough. There must be adequate material to substantiate such allegation. Further, the objector must show that such material irregularity resulted in substantial injury to the Objector. In absence of such pleading and evidence in support thereof it is not open to set aside an auction sale. (Ref. : Shri Ram Maurya v. Kailash Nath and Ors., AIR 2000 SC 3402 - Shri Ram Maurya v. Kailash Nath and Ors.). 14.2 Other factors which would come into consideration are where the sale is conducted with undue haste without any reserve or upset price being fixed; the valuation itself is suspect and there is inadequate publicity resulting into situation where best possible price was not procured. These factors cumulatively would affect an auction sale and would permit the Court to set aside the same considering the Companies (Court) Rules, 1959. (Ref : AIR 1999 SC 1715 Allahabad Bank etc. etc. v. Bengal Paper Mills Co. Ltd. and Ors.). 14.3 As already stated mere proof of material irregularity and inadequacy of price realized by itself are not sufficient. What the objector has to establish is that not only there was inadequacy of price realized but that, that inadequacy was caused by reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a contract whereby seller transfers or agrees to transfer the property in goods to the buyer for a price; such a contract of sale may be absolute or conditional. Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. Such an agreement to sell becomes a sale when the time elapses or the conditions are fulfilled to which the property in the goods is to be transferred. It follows that until the property in the goods has been transferred from the seller to the buyer there is no sale. The contract of sale remains merely executory till then; and it becomes executed the moment the property has passed to the buyer. 17.2 Section 19 of the Sale of Goods Act provides as to when the property passes. The section recognizes the rule that in case of an agreement of consideration, whether the consideration consists in some actual performance, as the payment of the price, or in a promise, express or implied, the time of the transfer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is possible for the parties, by special agreement to vary some of the rights and obligations arising from such sale i.e. the auction sale under Section 64 wherein certain implications may arise. 17.6 Section 47 of the Sale of Goods Act lays down as to when an unpaid seller of goods has lien over the goods. The unpaid seller of goods who is in possession of the goods is entitled to retain possession of the goods until the buyer makes payment of price, and the circumstances entitling the unpaid seller lien over the goods are as stated in sub-section (1) of Section 47 of the Sale of Goods Act. However, under Section 49 of the Sale of Goods Act situations in which lien gets terminated are provided for. The unpaid seller of goods loses his lien when he delivers the goods and the buyer obtains lawful possession. Hence when the vendor has given the buyer possession under the contract of sale, all his rights in the goods are completely gone; he must recover the price exactly as he would recover any other debt (u), and has no longer any claims on the goods sold superior to those of any other creditor. The delivery and acceptance of possession complete the sale, and give the buyer the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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