JAINSONS EXPORTS INDIA Vs. BINATONE ELECTRONICS LIMITED

JUDGEMENT

(1.) In this case, the property of the company under liquidation at Bombay was sought to be sold by public auction and such sale being subject to confirmation by this court was confirmed on 25.5.1993 after the court had heard the Official Liquidator and Mr. B.N.Nayar, who was specially appointed to assist the court to ensure that everything had been done and the maximum price possible under the circumstances had been obtained at such auction. Subsequently, at the instance of the Official Liquidator and certain parties interested in bidding, the court stayed handing over of the possession of the property to the auction purchaser pending further hearing. The court also wanted to be satisfied about the effect of the non-compliance of Rule 139 of the Company (Court) Rules.

(2.) On a perusal of the record of this case I find that this company was wound up on the recommendation of the Board of Industrial and Financial Reconstruction under Sick Industries (Special Provisions) Act under Section 20(2) of the said Act and not on a petition of a creditor. Since the company was not wound up on the petition of a creditor, the provisions of Rule 139 of the Company (Court) Rules are not attracted in the present case and that the contention raised by one of the parties, namely, Mr. Basant Kumar Pachisia is absolutely unfounded.

(3.) However, there are certain other facts which have come to light in the course of the arguments which have important bearing on the outcome of this case. One of the important considerations which weighed with me at that time was what was submitted by Mr.B.N.Nayar before me with regard to the highest bid and also the Income-tax authorities having assessed the market value of the premises at Rs.11,07,000.00. Now Mr. Nayar states that there is no such valuation report forthcoming on record and that he had made this submission only on what was told to him and without himself verifying this fact from the record. I have checked up with the Liquidator who confir that no such valuation report of the Income-tax authorities is forthcoming on record. Mr. Nayar further states that even original record was not made available to him by the Liquidator. It is very unfortunate that Mr. Nayar did not verify the facts from the records of the Official Liquidator before making statement before the Court recommending acceptance of the bid thereby defeating the very purpose of his appointment.