ROWTHMALL NEOPANI THROUGH THEIR REPRESENTATIVE LADHURAM PUROHIT Vs. NAGARMALL MADAN GOPAL REPRESENTED BY PRAHALADA RAI KADIA

JUDGEMENT

(1.) These are appeals preferred from the orders passed by the learned District Judge of Guntur on I.A. No. 73 and I.A. No. 85 of 1939 in O.P. No. 266 of 1936 on the file of the High Court, Madras. The original petition was for the winding up of the Guntur Cotton, Jute and Paper Mills Co., Ltd., and it was filed in the High Court on the 2nd October, 1936, and the winding up order was passed on the 17 December, 1936. The subsequent proceedings in liquidation were transferred to the District Court, Guntur.

(2.) It is not necessary, I think, to state again in detail all the facts which have been fully set forth in the order of the learned District Judge. Put quite briefly the position is as follows. On the 15 February, 1938, the District Judge gave permission to the Official Liquidator to sell the entire property belonging to the Guntur Cotton, Jute and Paper Mills Company Ltd. The permission was coupled with a condition that the sale should be for not less than Rs. 80,000. On the 19 January, 1939, the Official Liquidator entered into a contract of sale of the properties to one Rowthmall Neopani for Rs. 95,000 (Ex. IX). On the 23 January, 1939, the District Judge approved of this contract of sale and permitted the Official Liquidator to compromise two suits (O.S. No. 15 of 1923 and O.S. No. 21 of 1924 on the file of the Sub- Court, Guntur) in which the company was concerned as, plaintiff in the first and defendant in the second. In pursuance of the orders of the District Court, the Official Liquidator compromised both those suits and decrees were passed by the Subordinate Judge of Guntur in terms of the razinamas. On the 27 January, 1939, one N. Madan Gopal who had been one of the creditors on whose petition the winding up order was made, put in the application, I.A. No. 75 of 1939 in the District Court in which he prayed that the contract of sale said to have been entered into by the Official Liquidator with Rowthmal Neopani might be set aside, cancelling if necessary the order passed by the learned District Judge on the 23 January. On the 31st January, 1939, Perripati Ven-kataratnam filed in the District Court I.A. No. 85 of 1939. He alleged that he was one of the shareholders in the Guntur Cotton, Jute and Paper Mills Company Ltd., and he prayed that the order passed by the learned District Judge on the 23rd January, 1939, which he described as an ex parte order, might be set aside and fresh orders passed. The learned District Judge disposed of both these applications together and passed identical orders in both. He decreed: That the permission granted by this Court on 23 January, 1939, for the compromise of the suits O.S. Nos. 21 of 1924 and IS of 1923, Sub-Court, Guntur, and for the sale of the mill properties be and hereby is revoked; That the first respondent (that is the Official Liquidator) do hold a fresh sale of the properties by public auction as early as possible after due notice in the public press ; That if at the public auction to be. held hereafter the property fetches only Rs. 95,000, the second respondent (Rowthmall Neopani) must be given preference over the other bidders and that if the property fetches more, it must be knocked down to the highest bidder; that the first respondent (the Official Liquidator) is hereby directed to obtain the sanction of the Sub-Court Guntur, for the sale of the property as he is also a Receiver appointed by that Court; and That the respondents do pay the petitioner's costs.

(3.) Rowthmall Neopani has preferred both these appeals from the two orders of the Lower Court. The contentions of the learned Advocate-General for the appellant can be briefly stated as follows:-(1) the learned District Judge had no power to revoke the sanction which he had given on the 23 January, 1939, for the sale of the properties, and for the compromise of the suits, and (2) that, even if the learned District Judge had power to revoke his own sanction, he ought not to have done it in the present case.