E RANGARAJULU NAIDU Vs. MADURA SRINIVASA MILLS LTD

JUDGEMENT

(1.) THIS appeal which is filed under Section 483 of the Indian Companies Act, 1956, by certain share-holders of the Madura Srinivasa Mills Ltd. , now under liquidation, concerns the correctness of the order passed by the District Judge at Madurai, rejecting an application for review of an earlier order confirming a sale held by the official Liquidator and for certain other reliefs. The properties Sold consisted of 2420 acres of land belonging in absolute right to the company of another 2-30 acres of land together with certain buildings thereon over which it had only a mortgage right, and a leasehold right in a small extent of lands. The company was directed to be wound up by an order of this Court dated 26th September 1955. By the same order, further proceedings in winding up ot the company were transferred to the District Court at Madurai. The Official Receiver, Madurai, who was later appointed Official Liquidator, was given a direction by the District Court to sell the properties. The sale was originally held on 1-8-1956. The highest bid recorded was rs. 1,21,000. On being moved by the petitioning creditor the District Judge directed the continuance of the sale till 13-8-1956 and for accepting the highest bid after obtaining the orders of Court. The highest bid then received was a sum of rs. 1,26,000, from the third respondent, the Madurai District Wholesale Cooperative-Stores Ltd. This offer was however not accepted by the Court. In the fresh sale that was held on 10-12-1956 which admittedly was conducted after due publicity, individual notices having been given to all the share-holders, the third respondent again became the highest bidder for a sum of Rs. 1,30,000. There was an attempt to have that sale set aside by a share-holder, who was also a director of company in C. M. P. No. 29 of 1957. The learned District Judge found that the price obtained at the sale was a proper one. There being no challenge of the sale on any ground of irregularity in regard to its publication etc. , he rejected the application and confirmed the sale. This was on 16-4-1957. The property was then delivered over on 25-4-1957 to the purchaser who had since plotted it out and allotted them to its members for the purpose of building houses. Conformably to the order of the Court, a sale deed was executed on 20-11-1959 by the Official liquidator in favour of the third respondent and the same had also been duly registered. More than three years after the confirmation of the sale by the District judge, the appellants, a few shareholders of the company, filed the application out of which this appeal arises on 27-3-1960 to the lower Court to review its order confirming the Rule, alleging in the application inadequacy of price and certain other irregularities in the conduct of the sale. The application also prayed for distribution of the property in specie amongst the shares-holders. The latter part of the prayer was sought to be sustained on the basis of Clauses 165 and 166 of the Articles of Association of the company. These provisions dealt with the procedure in case the Company were to be wound up.

(2.) THE former clause stated, that

(3.) THERE has been a preliminary objection to this appeal. It was contended that no appeal would lie from an order refusing to grant an application for review (vide order 47 Rule 7, C. P. C.), and Section 202 of the Companies Act, 1913, which permitted a rehearing of orders (thereby empowering a review of the order) being merely a rule of procedure would not apply to the present case as that enactment has now been superseded by the Act of 1956 and as the corresponding Section 483 in the latter Act did not confer any such power. Thus it is argued the power to review a judicial order would therefore be confined to Order 47, Rule 1, C. P. C. and as the application has been rejected, there will be no right to appeal therefrom. We consider that it is unnecessary to deal with the preliminary objection as we are of opinion that the judgment of the learned District Judge can be sustained on the merits of the case itself.