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TMI Blog1998 (11) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... and 8th February, 1995 the Official Liquidator issued advertisements for sale of the chemicals describing them as the assets of the company. The terms and conditions of the sale provided that the chemicals were being sold on 'as is where is basis'. The offers were to be accompanied with 20 per cent of the bid amount. The successful bidder was to deposit the balance purchase price within a period of 90 days from the date of sale by the Court. Upon failure to make payment of the balance price the earnest money was to stand forfeited and the chemicals sold at the risk and cost of the defaulting bidder. 3.The Subhyog Chemical Industries Limited (hereafter referred to as purchaser) was declared as the highest bidder for the chemicals at a price of Rs. 64.25 lakh. Its offer was accepted by order dated 6th April, 1995 and it was directed to make payment of the balance consideration money within the time as prescribed by the Sale Notice and/or the terms and conditions of sale. It was made clear by the order dated 6-4-1995 that delivery was to be given only after the payment of the entire balance purchase price. A sum of Rs. 12.20 lakh had been paid till that date. 4.The purchaser, how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3rd June, 1995, 28th June, 1995 and 5th July, 1995 on September 1995. An order was passed on 28th September, 1995 by the Appeal Court directing the Official Liquidator to retain the sale proceeds of the assets of the company in liquidation until further orders of this Court. The stay application was disposed of on 8th January, 1996 by directing the Official Liquidator to set apart the amount received by it from the purchaser in a separate account. After deducting the amount paid by the purchaser, the balance amount realised by the Official Liquidator from the sale of the other assets of the company was directed to be distributed amongst the creditors of the company. 9.In the meanwhile the purchaser had made an application before the learned Single Judge for cancellation of the sale. The application has since been dismissed. 10.Before us it was contended by the Customs Authorities that by virtue of the provisions of the Customs Act, 1962 the goods could not have been removed from the warehouse at all without payment of the import duty and the interest accumulated thereon. It is said that any such removal was in centravention of law. It is further stated that the customs had a st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and all penalties, rent, interest and other charges payable in respect of such goods have been paid; and (c) an order for clearance of such goods for home consumption has been made by the proper officer." 15.It is clear, therefore, from the wording of the Section that the goods cannot be cleared by reason of the statutory embargo on the payment of duty, interest, rent etc. 16.The provision contained in Section 68 is reinforced by Sections 71 and 72 of the 1962 Act. Section 71 provides that goods are not to be taken out of the warehouse except as provided by the Act. Section 72 provides : In any of the following cases, that is to say, - ********** where any warehoused goods have not been removed from a warehouse at the expiration of the period during which such goods are permitted under Section 61 to remain in a warehouse; ***************************** the proper officer may demand, and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods." 17.In default the Customs Authorities have the right to detain and sell the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Customs Duties and interest etc. The provisions of Sections 529 and 530A of the Companies Act, 1956 apply to situations where the claim of creditors in respect of the sale proceeds of the assets of the Company sold in liquidation are to be determined. The Customs Authorities claim to the chemicals in question, in which the Customs Authorities had a statutory right of detention and confiscation, had to be met before the chemicals could be validly sold as assets of the company in liquidation. The claim of the Customs Authorities would, therefore, stand outside proceedings under Sections 529, 529A and 530 of the 1956 Act. 24.Regarding the claim of interest by the Customs Authorities, Section 61(2) of the Customs Act, 1962 provides that warehoused goods may be kept in the warehouse for one year without payment of duty. Thereafter if the goods continue to remain in the warehouse interest would be payable at such rate as is specified in Section 47 on the amount of duty on the warehoused goods for the period from the expiry of the period of one year till the date of the clearance of the goods from the warehouse. The claim for interest is also covered by the provisions of Sections 68 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mely, the name of the Company, Cause Title, date of the order as well as the name of the Judge passing the order. 30.The explanation given for non-drawing up of the order and non- issuance of certified copy is unacceptable. Be that as it may, it is clear that the point of limitation, taken by the respondent purchaser, does not survive and is, accordingly, rejected. 31.In the circumstances, the appeal must be allowed. However, it must be stated that the appeal from the order dated 28th April, 1995 is misconceived as it did not directly affect the Customs Authorities. The orders dated 23rd June, 1995 and 28th June, 1995 have unfortunately been already given effect to. Nevertheless, the Customs Authorities cannot be deprived of their rights merely because the sale of the warehoused goods has taken place without payment of duty or their statutory claims. The learned Judge erred in not passing any order on 5th July, 1995 permitting the Customs Authorities at least to realise their statutory dues and thus regularize the sale ex post facto which was otherwise held in contravention of the clear provisions of statute. 32.The Official Liquidator will, accordingly, make over to the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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