MICRONIX INDIA Vs. DISCO ELECTRONICS LTD

JUDGEMENT

(1.) In this case the Official Liquidator haschallenged the sale of certain properties of the company in respectwhereof Official Liquidator had been appointed as the Provisionalliquidator, purported to have been affected by Delhi FinancialCorporation limited (hereinafter referred to as "the DFC") inexercise of its powers under Section 29 of the State Financial Corporations Act.

(2.) After the arguments, I was informed that similar controversyis pending decision by the Hon'ble Supreme Court and I should awaitthe outcome thereof. Now, counsels have pointed out that theHon'ble Supreme Court has since decided the matter in the case ofIndustrial Credit and Investment Corporation of India Ltd. Vs. M/s.Srinivas Agencies & Ors.. reported as 1996 (3) Supreme 400).Mr. Nayar, counsel for the Official Liquidator, concedes that thecontroversy before the Hon'ble Supreme Court was not identicalwith the questions arising in the present case as would 'appear fromthe discussion appearing hereinafter.

(3.) Briefly stating the facts of the case are as under :-The Company "Disco Electronics Ltd." (hereinafter referredto as "DISCO") had created a mortgage in favour of theDelhi Financial Corporation to secure loan facilitiesobtained by it on 20-1-1986. On 4/7-12-1990, theDFC on account of unsatisfactory operation and thedefaults committed by the company recalled the loan.This notice was followed by another notice of 2 9/10/1991 threatening to take possession of theUnit at premises No. A-83, Okhia Industrial Area,Phase-11, New Delhi and the machinery installed atA-84 Okhia Industrial Area, Phase-11, New Delhi. Afterthe DFC had resumed possession under Section 29 ofthe State Financial Corporation Act, the DISCOapproached the DFC with the proposal that it shouldcarry out the sale of the said property and in fact produced an intending purchaser namely M/s. ShivalikTraders for settling dues of the Corporation, but despitethe Corporation having agreed to accommodate DISCOthe said purchaser failed to honour its commitments asa consequence whereof possession of the said property No.A-83 Okhia Industrial Area, Phase II together with themachinery lying at A-84 Okhia Industrial Phase-11 wastaken over by the Corporation on 23-2-1992. DISCOhad undertaken to retain the possession for and onbehalf of the DFC. In other words, DISCO continuedto be in possession, but only as custodian on behalfof the DFC which means that DISCO continued to holdthe property though as agent of the DFC and for andon its behalf. The said properties were advertised forsafe by the DFC on 4-6-1992 .iiid llic sul.c wus conducted in the office of the DFC on 22-6-1992 whenthe highest bid of Rs. 18 lakhs was received. TheDFC called upon DISCO to produce a higher bid ifthey wanted to do so. Thereafter, one Mr. Vinod Guptamade an offer of Rs. 20 lakhs. However, this bidderaftersome time withdrew his offer in view' of the DFChaving received an offer of Rs. 28.5 lakh's on 23-9-1992whieh offer was accepted by the DFC.