Bank of India v. Official Liquidator — 1994 DIGILAW 179 (CAL)

JUDGMENT Umesh Chandra Banerjee, J: It is now a well settled principle of law that in the event the Court exercises its discretion in the matter of sale or confirmation of sale in terms of Rule 272 of the Companies (Court) Rules, (1959) read with Rule 273, the Appellate Court would not normally interfere with the user of such discretion even if, the price for which the assets of the company in liquidation are sold, falls below the expected one or even does not reach the reserve price, unless of course, the Appellate Court comes to a definite conclusion that not only there is likelihood of a prejudice being caused or the prejudice was inherent in the method adopted by the Court in regard to the sale of the assets of the company and in the absence of which, in our view, question of interference by the Appellate Court against such an order of sale does not and cannot arise. The must be an inherent prejudice to the interest of the general body of creditors and the workmen of the company since the property is in custodia legis through the office of the Official Liquidator. The decision of this Court in the case of United Bank of India vs. Bharat Electrical Industry Limited (96 CWN 549) lend support to the view expressed above. 2. Be it noted here that the discretion as envisaged in terms of the statutory provision as noted-above, must be on sound legal principles, having due regard to the interest of the company and the general body of creditors and in the event the Appellate Court finds it otherwise than and in that event, there ought not to be any hesitation in setting aside the judgement since that is not otherwise conducive to the interest of the company and the general body of creditors. 3. Before proceeding further, however, the observation of the Supreme Court in Navalkha & Sons vs. Ramanya Das ( AIR 1970 SC 2037 ) ought to be noted. The Supreme Court in Paragraph 6 of the Report observed:- “In every case it is the duty of the Court to satisfy itself that having regard to the market value of the property the price offered is reasonable. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion. In Gordhan Das Chunilal vs. Kanthimathinatha Pillai, AIR 1921 Mad 286, it was observed that where the property is authorised to be sold by private contract or otherwise it is the duty of the Court to satisfy itself that the price fixed is the best that could be expected to be offered. This principle was followed in Rathnasami Pillai vs. Sabapathi Pillai, AIR 1925 Mad 318 and S. Sundararajan vs. Mohomed Ismil, M/s. Roshan and Co., AIR 1940 Mad 42 . In A. Subbaraya Mudaliar vs. V.K. Sundararajan, AIR 1951 Mad 986 , it was pointed out that the condition of confirmation by the Court being a safeguard against the property being sold at an inadequate price, it will be not only proper but necessary that the Court in exercising the discretion which undoubtedly has of accepting or refusing the highest bid at the auction held in pursuance of its orders, should see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud. It is well to bear in mind the other principle which is equally well settled namely that once the Court comes to the con.., elusion that the price offered is adequate, no subsequent higher offer can constitute a valid ground for refusing confirmation of the sale or offer already received. (See the decision of the Madras High Court in Roshan & Co.'s case, AIR 1940 Mad 42 ).” 4. It would also be convenient to note the observation of this Court in the case of Sharawan Agarwal vs. Shrinenp Investment Ltd. (94 CWN 482) which seems to be rather apposite in the factual metrix of the matter under consideration. This Court observed :– “Now, it is true that the Court must satisfy itself that having regard to the market value of the property, the price offered and accepted is adequate. This Court observed :– “Now, it is true that the Court must satisfy itself that having regard to the market value of the property, the price offered and accepted is adequate. The Court being the custodian of the interests of the Company and its creditors, the power to confirm sale or to withdraw confirmation has to be exercised with judicial discretion regard being had to the fact that the price fetched is the best that can be expected to be offered even though there may be no suggestion or irregularity or fraud. It is also true that in the present case there is a specific provision incorporated in the terms and conditions of sale there the sale in favour of a purchaser was liable to be set aside, even after the sale is confirmed and the purchase consideration is paid, in the interest and benefits of creditors, contributories and all concerned and/or for public interest. However, the investment of such power does not mean that the Court should review and set aside an order confirming a sale which has already taken place merely because at a later stage on a second thought some come, more particularly an offerer who was outbidden, says that he is willing to pay more. Once the Court has come to the conclusion that the price offered is adequate and has confirmed the sale, the subsequent higher offer made under such circumstances, without anything more, cannot constitute a valid ground for interfering with rights arising out of sale which has already been confirmed.” 5. Having dealt with the law on the subject let us now briefly advert to the factual aspect of the matter in issue. By an order dated November 12, 1991 Messers. Grand Steel & Alloys Limited carrying on business of manufacturing diverse qualities of iron and steel products at its factory at Dankuni in the district of Hooghly was directed to be wound up and the Official Liquidator attached to this Court was appointed as the Liquidator of the said company with a direction to take charge of the assets of the company. From the records it appears that the order of winding up, though, directed to be stayed from time to time but the order of stay stands vacated since April 3, 1992. From the records it appears that the order of winding up, though, directed to be stayed from time to time but the order of stay stands vacated since April 3, 1992. From the record it further appears that the Official Liquidator did take necessary steps and had the property inventorised as also valued by an approved valuer. The assets of the company have been valued at Rs. 3.45 crores. 6. The records depict that by an. order dated February 11, 1993 a portion of the land measuring about 3½ kottahs situated at the factory premises at Dankuni belonging to the company was set apart for the purpose of construction of a Transmission Tower by the West Bengal State Electricity Board. By the said order the West Bengal State Electricity Board was granted liberty to purchase the said plot of land upon payment of the price so determined by the valuer for the above-noted 3½ kottahs of land. In terms of the Rules 272 and 273 of the Companies (Court) Rule 1959, the learned Company Judge directed the sale of the assets to complete the liquidation proceeding upon advertisement in regard to the sale of above-noted assets. In this context reference to the order dated 5th March, 1993 passed by the learned Company Judge ought to be taken note of. For convenience's sake relevant extract of the above-noted order is set out hereinbelow :– "I.R.B.I. and the Bank of India will make available to the Official Liquidator within three weeks from the date hereof Rs. 5,000/- each for the purpose of advertisement and other expenses for sale, such advance sums will naturally be returned to the I.R.B.I. and the Bank of India on a first priority basis out of the sale proceeds as those are for the purpose of conduct of the sale. The Official Liquidator shall issue advertisements for the sale once in "The Statesman", once in "Economic Times" and once in the "Sanmarg" (all Calcutta Editions) within a period of seven weeks from date hereof. The date of sale is fixed 10 weeks hence i.e. 14th May, 1993 at 2/3 P.M. The secured creditors are at liberty to bring purchasers. Any other purchasers wishing to inspect the property shall be given facilities for such inspection by the Official Liquidator without of course in any manner jeopardizing the security. The date of sale is fixed 10 weeks hence i.e. 14th May, 1993 at 2/3 P.M. The secured creditors are at liberty to bring purchasers. Any other purchasers wishing to inspect the property shall be given facilities for such inspection by the Official Liquidator without of course in any manner jeopardizing the security. The valuation report is returned to the Official Liquidator to be produced again at the time of sale in the unopened sealed cover. The West Bengal State Electricity Board shall be at liberty to bid separately for the portion for which liberty has been specifically reserved in their behalf by the order dated 11th February, 1993. The notice of the Official Liquidator shall invite offers both for the entire assets and for the assets giving the possible allotment for the portion to West Bengal State Electricity Board out of the entire assets. It is made clear that in case offers are received only for the entire property, the entire property shall be sold. The West Bengal State Electricity Board shall also be at liberty to bid for the entire assets. The Bank of India is directed to serve a copy of this order upon the West Bengal State Electricity Board. The application by way of letter of the Official Liquidator is for the time being disposed of only upon these terms. The Official Liquidator and all parties to act on signed copy of the minutes of this order on the usual undertaking.” 7. Subsequently, by an order dated July 30, 1993, at the instance of Bank of India, the learned Company Judge was pleased to fix the date of sale on September 17, 1993 and directed the advertisement to be published in the meantime. In terms of the order, as appears from the records, advertisements were duly published inviting offers from the intending purchasers and it is on this date i.e. September 17, 1993 that the sale of assets of the company in liquidation did take place and the sale was confirmed at Rs. 2,21,11,100/- which is under challenge in this appeal. 8. Before proceeding further, however, the terms and conditions of sale ought to be noted and the same are set out hereinbelow : “(i) Officers enclosing a Banker's cheque equivalent to 10 per cent of the offer should submit their offer in a sealed cover with the Official Liquidator prior to the date of sale. 8. Before proceeding further, however, the terms and conditions of sale ought to be noted and the same are set out hereinbelow : “(i) Officers enclosing a Banker's cheque equivalent to 10 per cent of the offer should submit their offer in a sealed cover with the Official Liquidator prior to the date of sale. (ii) Such sealed offer would be opened by His Lordship on the given date of sale. (iii) Opportunity to be given to the intending purchasers to increase their offer. (iv) Proposed sale might be withdrawn and/or adjourned without assigning any reason." 9. On the actual conduct of the sale by the learned Company Judge there is no manner of dispute in regard to the method adopted by the learned Trial Judge viz., certain slips are made over to the persons participating in the sale and the intending purchasers were asked to write their best offers in the slip without making it known to the other offerers present in Court and the learned Company Judge upon consideration of the same declares the highest offerer as the purchaser. In fact, there is no dispute whatsoever that the offerers present in Court do not get any opportunity to bid further, since it is done on slips. 10. Be it noted here that apart from certain incidental issues, the main thrust of challenge in this appeal is the method adopted by the learned Company Judge in regard to the sale of assets of the company in liquidation. 11. Turning attention on to Mr. Mitter's contention on behalf of the Appellant Bank as regards the deviation from the conditions of sale ought, however, to be noted at this juncture. Mr. Mitter contended that the sale notice or even the conditions of sale did not in fact, indicate that the sale of assets would be effected as a going concern with the obligation to absorb entire labour force. It was contended that even on the date when the sale was being conducted or even when the bids were invited, the Court had not decided as to whether the sale would be free of all workers or with the obligation of the workers. It was contended that even on the date when the sale was being conducted or even when the bids were invited, the Court had not decided as to whether the sale would be free of all workers or with the obligation of the workers. It was contended that the sale of factory as a going concern with the workers has not been mentioned in the sale notice neither it can be deciphered from the conditions of sale and the subject matter of sale has assumed a completely different character in course of the conduct of sale by the Court. It was contended that the sale was no longer a sale of movable and immovable assets of the company in liquidation as mentioned in the sale notice but the sale of a factory of the company in liquidation as a running industrial unit with the workers. 12. Mr. Mitter next contended that the highest bid submitted in Court in sealed cover was not disclosed at the time of inviting fresh bids in Court-Had it been indicated to the bidders present in Court that the highest offer was in the region of Rs. 2.22 crores, there could have been a higher offer given in Court by the bidders present. In this context Mr. Mitter strongly contended that the conditions No. 4 of the conditions of sale has been definitely given a go by and there exists a violent departure/therefrom. Sale conditions do not mention that the persons present in Court will be entitled to make only one bid on a sheet of paper and such bid will be a closed bid and not an open bid – No opportunity of whatsoever nature was given to the persons present to outbid each other as is usual in an auction sale. Clause 4 of the conditions of sale, according to Mr. Mitter, envisages an auction sale; Clause 4 provides that tenderers present shall be given a chance to better their offers. Clause 4 of the conditions of sale, according to Mr. Mitter, envisages an auction sale; Clause 4 provides that tenderers present shall be given a chance to better their offers. It also records that any person other than the tenderess shall also be entitled to be present and make their bids offering any amount higher than the highest bid submitted but unfortunately the learned Trial Judge has not provided such an opportunity to the persons present to bid further – There is only one bid on a piece of paper which was folded and made over to the Court Officer by the person present, and thereafter no further bid was permitted and it is on this score Mr. Mitter contended that the sale has taken place in violation of conditions of sale and as such the sale stands vitiated by material irregularity and is liable to be set aside. In any event Mr. Mitter contended that the sale without fixing a reserve price is bad and ought to be set aside. The value of Rs. 3.45 crores as per Valuer's report has been mentioned in the sale order, but there is no mention of any reserve price either in the sale notice or in the sale conditions or in the order of the Court itself. 13. Finally, Mr. Mitter contended that the Court must be satisfied by itself that the price fetched is reasonable and as expected and in the event the sale is confirmed without being so satisfied, the confirmation of sale cannot be termed to be a proper exercise of discretion and as such is liable to be set aside. 14. The learned Company Judge apparently follows a definite practice in these matters of sale of assets of a company in liquidation. Before, however, we refer to our observation pertaining thereto, the practice as is being followed by the learned Company Judge needs to be elaborated with certain details. It appears that after the sale notice is published and the date is fixed in terms of the notice, the matter appears in the list for being dealt with by the learned Company Judge and when the matter is called on for the purpose of sale of assets, the offers already received by the Official Liquidator are placed before the Learned Company Judge and the learned Judge scrutinises the same. Thereafter certain slips are made over by the Court Officer to the intending bidders who are asked to write their best offer with their names. The filled up slips are then produced before the Judge, who in turn considers the same but the bids are not disclosed to any bidder or bidders. The highest offer as appears from the slip is selected and the sale is confirmed in favour of the party offering the highest bid as appears from the slips. It is true that the learned Trial Judge directs payment of the money within a very short period of time irrespective of the quantum of offer and if experience has any value it is not more than four weeks which is being allowed by the learned Judge in these matters for the purpose of making payment of the entire consideration money. The highest bidder is directed to pay certain earnest money and the balance within the period noted above. It is this practice which has strongly been criticised by Mr. Mitter, appearing in support of the appeal. Mr. Mitter contended that after all persons in the trade would not offer the highest possible price but will keep something up on their sleeves and as such it can never fetch the maximum possible price for the unit. It was next contended that the other bidders who are present in Court also do not get any opportunity to bid any further than what they have written in their slips. There is no manner of doubt that it is made known to the bidders to offer their maximum in the slips, provided by the Court, but the fact remains as to whether maximum possible price can be had on the basis as above. In our view, the answer cannot but a definite 'no' and Mr. Mitter's criticism on this Court cannot but be said to be justifiable. Be it noted here that it should always be the endeavour of the Court to obtain the highest price available in regard to the sale of assets since the same would enure to the benefit of the general body of the creditors and the company in liquidation. Can this method be termed to be a method which would enure to the benefit of the company in liquidation in the matter of sale of assets of the company in liquidation. Can this method be termed to be a method which would enure to the benefit of the company in liquidation in the matter of sale of assets of the company in liquidation. In our considered view, however, the answer cannot but be in the negative. Bidders are commercial people involved in business and no exception can be taken in that regard. The bidders will obviously try to pay a lesser amount if otherwise possible for a much higher gain and if the offers arc not known to the others and it is done in a confidential manner it is extremely unlikely that the price fetched would represent the fair price. It appears that the learned Company Judge takes upon himself the burden of conducting the sale in open Court but in our view, the sale by itself does not, in fact, give any further benefit to the company in liquidation. It is more or less in the nature of sealed tender and the highest tenderer is declared the purchaser– The Official Liquidator would have done that himself without intervention of the Court. But when the Court takes upon itself the burden of holding-the sale in Court it cannot obviously be equated with the sale by the sealed tender. The present practice followed by the learned Company Judge, we are afraid, has been made equivalent to the sale conducted by the Official Liquadator by sealed tender. Once the Court accepts to hold sale in Court then the same ought not to be on a sealed tender basis. Mr. Sen in this context submitted that the conditions of sale itself prescribes sale of assets and the expression ‘auction’ is significantly absent, but in our view, this practice of holding sale of assets in court can only be encouraged, provided, it enures to the benefit of the company in liquidation. If no fruitful purpose is achieved or if no better price is available, then the question of conducting the sale by the Court does not arise. If no fruitful purpose is achieved or if no better price is available, then the question of conducting the sale by the Court does not arise. Be it noted here that originally the concept of holding the sale in Court was not known in this High Court and it was Official Liquidator, himself who is to carry out this sale but not for long ago, the then Company Judge considered the matter and came to a conclusion that the prices fetched in regard to the sale conducted by the Official Liquidator on sealed tender basis cannot be said to be a reasonable price and as such public auction is held in Court and since then this has become more or less the accepted practice in regard to the sale of assets of the company in liquidation in Court itself and the practice of conducting the sale by the Official Liquidator through sealed tender has been given a complete go by. It is true that it is within the competence of the learned Company Judge to decide the mode of sale in regard to the assets of the company in liquidation but once the learned Company Judge decides that the sale should take place in open Court then of course, introduction of slips or by adopting a procedure equivalent to sealed tender basis, ought not to be encouraged since in our considered view, the same cannot possibly fetch the best possible price. 15. The Supreme Court in Navalkha’s case (supra) in no uncertain terms laid down that it is the duty of the Court to satisfy itself in every case that having regard to the market value of the property the price offered is reasonable and unless the Court is satisfied about the adequacy of the price the act of confirmation of sale would not be a proper exercise of judicial discretion: Where is the effort on the part of the learned Judge to obtain the best possible price-Mere making over certain slips of paper to the bidders present in Court and directing them to write the best possible price, cannot bring about satisfaction of Court in regard to the adequacy of price. When the learned Company Judge has taken upon himself to hold the auction in Court, there should be some positive effort of the Court to obtain the highest possible price, rather than being content with a mere distribution of slips and directing the bidders to write their best offer– The bidders present are not even allowed to know even the highest offer and as such, question of outbidding an offerer does not arise–on the state of facts as above, can it be said that there has been a positive effort on the part of the Court to obtain adequate price, for the unit, the answer, however, cannot but be in the negative. 16. Be it noted here that the sale price as obtained, is much below the price as mentioned in the valuation Report. Unfortunately, however, this aspect of the matter has not been considered by the Learned Judge in the proper perspective. The finding of the Learned Judge that further attempt to sell the assets may not fetch even the price obtained, does not, however, stand to reason. Has there been any attempt to sell after a second or third advertisement-the answer in the facts of the matter under consideration is in the negative– there should always be some sort of a factual support before one could come to such a finding–what is the factual basis–we are constrained to record that there exists no basis whatsoever for such a conclusion in the facts of the matter under consideration. 17. Incidentally in some of the matters which have also come up in appeal before this Court against the order of the Learned Company Judge, the sale price falls much below even the valuation report but the Learned Company Judge was pleased to record more or less in similar vein in all the matters that further attempt to sell may not be able to fetch a price which has been offered by the highest bidder and confirmation of sale did take place on the basis above-noted. Experience also tells that whenever there is a prayer for postponement if the sale or a further advertisement, the prayer does not find favour with the Learned Company Judge. It is this practice of the Court which have been strongly criticised by Mr. Mitter and we find sufficient justification therefor. 18. Experience also tells that whenever there is a prayer for postponement if the sale or a further advertisement, the prayer does not find favour with the Learned Company Judge. It is this practice of the Court which have been strongly criticised by Mr. Mitter and we find sufficient justification therefor. 18. As regards the appellant's contention viz., the Court did not make up its mind till the date of the auction as to whether the assets of the unit in liquidation is to be sold as a going concern or not, Mr. Mitter submitted that this state of situation is apparent in the facts of the matter under consideration by reason of the fact that the Learned Trial Judge himself has directed to write on the slips as to whether they are prepared to take the unit as a going concern or not or with labourers or not. It is on this count Mr. Mitter submitted that a hybrid procedure has been adopted by the Learned Company Judge in the matter of conduct of the sale in Court by the Learned Judge. We however, do not find any justification for such a comment. It is not a hybrid procedure at all on the contrary the effort is on the part of the learned Judge to ascertain as to whether the unit can be sold as a going concern or not. In that view of the matter, we need not dilate much on this score, suffice it to record, however, that the conduct of sale by the Learned Company Judge cannot be said to be irregular only because of the fact that offers were invited both as a going concern and as scrap unit and in our view, the attempt on the part of the Learned Trial Judge cannot be described in any way whatsoever, neither the sale can be said to be irregular on this count. 19. 19. Turning attention on the other issue as to whether the method adopted by the Court in regard to the sale of assets can be termed to be otherwise in order or not we wish to record that for the reasons as above, in the judgment there is likelihood of prejudice being caused and the prejudice is inherent in the method adopted by the Court in regard to the sale of assets of the company warranting interference by the Appellate Court since in our view, the method cannot be said to be conducive for the interest of the company in liquidation and the general body of creditors. 20. The other aspect of the matter as raised by Mr. Sen ought to be considered at this juncture. It has been contended that the auction purchaser M/s. Super Forging has been declared to be the highest bidder and has not only deposited the entire consideration money of Rs. 2,11,11,1111- but is in actual physical possession of the factory premises and is in fact, has taken all necessary steps for start of the factory including employment of several persons. Mr. Sen also drew further inspiration from the submission of Mr. Somnath Chatterjee, appearing for Workers Union to the effect that the employees has started seeing brighter days after a number of long gloomy years and as such, question of recalling of the order of sale at this juncture does not and cannot arise. Mr. Sen contended that after the purchaser came accross the sale notice, the purchaser obtained terms and conditions of sale and took inspection of the property and on such inspection submitted sealed offer for Rs. 2, 11,11,111/- and on 17th September, 1993 did appear in Court through Counsel. It was contended that since the offer of M/s. Super Forging was the highest, the same was duly accepted and one of the Directors was present in Court to go to the witness box to record the undertaking relating to employment of the erstwhile workmen of the company in liquidation and the entire money was paid in Court on that date itself and upon such payment the Court confirmed the sale. Incidentally, it is to be recorded that on 17th September, 1993 a cheque was given for Rs. Incidentally, it is to be recorded that on 17th September, 1993 a cheque was given for Rs. 1,18,43,333/- which was, however, subsequently replaced by Banker's Cheque on 20th September, 1993 and possession of the assets were also given on the said date and this appeal was preferred on 22nd September, 1993. Whereas Mr. Mitter, appearing for the appellant-petitioner, has submitted that this undue haste in making the payment of the entire consideration money within three days is to stall the appeal, Mr. Sen on the contrary, submitted that promptness in the matter of reopening the factory wherein so many workmen are involved cannot be attributed to be motivated. It was contended that in the factual backdrop of the matter under consideration the Latin Maxim, Actus Curiae Neminem Gravabit (an act of Court shall prejudice none) has its fullest application. Mr. Sen submitted that the Super Forging being total stranger to the proceeding, by reason of an advertisement as published in the newspaper, did bid at the auction in Court and deposited a substantial amount of money in terms of the order of the Court, and as a matter of fact, after obtaining the possession of the assets has also entered into a Memorandum of Understanding with the workmen for the purpose of effective running of the Mill. It was emphasized that the ball has been set rolling at the instance of the Court and by reason of the specific orders, the purchaser has altered his position and no Court should intervene or interfere with the order of sale of assets by reason of the changed situation. This submission, however, is rather interesting and important as well since it is a well-settled principle of law both by the English Court as well as by the Law Courts in this country that act of Court ought not to prejudice anyone and the interest of the third party, who is not directly involved in the matter ought to be protected always. As early as 1871 in Rodgar vs. The Comptoir D' Escompte DE Paris, did consider the issue and Lord Cairns in that perspective observed :– “Now, their Lordships are of opinion, that one of the first and highest duties of all Courts is to take care that the act of the Court does not cause injury to any of the suitors, and when the expression “the act of the Court” is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of appeal, but the act of the Courts, as a whole, from the lowest Court which entertains jurisdiction over the matter, up to the highest Court which finally disposes of the case. It is the duty of the aggregate of those Tribunals, if I may use the expression, to take care that no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court.” 21. The Supreme Court in the case of Jagat Dhish vs. Jawahar Lal ( AIR 1961 SC 832 ) relying upon the observation of Cairns L.C. in Rodger's case (supra) observed that the litigant deserves to be protected against the default committed or negligence shown by the Court or its officers in the discharge of their duties. In fang Singh vs. Brij Lal ( AIR 1966 SC 1631 ) the Supreme Court in the same vein observed: “There is no higher principle for the guidance of the Court then the one that no act of Court should harm, a litigant and it is the bounden duty of Courts to see that if a person is harmed by a mistake of the Court he should be restored to the position he would have occupied but for that mistake. This is aptly summed up in the maxim "Actus curiage neminem gravabit”. 22. This is aptly summed up in the maxim "Actus curiage neminem gravabit”. 22. This Court also in the Province of West Bengal vs. Surja Kanta fana as early as 1953 (58 CWN 424) in no uncertain terms stated that an auction-purchaser, who was a third party and had deposited the amount payable for the, purchase of an estate and in the event the sale was set aside, the auction purchaser was entitled to get back a refund of that amount, on the well-settled principles of restitution, together with interest for the period and anterior to the filing of suit for refund, from the date of the sale was set aside to the date of payment. The Bench in Surja Kanta's case (supra) observed:–– “The principles of restitution are recognised in s. 144 of the Code of Civil Procedure, but it is also well-settled that the duty of the Court and its jurisdiction to grant restitution is not limited by the words of s. 144 of the Code.” The Judicial Committee while dealing with the Court's duty to order restitution in a case where a sale in execution of a decree was set aside observed in the following terms in Jai Berham vs. Kedarnath Manvari (4) (L.R. 49 LA. 351), “On the main question-namely, whether the auction-purchasers are entitled to repayment of the deposit put into Court as a condition precedent to their handling over possession to the judgment-debtors, their Lordships are in agreement with the judgment of the High Court and think the order already referred to should on this point be affirmed. It is the duty of the Court under s. 144 of the Civil Procedure Code to 'place the parties in the position which they would have occupied, but for such decree or such part thereof as has been varied or reversed’. Nor indeed does this duty or jurisdiction arise merely under the said section. It is inherent in the general jurisdiction of the Court to act rightly and fairly according to the circumstances towards all parties involved.” 23. In view of the discussion as above, there is no manner of doubt that the contention raised by Mr. Sen needs to be considered in detail, by reason of the fact that his clients have already deposited the money and thereby deprived themselves of the availability of the money. The law is now well-settled in regard to the restitution. In view of the discussion as above, there is no manner of doubt that the contention raised by Mr. Sen needs to be considered in detail, by reason of the fact that his clients have already deposited the money and thereby deprived themselves of the availability of the money. The law is now well-settled in regard to the restitution. Be it noted however, that s. 144 of the Code of Civil Procedure cannot be termed to be exhaustive and there are natural exceptions of the principles as laid down under s. 144 of the Code of Civil Procedure and it is on this backdrop Mr. Mitter's submission in regard to the motive of the purchaser ought also to be considered. Mr. Mitter in no uncertain terms submitted that it is nothing but in the nature of a windfall and unjust gain and in order to scruttle any further move on the part the persons interested in obtaining proper valuation of the assets that this money has been deposited in Court with undue haste and expedition inspite of the, factum that the order itself has directed deposit of the purchase price within four weeks. The main thrust of Mr. Mitter's contention on this count is that while it is true that the law is well-settled to the effect that act of Court ought not to prejudice anyone but in the event of there being a motive to stall the further proceedings, question of applicability of the Latin Maxim as noted-above, does not arise. In any event, Mr. Mitter contended that in the event, there is likelihood of there being a prejudice, so far as the interest of the general body of creditors are concerned, the Latin Maxim cannot be taken as a shield. 24. The contentions of the parties in regard to the applicability of the Latin Maxim, in our view, shall have to be dealt with on the basis of the facts and circumstances of each case. In the matter under consideration, we have already noted that the method adopted by the learned Company Judge, in regard to the sale of the assets of the company, cannot be said to be a proper method adopted by the learned Company Judge for sale of assets of the company in liquidation. In the matter under consideration, we have already noted that the method adopted by the learned Company Judge, in regard to the sale of the assets of the company, cannot be said to be a proper method adopted by the learned Company Judge for sale of assets of the company in liquidation. Reminding ourselves of the guiding principles 'in the matter of sale of assets of a company in liquidation, we are of the view that the price fixed cannot be termed to be an adequate price neither the conscience of the Court can be said to be satisfied, considering the valuation report as available on records. It is on this factual backdrop, that the contention of Mr. Sen in regard to the act of Court shall have to be judged and considered and considering the factual matrix, we are unable to record our concurrence with the submission of Mr. Sen in that regard. In our view, the inadequacy of the price will take the Latin Maxim out of application in the facts and circumstances of the matter under consideration. 25. Turning attention on to the main thrust of challenge of Mr. Mitter once again as regards the method adopted by the learned Company Judge, we are of the view, that the method of distribution of slips in Court without holding a public auction cannot be said to be a proper method in the event of there being a sale in Court. The Official Liquidator himself would have completed the sale but in the event of there being an intervention of Court and when the sale takes place in open Court, question of slips of papers being made over to the inteding bidders and the offers not being made known to the other bidders present does not and cannot arise. We are constrained to record that the method adopted by the learned Company Judge is not a correct method and cannot possibly fetch the highest possible price. Nobody on earth would pay a higher price if he can avoid. The indication of the learned Company Judge to give maximum possible price in a confidential slips does not, in our view, sub-serve the purpose for which the sale takes place. Nobody on earth would pay a higher price if he can avoid. The indication of the learned Company Judge to give maximum possible price in a confidential slips does not, in our view, sub-serve the purpose for which the sale takes place. The effort on the part of the Court ought to be always for the best possible price which, in our view, in the facts of the matter under consideration, has not been made available. Significantly enough an adjournment was prayed for but that adjournment was also refused. The reasoning of the learned Company Judge cannot also be accepted. Be it noted here that this is for the first time the matter come up before the learned Company Judge for sale of assets and on the very first day the sale was concluded much below the valuation. For convenience's sake the observation of the learned Company Judge is set out hereinbelow:–– “.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mr. Dhandhania, appearing for the IBBI, specifically submitted that in view of the workers giving up their claim for priority under s. 529A of the Companies Act, 1956 his claims would have no objection to the sale of assets being held as a going concern. Mr. Ashim Banerjee for the Bank of India has no specific instruction in this regard but the sale have to be concluded in favour of Super Forgings because the valuation of the company. property of Rs. 3.45 crores (approx.) was impossible to reach specially in view of the taking of the assets as a going concern. (Emphasis supplied). .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Adjournment of the sale was prayed for by several parties including Bank of India. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Adjournment of the sale was prayed for by several parties including Bank of India. But to my mind such adjournment would not only produce any fresh purchasers. But even the purchaser ready at hand today is likely to run away, as the previous experience of the Company Court has shown again and again.” 26. We are at loss to see the recording of the learned Company Judge as quoted above, that it is otherwise impossible to obtain 3.45 crores especially in view of the taking of the assets as a going concern. The further observation of the learned Company Judge that the sale have to be concluded in favour of Super Forgings', in our view, also does not stand to reason-How many attempts were made by the Learned Company Judge, obviously as the records of the matter in issue depicts-It is the first attempt. 27. Be it noted here that the assets of the Company in Liquidation comprised of a Steel Rolling Mill––It is a mini steel plant and when the sale of a mini steel plant is to take place, the advertisements also should have been on All-India basis rather than restricting it to the State of West Bengal only and on this count also we find sufficient justification in Mr. Mitter's criticism of the judgment under appeal. 28. In any event, the observation of the Learned Judge in regard to 'purchasers likely to run away, in our view, is totally misplaced and wholly unfounded in the facts of the matter under consideration. 29. In that view of the matter, the sale of the assets of the company in liquidation is set aside and quashed. The, matter is remitted back to the learned Company Judge for fresh sale of assets. Be it noted here that the learned Company Judge is to direct advertisements on all-India basis and the sale ought to take place on the basis thereof. 30. The appeal is, therefore, allowed. The Official Liquidator is directed to obtain fresh direction from the learned Company Judge with utmost expedition since the matter is pending before this Court for quite some time. 30. The appeal is, therefore, allowed. The Official Liquidator is directed to obtain fresh direction from the learned Company Judge with utmost expedition since the matter is pending before this Court for quite some time. It is desired that the sale be completed within a period of 8 (eight) weeks after reopening of the Court after Summer Holidays during which the Official Liquidator is to retain the purchase price offered by Super Forgoings Limited. The Official Liquidator is, however, directed to invest the purchase price in Short Term Fixed Deposit not exceeding the period of ninety-one days from the date of reopening of the Court's Summer Holidays. 31. There shall, however, be no order as to costs. 32. After this judgment has been delivered, Mr. P.C. Sen, appearing for Super Forging Limited, being the purchaser as noted above, submitted that his client is out of this money for a very long period of time and the amount also is not that negligible. 33. Mr. Sen submitted further that instead of remitting the matter back to the learned Trial Judge for holding the auction, the Appellate Court may be pleased to hold the auction in the same manner as directed in the order, which would not only expedite the matter, but also solve a lot of other problems. Mr. Sen submitted that this Court may i give direction for publication of advertisements and it may be also on All India basis and the sale be fixed on a date, as would be deemed fit by this Court. 34. All the other parties appearing before this Court, have accepted the submission of Mr. Sen and prayed before this Court that the auction should be held in this Court. It is, however, placed on record that no-one appeared on behalf of the Bank of India, the appellant, when the judgment was delivered. As such, this Court is not in a position to ascertain the views of the appellant Bank of India. 35. Be that as it may, it is not unknown that the matter, if re-opened before the learned Trial Judge for a fresh bid, is to take some time and then another round of litigation before this Court. In order to avoid that, in our view, interest of justice would be sub served in directing sale of assets of the company in this Court itself. 36. In order to avoid that, in our view, interest of justice would be sub served in directing sale of assets of the company in this Court itself. 36. In that view of the matter, the Official Liquidator is directed to advertise the sale of assets of the Company in liquidation excluding the three and half cottahs of land, already sold in favour of West Bengal State Electricity Board in 'Times of India (Delhi), 'Indian Express' (Bombay) and 'Statesman' (Calcutta) and one Hindi Daily, either 'Sanmarg' or 'Daily Viswamitra' (Calcutta) and another Hindi Daily, Nav Bharat Times (Delhi Edition). 37. As regards the terms and conditions of sale, the Official Liquidator shall formulate the same and then call a meeting of the parties at his office, excepting however, the purchaser and have it confirmed at the meeting by the parties in line with the usual conditions of auction sale. 38. It is further ordered that the Official Liquidator shall have the assets of the company in liquidation inventorised within a period of 10 days from the date hereof and obtain a valuation report of the same immediately thereafter. At least four weeks time must elapse between the date of publication of the advertisements and the date of sale, which is fixed on 15th July, 1994 at 2 P.M. The intending bidders might bid in Court itself or might send their sealed tenders to the Official Liquidator. 39. The costs, charges and expenses of the advertisements and valuation shall be borne by the secured creditors in equal proportion. 40. It is made clear that in the event the Official Liquidator feels it inconvenient in any way in the matter of publication of the advertisements, the Official Liquidator may request anyone of the parties including the purchaser to insert advertisements as per the directions of the Official Liquidator. 41. The Official Liquidator is directed to take formal possession of the assets of the company in liquidation, though, however, will not interfere with the existing state of affairs and if any business activity is being carried on with the assets of the company, in that event the Official Liquidator shall allow the continuance of such business activity under the Official Liquidator. 42. 42. There will however, be an order of injunction restraining the purchaser, who are said to be in actual physical possession of the assets, from dealing with or disposing of any of the assets of the company in liquidation excepting in the usual course of business. If however, any materials are to be removed from the factory premises in the usual course of business, due intimation therefor shall be given to the Official Liquidator and who in turn shall depute a representative to oversee such removal and report to the Official Liquidator. 43. The Official Liquidator, however, is directed to execute and register the Conveyance in favour of the West Bengal State Electricity Board in regard to the plot of land measuring about three and half cottahs, purchase price of which has been paid by the State Electricity Board. All costs, charges and expenses of preparation, execution and registration of the Conveyance shall be borne by the West Bengal State Electricity Board. 44. By this order the- two other appeals pending in this Court being Nos. 825 of 1993 and 786 of 1993 also stand disposed of, as above. 45. All parties to act on a signed copy of the operative portion of this judgment in the usual undertaking. Bijitendra Mohan Mitra, J.: I agree. Appeal allowed.