SUSHILA PULP AND PAPERS LTD Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) This special appeal has been filed by M/s. Sushila Pulp and Papers Ltd., through its managing director Sri Girdhari Lal Tiwari praying for setting aside the order dated December 17, 2003, passed by the learned single judge in Misc. Application No. 119592 of 2002 arising out of Misc. Company Application No. 3 of 2000, whereby the plant and machinery of the company in liquidation has been auctioned in favour of M/s. S. S. Metals (respondent No. 4) and the sale was confirmed under rule 272 of the Companies (Court) Rules, 1959.

(2.) M/s. Sushila Pulp and Papers Ltd. a company incorporated in 1991 under the Companies Act, 1956, was set up for manufacturing of paper. Soon after it started production it faced problems and is lying closed since 1993 and has not been doing any business since then. It was directed to be wound up by order of the company judge dated November 1, 2001, pursuant to the recommendation of the Board for Industrial and Financial Reconstruction, made under Section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985. Pursuant to the winding up order the official liquidator took possession of the assets of the company. The liquidator, after taking possession, obtained the report from valuer approved by the court. The valuer submitted its report dated January 25, 2002. In the said valuation report the realisable value of the plant and machinery was shown to be Rs. 22,85,764.50. Auction sale notice was published in the news papers inviting offers for sale of the assets of the company in liquidation to be submitted on or before July 17, 2002. Sri Girdhari Lal Tiwari, ex-managing director of the company in liquidation appeared and objected to the auction sale on the ground that the valuation shown in the report dated January 25, 2002, was very low and in fact the value was much more. The court permitted him to file the objection before the official liquidator before July 24, 2002, and the sale was adjourned.

(3.) Sri Girdhari Lal Tiwari, ex-managing director of the company in liquidation filed objections dated July 22, 2002, before the liquidator requesting for fresh valuation report and till then the proceedings of the sale may remain in abeyance.