Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Companies Act 1956 Rule 273 1959 Section 447/Companies (Court) Rules |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Companies Act, 1956 (1 of 1956) |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Companies Act, 1956/Companies (Court) Rules, 1959 : Section 447/Rule 273 - Winding up ordered by a Company Judge - Official Liquidator ordered to auction assets and properties of the company after advertising in newspapers - Assets and properties valued at Rs. 1.5 Crores and sold at the said value - 75% of the price to be paid in instalments - Sale order challenged in appeal before Division Bench on the ground of irregularities in sale - Contention that valuation report of the assets of the company was not disclosed to the appellants - Lease hold land in company's possession had not been considered - Advertisements for sale should have been given all over India - Assets of the company had become the securities of the appellant banks - Company Judge had regard only to the prospect of re-employment of 1700 ex-employees - No enquiry made as to how the ex-employees of the company-would be re-employed - Appeal dismissed by the Division Bench - However, it held that Single Judge passed the order in great haste without proper consideration - On appeal, Held : Upon liquidation, the assets and properties of the company in liquidation vest in the Official Liquidator for the benefit of its creditors - Interests of creditors of the company are paramount - Obligation of the High Court to ensure that best possible price is realised - Division Bench of the High Court erred by turning blind eye to the defects noted by it in the order of sale - Official Liquidator ordered to forthwith take possession of the assets and properties covered by the sale order - Said assets and properties to be resold after fresh valuation and due advertisements - Respondent No. 2 to be repaid the purchase price of Rs. 2 Crores - Lease in favour of Respondent No. 2 also set aside. Banking Practice - Securities - Banks not requiring sale proceeds to be kept apart to the credit of their suits - Whether amounts to giving up of securities - Held : This question cannot be answered in the absence of full record as it has arisen incidentally in appeals - Left to be answered by the High Court on appropriate applications by the banks. |
Judge | Honble Mr. Justice S.P. Bharucha |
Neutral Citation | 1999 INSC 194 |
Petitioner | Allahabad Bank Etc. Etc. |
Respondent | Bengal Paper Mills Co. Ltd. And Ors. |
SCR | [1999] 2 S.C.R. 750 |
Judgement Date | 1999-04-20 |
Case Number | 4191 |
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