GORDON DAS CHUNI LAL DAKUWALA; KANTHIMATHINATHA PILLAI Vs. TSRIMAN KANTHIMATHINATHA PILLAI AND ANR; GORDON DAS CHUNI LAL DAKUWALA

JUDGEMENT

(1.) These appeals arise out of proceedings in the District Court of Tinnevelly under Act VI of 1882 in connection with the winding-up of the South Indian Mills Company Limited. The Company in question was floated in 1908 and a compulsory order for its winding-up under Section 129 of the Act was made by the District Court on 21st February, 1913. For practical purposes its assets consisted of the building and the machinery of the Darragh Mills at Quilon which had been purchased by the Company in 1909 for Rs. 2,62,500. The sale price had been largely raised by a mortgage on the said property and the mortgagee in August, 1919, obtained a decree for about 4 1/2 lacs. For one reason or another among which the war and the litigation between the Company and the mortgagee doubtless figured largely, proceedings dragged on and practically nothing was done to realise the Company s assets till 20th February, 1920. On that date, the Official Liquidator wrote to the District Judge intimating that he had received an offer of 5 1/2 lacs for the mills as they stood and recommended its acceptance. After a personal interview with the Official Liquidator the same day, the District Judge passed an order permitting the Official Liquidator to sell at the price offered "conditionally on the offer or giving a valid cheque for Rs. 50,000 by the 21st." The purport of this order was communicated to appellant the same day, apparently verbally; and formal communication in writing was made by a letter of the Official Liquidator dated 23rd February, 1920. The cheque for Rs. 50,000 was handed to the Official Liquidator on the 20th. A further cheque for Rs. 4,10,000 was given to him on the 24th and paid into Court in discharge of the mortgage- decree. The balance was paid on or before the 28th.

(2.) On 2nd March, 1920, first respondent, the former manager of the Company, presented a petition in the District Court objecting to the sale to appellant as being for an inadequate price, putting forward an offer from Mr. Ranchod Lal-Amratlall of Ahmedabad for Rs. 7,01,000 and asking that the latter should be accepted, or the property sold by auction.

(3.) The District Judge after satisfying himself of the bona fides of Mr. Ranchod Lal s offer by taking a deposit from him of the amount specified in the form of cheque, issued notice to all parties (including the Official Liquidator, 2nd respondent, before us; and after a full inquiry passed a further order on 14th April, 1920, cancelling the sale to appellant and directing sale by auction.