Decided on February 22,1955

MATHAI Respondents


- (1.) The appeal is from an order of the District Judge of Parur declining to confirm the sale of a rubber estate owned by a Public Limited company (under liquidation). The learned Judge found that there was no proper publicity about the sale and that the official liquidator who held the sale had not complied with the direction of the court to publish the date and the particulars regarding the sale in The Hindu, Madras. The learned Judge further held that on account of the insufficient publicity the property had to be knocked down for an inadequate price. We are in full agreement with these views. At the same time we feel bound to state that in a sale conducted by an official liquidator or an official receiver the court is not fettered in its discretion to refuse to confirm or even to set aside the sale in any case in which it thinks that the sale was neither a fair nor a just one - see AIR 1931 Rangoon 122 (SB) and 1121 XXXVII Cochin Law Reports 129. In respect of such sales the powers of the court are wider than those possessed by the court in setting aside sales in execution of decree. Regard being had to this view of the law we cannot accept the position contended for by the learned Advocate General, who appeared on behalf of the appellant, that in the absence of fraud on the part of the official liquidator or collusion between him and the purchaser the court cannot refuse to confirm a sale held by him. Counsels endeavour to show that the price fetched at the sale was not inadequate and that even if it were so, that was not consequent upon any irregularity in the matter of publishing and conducting the sale was a vain one. When the court is satisfied that the sale was not after due publicity and there were reasons to think that the price fetched was inadequate, that would be sufficient justification for the court to refuse to confirm the same. In an earlier stage of this very case this court had occasion to indicate this view ( 1953 KLT 544 ). The lower courts order declining to confirm the sale and directing a fresh sale has therefore to be upheld. We decide accordingly.
(2.) When the position that we cannot interfere with the lower courts order was made clear at the hearing, the learned Advocate General urged that following the example in XXXVII Cochin 129 and the Madras decision in (1946) 1 MLJ 350 followed there his client should be allowed a reasonable rate of interest on the sale price of Rs. 10,000 paid by him into the hands of the official liquidator. In our opinion the facts in the present case are entirely different from those in the two cases mentioned. In the Madras case, soon after the sale the insolvents widow came forward to deposit enough money into the court to satisfy the creditors in full and the District Judge, before whom the insolvency proceedings were pending directed the sale to be set aside, at the same time ordering the petitioner to pay the purchaser a solatium of 5% on the analogy of O.21 R.89 of Civil Procedure Code. The High Court declined to interfere with the order when the purchaser appealed against it. The validity of the sale was not impugned in that case and the court passed an equitable order to safeguard the interests of the purchaser as also of the insolvents family. Here the appellant came as a speculator and the gamble failed. Even before the receivers report for confirmation of the sale came up for orders respondent 1 had come forward with his application impugning the sale and offering Rs. 20,000/- as his first bid and undertaking to leave that as a firm offer without leave to withdraw therefrom. When there was an offer for double the amount for which he bid the property and he knew that there were irregularities in publishing and conducting the sale the appellant had only to act according to the old adage that discretion was the better part of valour and withdraw from the whole affair. Instead he persisted in seeking to make his gamble a success and we cannot make the company under liquidation bear a share of the burden of that attempt. In this connection it may be noticed that respondent 1 had as directed by the lower court paid into the court the amount of his offer viz., Rs. 20,000/-. If ultimately somebody else purchases the property for a higher price, he will have to withdraw his money without any compensation. The court cannot make the company bear the burden of the losses these speculatars incur in their ventures.
(3.) In the Cochin case referred to a witness offered to purchase the property at a higher price when he was examined before the insolvency court and in the appeal against the order of learned District Judge, during the course of the arguments the appellants counsel told the court that the witness was prepared to stand by his offer and to pay into the court at such time as the court directs the amount of the offer. The court made the deposit of that amount a condition precedent for the appeal being allowed. We cannot extend the rule in that case beyond its own facts. There is therefore no warrant for allowing any interest to the appellant on the bid amount deposited by him pursuant to the auction sale in his favour. The claim for interest is hence negatived.;

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