DISTRICT COLLECTOR NILLORE Vs. CIRCAR PAPER MILLS LTD

JUDGEMENT

(1.) The State through its District Collector, Nellore and the concerned Mandal Revenue Officer are the appellants in this appeal, filed under clause 15 of the Letters Patent challenges the correctness of the orders passed by the learned single judge in Company Application No. 1231 of 2004 in R.C.C. No. 20 of 2000, dated December 30, 2004, whereby at the instance of the company in liquidation viz., M/s. Circar Paper Mills Ltd., through its official liquidator the application purported to have been filed under Section 457(1)(c) of the Companies Act, 1956, read with Rules 9 and 11(b) of the Companies (Court) Rules, 1959, seeking for permission to sell the properties in question and for other consequential reliefs was ordered.

(2.) The brief facts, arising out of the present proceedings, are that in respect of the said company an order of winding up was passed on February 14, 2001, by the learned single judge in R.C.C. No. 20 of 2000. Thereafter, on an application filed by the official liquidator, as per the orders dated December 13, 2004, the official liquidator was permitted to sell the said property by inviting sealed tenders by publication in newspapers. Accordingly, as evident from the record, the official liquidator filed a report on August 24, 2004, dividing the property into three segments and followed up by the advertisement in the newspapers. In response thereto, several offers have been given, and later in view of the interest shown by the bidders to quote composite offer of all the allottees together, the official liquidator fixed the aggregate amount at Rs. 6,05,50,000 and conducted the auction, wherein M/s. Jeevaka Kandasari Sugar Mills Ltd., Hyderabad, which is added as respondent No. 5 in this appeal quoted the highest consolidated offer of Rs. 780 lakhs and paid 20 per cent. of the offer by the cheque dated August 18, 2004.

(3.) In the meanwhile, the Mandal Revenue Officer issued a telegram to the official liquidator on August 17, 2004, claiming that an extent of acres 40.65 cents in Survey Nos. 445-A1, A-5, A-6, 525, 527 and 529A is assigned land, and therefore, it could not have been sold or alienated. However, admittedly the said land is in possession of the company in liquidation. Later, the said Mandal Revenue Officer and the District Collector, Nellore were impleaded. The official liquidator filed another report on October 12, 2004, pointing out that out of the total extent, an extent of acre 25.29 cents is a patta land and the other extent of acre 40.65 is an assigned land. There appears that no objection is expressed in the initial stage for proceeding with the alienation, and therefore, the entire auction was proceeded with and ultimately the sale virtually came to a final conclusion. The learned single judge by taking into consideration all these and other facts and checkered events, including the objections raised by the appellants herein, rejected the same and allowed the application filed by the official liquidator confirming the highest bid in favour of respondent No. 5 for an amount of Rs. 780 lakhs and with further directions to complete the formalities. While, allowing the said application, the learned single judge has taken into account the fact that all the while when the process is on even before the company court, no attempt has been made by the appellants herein to enquire into the purchases of the landed property by the company much earlier to 1986 nor even after the orders of winding up were passed by the company court. It is also to be noticed that by taking into account the market value as quoted by the appellants before the learned single judge and expression of no-objection for deposit of amount at such rate, i.e., at Rs. 1.50 lakhs per acre with the Government the learned single judge has also directed the said amount of Rs. 1.50 lakhs per acre to be deposited with the appellants herein out of the total proceeds. Therefore, the appellants cannot be permitted to take such objection and the same are not unsustainable.