BHANWARLAL Vs. BABULAL

JUDGEMENT

(1.) This appeal is by the auction purchasers, under S. 75 of the Provincial Insolvency Act, 1920 (hereinafter referred to as 'the Act'). They are aggrieved by the action of the receiver - - forfeiting their one -fourth deposit of the bid money for alleged breach of the terms of the auction in not depositing remaining slim of the bid within thirty days of the auction.

(2.) THE applicants first approached the Insolvency Court by an application under S, 68 of the Act which was allowed and the forfeiture was set aside with directions to the receiver to return the one -fourth deposit. The receiver preferred an appeal under S. 75 of the Act to the Court of the District Judge, Raipur, who by order dated 4.3.1982 allowed the appeal by setting aside the order of the Insolvency Court and upholding the action of the receiver of forfeiture of Pile -fourth deposit. The auction purchasers have, therefore, approached this Court in this appeal.

(3.) AFTER conducting the auction, the receiver submitted his report to the Court on 8.5.1979 and informed that 1/4th deposit made by the auction purchasers had been forfeited for non -deposit of the remaining bid money within the stipulated period of thirty days. It is also not in dispute that no formal intimation of forfeiture of 1/4th deposit was given to the auction purchasers by the receiver. The auction purchasers complained against the action of the receiver, by their application under Section 68 of the Act filed on 25.4.80. By order dated 20,11.1982 the Insolvency Court set aside the action of the receiver holding that the application of the auction purchasers can be treated to be one invoking powers of the Court under Section 4 of the Act and the limitation prescribed under Section 68 of the Act can have no application to the facts of the case. The Insolvency Court also held that the terms of auction permitting forfeiture of 1/4th deposit having not been duly notified to the bidders before sale, the action or forfeiture of Rs. 70,000 being 1 /4th deposit of the total bid, was without authority.