Tungabadra Sugar Works Mazdoor Sangh & Ors. v. Subhash Kathur

For Appellants: Mr.V.Prakash Senior Counsel for M/s.Ramapriya for Appellant in OSA 59 & 60/09 and R5 in OSA 76/09, R4 in OSA 77/09 & R3 in OSA 82/09 Mr.Karthik Seshadri for Appellant in OSA 61 to 63, 76 & 77/09 Mr.Sathish Parasaran for Appellant in OSA 82/09 & R3 in OSA 59 & 77/09For Respondent: Mr.T.K.Seshadri Senior Counsel for Mr.P.B.Ramanujam for R1 in OSA 59, 77 & 82/09 & R3 in OSA 61, 62 & 63/09` Mr.AR.L.Sundaresan Senior Counsel for Mrs.K.Latha ParimalaVardhana Addl. O.L. for O.L. For R2 in OSA 59, 76, 77, 82/09 & R1 in OSA 60 to 63/09 Mr.R.Ravichandran for R2 in OSA 60 to 63/09COMMON JUDGMENT(Judgment of the Court was delivered by M.CHOCKALINGAM, J.)All these appeals challenge a common order of the learned SingleJudge of this Court made in C.A.Nos.1811 of 2005, 854 of 2006 and2740 to 2742 of 2007 in C.P.Nos.170 of 1995.2.All the above appeals have been filed under the followingfacts and circumstances:(a) One M/s.Dev Sugars Limited was ordered to be wound up inC.P.No.170 of 1995 and C.P.No.35 of 1997 by an order dated 16.9.1999.An Official Liquidator was appointed who took possession of theassets of the company on 28.9.1999. State Bank of Mysore whoextended financial assistance to the said company, in order to securethe outstanding dues, filed O.A.No.440 of 1997 before the DebtRecovery Tribunal (DRT), Bangalore, for recovery of a sum ofRs.22,31,78,558.55. After the decree was made in the said O.A., theRecovery Officer issued an official notice for the sale of the https://hcservices.ecourts.gov.in/hcservices/ properties in various newspapers fixing the date of auction as11.8.2005. Since the said company was ordered to be wound up, theOfficial Liquidator of the company raised his objections before theTribunal at Bangalore. The auction was directed to be held by theDebt Recovery Tribunal. The applicant in C.A.No.1811/2005 a thirdparty, participated in the auction and his offer of Rs.10.25 croresbeing the highest was accepted by the Recovery Officer. The applicantdeposited 25% on the same day, and the balance amount was alsodeposited in time as directed by the Tribunal. The said auction salewas confirmed by the Recovery Officer on 12.9.2005, and a letter ofconfirmation was also issued to the applicant. (b) The State Bank of Mysore obtained prior permission from theCourt for selling the properties of the company. After the issuanceof the sale confirmation letter, the applicant approached theOfficial Liquidator to hand over possession of the property of thecompany in liquidation. Since no action was taken by the OfficialLiquidator, the DRT by letter dated 26.10.2005 also wrote to theOfficial Liquidator directing him to withdraw the security personnelappointed by him to enable the DRT to hand over possession of theproperty. The Recovery Officer also wrote a letter on 23.9.2005 tothe Chief Secretary, Government of Karnataka, to provide securitiesfor the properties of the company in liquidation. A receiver wasalso appointed by the Recovery Officer to hand over possession. Insuch circumstances, the auction purchaser of the property filedC.A.No.1811/2005 seeking for a direction to the Official Liquidatorto remove the Security Guards and hand over possession of theproperty.(c) While the matter was pending, C.A.No.250 of 2006 was filedby M/s.Thungabadra Sugar Works Mazdoor Sangha, represented by itsPresident to implead them as a party in C.A.No.1811/2005 allegingthat State Bank of Mysore approached the Court for permission, andthe Company Court in C.A.Nos.1251 to 1253 of 1999 permitted theapplicant/Bank on 10.3.2000 in O.A.Nos.440 and 1300 of 1997 byimposing a condition that the leave granted was subject to thecondition that the Official Liquidator was impleaded, and no coercivesteps were taken against the assets of the company during or afterthe conclusion of the proceedings before the Tribunal; that themembers of the Sangh were appointed as Security men by the OfficialLiquidator to protect the assets of company with effect from 1.8.2001on a monthly salary basis; that the DRT, Bangalore, passed a decreein 2001 and ordered for sale by auction of the assets of the companyon 1.10.2004; that the Worker's Union objected to the sale and fileda writ petition before the High Court of Karnataka seeking stay ofthe sale by auction proceedings as their salary and provident funddues to the extent of Rs.15 crores were due from the company; thatthe High Court of Karnataka by an order dated 27.9.2004 made aninterim order to the effect that the sale was subject to the resultof the writ petition; that in view of the said order, the RecoveryOfficer of the DRT postponed the auction proceedings to be held on1.10.2004; but, again the DRT called for the auction of the propertyby fixing the date as 11.8.2005; that the Sangh filed a freshaffidavit before the High Court, Karnataka, in W.P.No.37991 of 2004objecting to the methods adopted by the DRT; that apart from that,M/s.Tapti Machinery who are the petitioners for winding up of thecompany and also a creditor of the company objected to the sale andfiled objections separately before the Official Liquidator and also https://hcservices.ecourts.gov.in/hcservices/ before the DRT, Bangalore; that all the objections were rejected bythe DRT and the sale was conducted and confirmed in favour of theapplicant in C.A.No.1811/2005 who was the successful bidder; that thesuccessful bidder filed a petition before the High Court of Karnatakato implead them as a party in the writ petition and the same wasallowed; that after getting himself impleaded in the writ petition,the applicant herein filed a petition to quash the writ petition, butthe High Court by order dated 2.12.2005 dismissed that petition filedby the auction purchaser, and under the circumstances, the Sangh is anecessary party. (d) The said application was allowed as prayed for, and thus theSangh has become a party. On being impleaded, the Sangh filed acounter affidavit opposing the said application that the property wassold in total violation of the procedures and also interim orderspassed by the Court.(e) Another application in C.A.No.253 of 2006 was filed byM/s.Tapti Machineries (P) Ltd., to implead them as a party inC.A.No.1811 of 2005. The same was allowed by the Court on 1.3.2006as prayed for. On being impleaded it has filed a counter affidavitstating that they filed C.P.No.35 of 1997 for winding up of thecompany and C.P.No.170 of 1995 was filed by M/s.Simcom Ltd.; that byorder dated 16.9.1999, the Court ordered winding up of the company,and the Official Liquidator was appointed to take possession of theproperty of the company in liquidation; that the properties were soldfor a meagre value of Rs.10.25 crores while it was valued based onGovernment valuation at Rs.57 crores; that the respondent also fileda writ petition in W.P.No.26564 of 2005 before the High Court ofKarnataka challenging the sale proceedings, and the same was alsopending; that they were also taking steps for revival of the company;that an application was also filed to that effect before this Court;that the proper and necessary procedure was not followed by theRecovery Officer while selling the property in auction sale which isin the custody of the Official Liquidator; that under thecircumstances, the sale had no legal sanctity and hence theapplication was to be dismissed. (f) The Official Liquidator filed a report on 31.1.2006 whereinhe has stated that he took possession of the available assets of thecompany on 28.9.1999; that after taking possession, the premises werelocked and sealed; that he also appointed the Mazdoor Sangh tosafeguard the assets of the company in liquidation with effect from28.9.1999; that they withdrew their services in the month of December1999 for the non-payment of the security charges; that on 30.7.2001,a meeting was conducted, and it was decided to appoint M/s.TungabadraSugar Works Mazdoor Sangh to safeguard the premises with effect from1.8.2001 and to make the payment out of the rent amount collectedfrom the Central Warehousing Corporation; that he filed hisobjections before the DRT, Bangalore, on 1.10.2004, in response tothe sale proclamation issued by the DRT; that when the DRT issued aproclamation of sale of property for the second time fixing the dateof auction as 11.8.2005, again objections were filed by the OfficialLiquidator putting forth his objections to the sale; that thevaluation of the property has been made on 24.3.2003 by a valuerwithout the knowledge of the official liquidator; that the inventoryreport dated 25.11.2004, also revealed that the valuation of theproperty has been done without the knowledge of the OfficialLiquidator; that in view of the order passed by the Company Court on https://hcservices.ecourts.gov.in/hcservices/

10.3.2000 in C.A.Nos.1251 to 1253 of 1999, the sale conducted by theDRT, Bangalore, without the participation and presence of theOfficial Liquidator is vitiated; that he has also received the copiesof the letters addressed to the CBI by the ex-shareholders/directors/promoters of the company in liquidationwherein certain allegations against the Recovery Officer have beenmade; that under the circumstances, the Official Liquidator soughtfor a fresh sale by the DRT with the association of the OfficialLiquidator, and the sale proceeds should be deposited with thisCourt.(g) Apart from filing the above report, the Official Liquidatorhas also made an application in C.A.No.854 of 2006 to set aside thesale confirmed by the DRT and to direct the third respondent CentralWarehousing Corporation to remit the arrears of rent to the OfficialLiquidator and also to permit the Official Liquidator to sell theassets of the company in liquidation afresh. (h) The first respondent Bank filed a counter questioning themaintainability of C.A.No.854 of 2006.(i) The learned Single Judge heard the Counsel on either side,allowed C.A.No.1811 of 2005 and dismissed C.A.Nos.854 of 2006 and2740 to 2742 of 2007. Hence these appeals at the instance of therespective parties.3.Advancing arguments on behalf of the appellant Sangh in OSANos.59 and 60 of 2009, the learned Senior Counsel Mr.V.Prakash wouldsubmit that it is pertinent to note that the appellant had veryvehemently objected to the auction fixed by the Recovery Officer andfiled a writ petition immediately when the first auction was calledfor and also filed objections before the Recovery Officer when thesecond auction was called; that the company in liquidation had notpaid salaries and wages to the workmen and also statutory paymentslike gratuity, bonus, EPF Contributions; that the appellant is veryinterested in ensuring that the assets of the company in liquidationfetched the best price possible; that without reference to theofficial liquidator, no valuation could be done; that the valuationbased on which the upset price came to be fixed by the RecoveryOfficer was unacceptable and too low; that in the instant case, sincethe affected party is the official liquidator who is holding theassets in trust for so many claimants, the Company Court'sjurisdiction under Sec.446 does not get ousted; that there appears tobe serious collusion between the successful bidder and the RecoveryOfficer; that there was no proper information to the public on theproposed auction, and under the circumstances, the auction salealready conducted has got to be set aside. 4.Advancing arguments on behalf of the appellant in OSA Nos.61to 63, 76 and 77 of 2009, the learned Counsel Mr.Karthik Seshadriwould submit that the order of the Company Court made in CA Nos.1251to 1253 of 1999 dated 10.3.2000, was not varied or modified till dateand hence without the leave of this Court no coercive steps likeauction sale, is possible in law; that the proposed auction has beenchallenged by the Workers' Union even as early as 2004 before theHigh Court of Karnataka; that the auction held on 11.8.2005 was thesubject matter of challenge before the DRT at Bangalore; that sincethe successful bidder had approached this Court in CA No.1811/2005,the DRT did not pass final orders in the appeal before it; that under https://hcservices.ecourts.gov.in/hcservices/ the circumstances, the learned Single Judge has erred in coming tothe conclusion that there was no challenge to the auction held on11.8.2005; that the report filed by the official liquidator would goto show that no consultation whatsoever had been undertaken either bythe DRT or the secured creditor; that there was no consultation atall, and hence the auction would not bind the first respondent; thatit is pertinent to note that only one person participated in theauction namely Subhash Katuria of the third respondent; that theprice of Rs.10.25 crores was grossly undervalued considering theGovernment Gazette value namely Rs.57.25 crores; that there was noproper valuation at all; that apart from that, there was no properinformation to the public on the proposed auction, and hence theorder of the learned Single Judge has got to be set aside and theauction sale be set aside.5.The learned Counsel Mr.Sathish Parasaran appearing for theappellant in OSA No.82 of 2009 would submit that the auctionproceedings were challenged not by one party but by several othersincluding the Official Liquidator, Workers' Union, CentralWarehousing Corporation and the appellant herein; that the auctionitself was hurriedly and irregularly conducted by the RecoveryOfficer during the pendency of the above proceedings; that thevaluation report and the inventory report were prepared withoutnotice to or involvement of the Official Liquidator; that the saidvaluation was imaginary; that the impugned order is vitiated in viewof the pendency of the appeals before the DRT challenging theauction; that it is pertinent to note that both the conduct of theauction sale and its confirmation by the Recovery Officer himself andthe illegality of the auction were yet to be determined by the DRT inthe appeal preferred by the appellant; that the orders of theRecovery Officer were passed subsequent to the winding up orderpassed by the Company Court; that the auction is clearly violative ofthe earlier directions of this Court issued on 10.3.2000; that nonotice of proclamation of sale was served on the official liquidator;that the Recovery Officer rejected the objection memo dated 30.9.2004filed by the official liquidator in a casual manner and withoutassigning any cogent reasons; that it is pertinent to note that asper Section 456 of the Companies Act, all the properties of a companyin liquidation shall be deemed to be in the custody of the HighCourt; that the Official Liquidator has to safeguard the interest ofthe workmen, preferential creditors and other credits in accordancewith law; that in the instant case, the Recovery Officer has actedagainst law and in a manner detrimental to the interest of theworkmen, Government and other creditors of the second respondent, andhence the order of the learned Single Judge has got to be set aside.6.The learned Senior Counsel Mr.T.K.Seshadri, appearing for thefirst respondent successful bidder put forth the very samecontentions in sustaining the order of the learned Single Judge.7.This Court also heard the learned Senior CounselMr.AR.L.Sundaresan appearing on behalf of the Official Liquidator andalso the learned Counsel Mr.R.Ravichandran for the second respondentbank. https://hcservices.ecourts.gov.in/hcservices/

8.As could be seen above, by an order dated 16.9.1999 made in CPNos.170/95 and 35/97 by this Court one M/s.Deve Sugars Limited wasordered to be wound up, and the Official Liquidator attached to thisCourt, was appointed as the Official Liquidator of the company withdirections to take charge of all the assets and effects of thecompany in liquidation. The Official Liquidator accordingly tookpossession of the assets of the company situated at Harige, ShimogaDistrict, Karnataka State, on 28.9.1999 in the presence of the DeputyCommissioner, Shimoga and the Chief Manager of the State Bank ofMysore, one of the secured creditors of the company. Due to thedefault in payment of the outstanding dues, the State Bank of Mysore,the second respondent herein, filed OA 440 of 1997 before the DebtRecovery Tribunal, Bangalore, whereby a decree was granted againstthe company in liquidation to pay a sum of Rs.22,31,78,558.55.Pursuant to the grant of the application and also the certificate,the Recovery Officer issued an order under Rule 38 and Rule 52(2) ofthe second schedule to the Income Tax Act, 1961 and brought theproperty owned by the company in liquidation for sale. It cannot bedisputed that when the immovable property of the company underliquidation was brought for sale, it stood vested with the OfficialLiquidator appointed by the Court and in respect of which he has alsotaken possession. It is pertinent to note that in C.A.Nos.1251 to1253 of 1999 filed at the instance of the State Bank of Mysoreseeking leave to the petitioner bank to proceed and prosecute furtherO.A.No.440 of 1997 filed by them against the respondent company inthe Debt Recovery Tribunal at Bangalore, the Court made the followingorder:"Leave is granted subject to the condition that theOfficial Liquidator is impleaded and no coercive stepsagainst the assets of the company during or after theconclusion of the proceedings before the Tribunal."9.Now, at this juncture it is pertinent to point out that theabove order was never varied, altered or set aside. Pursuant to thesaid order, the Official Liquidator was also made as a party inC.A.No.440/97. He has put forth his objections. There is nothing toindicate that any of his objections were considered by the RecoveryOfficer at any point of time. It remains to be stated that avaluation report was prepared on 24.3.2003, and an inventory reportwas also prepared on 25.11.2004 in respect of the company underwinding up. But, no material was placed before the Court to indicatethat any notice was given to the Official Liquidator before makingvaluation of the property. During the relevant time, as pointed outearlier, the entire assets of the company under liquidation was inthe exclusive custody and possession of the Official Liquidator. Itshould be further added that the premises was actually kept under theseal of the Official Liquidator. It is a matter of surprise to notethat how the property in the person and exclusive custody of theOfficial Liquidator could be valued and inventory could be taken evenwithout a notice to him and in his absence and that too when thepremises is kept under his seal. It would be indicative of the factthat the valuation and inventory report could have been preparedhastily. Hence those reports could not reflect the real and actualvalue of the property brought for sale. A memo was filed by theOfficial Liquidator on 30.9.2004 itself notifying that he has taken https://hcservices.ecourts.gov.in/hcservices/ possession of the property of the company in liquidation on 28.9.1999itself and requesting that the sale fixed on 1.10.2004 could bedeferred. He has also asked for conduct of the sale of the propertyjointly. Even the valuation of the property at this juncture can becommented as not only improper and incorrect, but also imaginary. 10.While the proceedings were pending in the hands of theRecovery Officer, W.P.No.37991 of 2004 was filed by Tungabhadra SugarWorks Mazdoor Sangha, a Trade Union and others before the High Courtof Judicature at Karnataka whereby the petitioners thereincomplaining that the Official Liquidator who was the custodian of theproperty belonging to the company under liquidation failed to protectthe company and property of the company under liquidation and hencethe auction sale in favour of the third respondent herein namelyAnitha International, was null and void and also for a mandamusdirecting the Recovery Officer not to hand over possession. Thefollowing part of the judgment of the Karnataka High Court in WPNos.26564/2005 and 37991/2004 runs as follows:"16...It is not in dispute that the official liquidator hadfiled objections to the proclamation of sale. The saidobjections was rejected by the Recovery Officer. It isuseful to extract the observation made by the RecoveryOfficer while rejecting the objections of the officialliquidator."While issuing order of proclamation of sale, Iconsidered the memo dated 30.9.04 filed by theOfficial Liquidator, appointed by the Hon'ble HighCourt of Chennai, on 01.10.04. The contentionsraised therein are in total contrast to theprovisions contained in the Second Schedule to theIncome Tax Act as well as the CertificateProceedings. Recovery Officer has to get guidedby the provisions made under S.29 as well as S.19(19) of RDDB Act, 1993. Also the guidelines laiddown by the Hon'ble Supreme Court of India inCivil Appeal No.2536 of 2000 between AllahabadBank and Canara Bank, codifying the jurisdictionof Recovery Officer as "exclusive" and itsdirection to the matter of distribution of saleproceeds (para 50) shall be followed in this case.Hence the contentions of the Official Liquidatorare rejected and disposed off as against theprinciples codified by Hon'ble Supreme Court ofIndia."17.A perusal of the order which is cryptic would give aclear indication that the Recovery Officer has not appliedhis mind at all to the contentions raised by the officialliquidator. It is no doubt true that the officialliquidator is not before this court. But that by itselfdoes not necessarily mean that the order of rejecting theobjections of the official liquidator can be sustained.The other objector before the Recovery Officer is thepetitioner in the companion writ petition i.e., workersunion in respect of their dues from the second respondentcompany... 18.A perusal of the proceedings before the Recovery Officer https://hcservices.ecourts.gov.in/hcservices/ would disclose that the objections of the officialliquidator as well as of the workers union has beenrejected and that has been done in a casual andlackadaisical manner."11.It is brought to the notice of the Court that the recoveryofficer has issued paper publication in respect of the inspection ofthe properties of the company under winding up by intendingpurchasers by auction sale scheduled on 11.8.2005 just on theprevious day of the auction namely 10.8.2005. Even on the day ofpaper publication, the recovery officer has registered only twobidders and has closed the registration very day. It is contended bythe appellants' side that though there were two bidders by name, inreality they were one and the same, the Sale Proprietor of AnithaInternational, Subhash Kathuria, and hence the auction and thebidding among two bidders were simply a farce. This Court is able tosee that the auction sale was hurriedly conducted by the RecoveryOfficer, and that too pending the proceedings, and the same wassubject to the outcome of the proceedings. The recovery officer hasalso affirmed the sale on 12.9.2005. He could not plead no knowledgeof the pendency of the proceedings. At this juncture, it becomesnecessary to indicate that this Court by order dated 10.3.2000 inC.A.Nos.1251 to 1253/99 made by the State Bank of Mysore, grantedleave to proceed and prosecute the petition in O.A.No.440/97 pendingon the file of the Debt Recovery Tribunal, Bangalore, subject to thecondition that the Official Liquidator was to be impleaded and thereshall be no coercive steps against the assets of the company duringor after the conclusion of the proceedings before the Tribunal. Thevery reading of the order would make it explicit that the OfficialLiquidator should be made as a party to the proceedings since theentire assets of the company under liquidation was actually vestedwith the Official Liquidator appointed by this Court, and apart fromthat, it was also made clear that no coercive steps should beproceeded against the assets of the company during or after theconclusion of the proceedings before the Tribunal. In the face ofthe above order i.e., not to take any coercive steps against theassets of the company during or after the conclusion of theproceedings before the Tribunal, the secured creditor bank who wasthe applicant in the O.A., in the considered opinion of the Court,could not proceed against the assets of the company either bybringing the property for sale or otherwise. The said order hasbecome final. Needless to say it would be binding upon the creditorbank. The same was never varied or altered. Under suchcircumstances, the contention of the second respondent bank that theD.R.T. in exercise of its powers can bring the property for sale, andit has sold the same by public auction accordingly cannot becountenanced. 12.The contention put forth by the learned Counsel for thesecond respondent that the Official Liquidator filed C.A.No.854 of2006 seeking to set aside the auction sale made by the RecoveryOfficer, and the same has been dismissed on merits and if at all, theOfficial Liquidator can be the party really aggrieved by the order;but, he has not chosen to prefer an appeal cannot be countenanced.It is true that the Official Liquidator has not preferred an appeal.When C.A.No.854 of 2006 filed by him seeking to set aside the sale https://hcservices.ecourts.gov.in/hcservices/ was dismissed, it is pertinent to point out that he is shown as oneof the respondents in the appeals preferred by others, and hence hewas entitled to be heard. Apart from that, the property of thecompany under winding up stood vested in the hands of the OfficialLiquidator in order to satisfy the rights and interest of thecreditors of the company. Under such circumstances, as far as theofficial liquidator is concerned, as respondent he was entitled toput forth his case, and equally all other appellants can also beconsidered as parties aggrieved by the order of the learned SingleJudge dismissing the respective applications. 13.Much reliance was placed on the decision of the Apex Courtreported in 2000 (4) SCC 406 (ALLAHABAD BANK V. CANARA BANK). Atthis juncture, the learned Senior Counsel for the first respondentwould contend that the sale proceedings with regard to the assets ofthe company in liquidation will have to be continued only by the DRTand not by the Official Liquidator; that the Official Liquidator isto be consulted by the recovery officer while finalising the securedassets and for the purpose of distribution of sale proceeds; that ina given case where the recovery certificate was not issued by theDRT, but the proceedings for recovery of the debts were pendingbefore the DRT, the Official Liquidator cannot proceed and dispose ofthe immovable assets which were secured in favour of the banks andfinancial institutions; that once the recovery certificate was issuedby the DRT in favour of the banks and financial institutions who weresecured creditors, then the sale of the immovable properties cannotbe carried out by the Official Liquidator in a winding upproceedings, and such sale is to be conducted only by the RecoveryOfficer in execution of the recovery certificate issued by the DRT;that the recovery officer could sell the property but only afterissuing notice to the official liquidator and after hearing him; thatin the instant case, pursuant to the directions of the court, theofficial liquidator was made a party who has made his objections, andthe same was also considered and thereafter the recovery officer hasproceeded with the sale of the property; that to ensure properworking with the scheme under the SFC Act, it is necessary toassociate the Official Liquidator with the process of sale so that hecould ensure in the light of the directions of the Company Court thata proper price is fetched for the assets of the company inliquidation; that in the instant case, it cannot be disputed that theofficial liquidator was a party to the proceedings and his objectionswere taken; that Sec.446 of the Companies Act has no application inthe present case once RDB Act applies because Sec.34 expresslyenvisages over-riding effect to the provisions of 1993 Act; that RDBAct 1993 is a special law and hence would prevail over the generallaw in the Companies Act; that once the sale is confirmed by theRecovery Officer and the sale certificate was issued, it cannot bestated to be illegal or void; that sanctity should be attached to theauction sale conducted for recovery of the debts due to the banks andfinancial institutions; and that if such sales are disputed in courtsfor extraneous reasons, the intending purchasers would be forced tothink twice before participating in the auction sale as they are alsopurchasing litigation. 14.The learned Senior Counsel would conclude that law is settledby the Supreme Court that the secured creditor need not get any leave https://hcservices.ecourts.gov.in/hcservices/ from Company Court to proceed with the sale of the assets inliquidation and the official liquidator in the instant case was aparty, and notice has been issued to him by the secured creditor;that under the circumstances, the order of the Company Court dated10.3.2000, does not render the sale not binding on the company inliquidation; that the auction in question was not challenged by anyone; that the same was confirmed by the recovery officer on 12.9.2005and hence it has got to be affirmed.15.In support of the contentions put forth by the learnedCounsel for the appellants, they relied on two decisions of the ApexCourt reported in (2005) 8 SUPREME COURT CASES 190 (RAJASTHAN STATEFINANCIAL CORPN. AND ANOTHER V. OFFICIAL LIQUIDATOR AND ANOTHER) andin (2008) 7 SUPREME COURT CASES 738 (M.V.JANARDHAN REDDY V. VIJAYABANK AND OTHERS). 16.In order to solve the controversy, it would be more apt andappropriate to reproduce the relevant part of the judgments relied onby both the parties. In the decision reported in (2000) 4 SCC 406(ALLAHABAD BANK V. CANARA BANK), the Apex Court has held as follows:"21. In our opinion, the jurisdiction of the Tribunal inregard to adjudication is exclusive. The RDB Act requiresthe Tribunal alone to decide applications for recovery ofdebts due to banks or financial institutions. Once theTribunal passes an order that the debt is due, the Tribunalhas to issue a certificate under Section 19(22) [formerlyunder Section 19(7)] to the Recovery Officer for recoveryof the debt specified in the certificate. The questionarises as to the meaning of the word “recovery” in Section17 of the Act. It appears to us that basically the Tribunalis to adjudicate the liability of the defendant and then ithas to issue a certificate under Section 19(22). UnderSection 18, the jurisdiction of any other court orauthority which would otherwise have had jurisdiction butfor the provisions of the Act, is ousted and the power toadjudicate upon the liability is exclusively vested in theTribunal. (This exclusion does not however apply to thejurisdiction of the Supreme Court or of a High Courtexercising power under Articles 226 or 227 of theConstitution.) This is the effect of Sections 17 and 18 ofthe Act.22. We hold that the provisions of Sections 17 and 18 ofthe RDB Act are exclusive so far as the question ofadjudication of the liability of the defendant to theappellant Bank is concerned.(ii) Execution of certificate by Recovery Officer: is hisjurisdiction exclusive23. Even in regard to “execution”, the jurisdiction of theRecovery Officer is exclusive. Now a procedure has beenlaid down in the Act for recovery of the debt as per thecertificate issued by the Tribunal and this procedure iscontained in Chapter V of the Act and is covered bySections 25 to 30. It is not the intendment of the Act thatwhile the basic liability of the defendant is to be decided https://hcservices.ecourts.gov.in/hcservices/ by the Tribunal under Section 17, the banks/financialinstitutions should go to the civil court or the CompanyCourt or some other authority outside the Act for theactual realisation of the amount. The certificate grantedunder Section 19(22) has, in our opinion, to be executedonly by the Recovery Officer. No dual jurisdictions atdifferent stages are contemplated. Further, Section 34 ofthe Act gives overriding effect to the provisions of theRDB Act. That section reads as follows:“34. (1) Act to have overriding effect.—(1) Save asprovided under sub-section (2), the provisions of this Actshall have effect notwithstanding anything inconsistenttherewith contained in any other law for the time being inforce or in any instrument having effect by virtue of anylaw other than this Act.(2) The provisions of this Act or the rules made thereundershall be in addition to, and not in derogation of, theIndustrial Finance Corporation Act, 1948 (15 of 1948), theState Financial Corporations Act, 1951 (63 of 1951), theUnit Trust of India Act, 1963 (52 of 1963), the IndustrialReconstruction Bank of India Act, 1984 (62 of 1984) and theSick Industrial Companies (Special Provisions) Act, 1985 (1of 1986).”The provisions of Section 34(1) clearly state that the RDBAct overrides other laws to the extent of “inconsistency”.In our opinion, the prescription of an exclusive Tribunalboth for adjudication and execution is a procedure clearlyinconsistent with realisation of these debts in any othermanner.24. There is one more reason as to why it must be held thatthe jurisdiction of the Recovery Officer is exclusive. TheTiwari Committee which recommended the constitution of aSpecial Tribunal in 1981 for recovery of debts due to banksand financial institutions stated in its report that theexclusive jurisdiction of the Tribunal must relate not onlyin regard to the adjudication of the liability but also inregard to the execution proceedings. It stated in AnnexureXI of its report that all “execution proceedings” must betaken up only by the Special Tribunal under the Act. In ouropinion, in view of the special procedure for recoveryprescribed in Chapter V of the Act, and Section 34,execution of the certificate is also within the exclusivejurisdiction of the Recovery Officer.25. Thus, the adjudication of liability and the recovery ofthe amount by execution of the certificate are respectivelywithin the exclusive jurisdiction of the Tribunal and theRecovery Officer and no other court or authority much lessthe civil court or the Company Court can go into the saidquestions relating to the liability and the recoveryexcept as provided in the Act. Point 1 is decidedaccordingly.30. Learned Attorney General has, in this connection, https://hcservices.ecourts.gov.in/hcservices/ relied upon Damji Valji Shah v. LIC of India1 to contendthat for initiating and continuing proceedings under theRDB Act, no leave of the Company Court is necessary underSection 446. In that case, a Tribunal was constituted underthe Life Insurance Corporation Act, 1956. Question waswhether under Section 446 of the Companies Act, 1956, thesaid proceedings could be stayed and later be transferredto the Company Court and adjudicated in that Court. It washeld that the said proceedings could not be transferred.Section 15 of the Life Insurance Corporation Act, 1956 —which we may say, roughly corresponds to Section 17 of theRDB Act — enabled Life Insurance Corporation of India tofile a case before a Special Tribunal and recover variousamounts from the erstwhile life insurance companies incertain respects. Section 41 of the LIC Act conferredexclusive jurisdiction on the said Tribunal just likeSection 18 of the RDB Act, 1993. There the Company wasordered to be wound up by an order of the Company Courtpassed under Section 446(1) on 9-1-1959. The claim wasfiled by LIC against the Company and its Directors beforethe Tribunal in 1962. The respondents before the Tribunalcontended that the claim could not have been filed in theTribunal without the leave of the Company Court underSection 446(1). This Court rejected the said contention andheld that though the purpose of Section 446 was to enablethe Company Court to transfer proceedings to itself and todispose of the suit or proceedings so transferred, unlessthe Company Court had jurisdiction to decide the questionswhich were raised before the LIC Tribunal, there was nopurpose of requiring leave of the Company Court orpermitting transfer. It was held by this Court:“In view of Section 41 of the LIC Act, the Company Courthas no jurisdiction to entertain and adjudicate upon anymatter which the Tribunal is empowered to decide ordetermine under that Act. It is not disputed that theTribunal has jurisdiction under the Act to entertain anddecide matters raised in the petition filed by theCorporation under Section 15 of the LIC Act. It must followthat the consequential provisions of sub-section (1) ofSection 446 of the Companies Act will not operate on theproceedings which be pending before the Tribunal or whichmay be sought to be commenced before it. (emphasissupplied)Just as the Company Court was held incompetent to stay ortransfer and decide the claims made before the LIC Tribunalbecause the Company Court could not decide the claimsbefore the LIC Tribunal, the said Court cannot, in ourview, decide the claims of banks and financialinstitutions. On the same parity of reasoning as in DamjiValji Shah case1 there is no need for the appellant to seekleave of the Company Court to proceed with its claim beforethe Debts Recovery Tribunal or in respect of the executionproceedings before the Recovery Officer. Nor can they betransferred to the Company Court. https://hcservices.ecourts.gov.in/hcservices/

31. It may also be noticed that in the LIC Act of 1956,there was no provision like Section 34 of the RDB Actgiving overriding effect to the provisions of the LIC Act.Still this Court upheld the exclusive jurisdiction of theLIC Tribunal observing as follows:“[T]he provisions of the special Act, i.e., the LIC Actwill override the provisions of the general Act, viz., theCompanies Act which is an Act relating to companies ingeneral.”We are of the view that the appellant’s case under the RDBAct — with an additional section like Section 34 — is on astronger footing for holding that leave of the CompanyCourt is not necessary under Section 537 or under Section446 for the same reasons. If the jurisdiction of theTribunal is exclusive, the Company Court cannot also useits powers under Section 442 against the Tribunal/RecoveryOfficer. Thus, Sections 442, 446 and 537 cannot be appliedagainst the Tribunal.34. While it is true that the principle of purposiveinterpretation has been applied by the Supreme Court infavour of jurisdiction and powers of the Company Court inSudarsan Chits (I) Ltd. case3, and other cases the saidprinciple, in our view, cannot be invoked in the presentcase against the Debts Recovery Tribunal in view of thesuperior purpose of the RDB Act and the special provisionscontained therein. In our opinion, the very same principlementioned above equally applies to the Tribunal/RecoveryOfficer under the RDB Act, 1993 because the purpose of thesaid Act is something more important than the purpose ofSections 442, 446 and 537 of the Companies Act. It wasintended that there should be a speedy and summary remedyfor recovery of thousands of crores which were due to thebanks and to financial institutions, so that the delaysoccurring in winding-up proceedings could be avoided.38. At the same time, some High Courts have rightly heldthat the Companies Act is a general Act and does notprevail under the RDB Act. They have relied upon Union ofIndia v. India Fisheries (P) Ltd.4.40. Alternatively, the Companies Act, 1956 and the RDB Actcan both be treated as special laws, and the principle thatwhen there are two special laws, the latter will normallyprevail over the former if there is a provision in thelatter special Act giving it overriding effect, can also beapplied. Such a provision is there in the RDB Act, namely,Section 34. A similar situation arose in Maharashtra TubesLtd. v. State Industrial and Investment Corpn. ofMaharashtra Ltd.6 where there was inconsistency between twospecial laws, the Finance Corporation Act, 1951 and theSick Industries Companies (Special Provisions) Act, 1985.The latter contained Section 32 which gave overriding https://hcservices.ecourts.gov.in/hcservices/ effect to its provisions and was held to prevail over theformer. It was pointed out by Ahmadi, J. that both specialstatutes contained non obstante clauses but that the “1985 Act being a subsequent enactment, the non obstanteclause therein would ordinarily prevail over the nonobstante clause in Section 46-B of the 1951 Act unless itis found that the 1985 Act is a general statute and the1951 Act is a special one”. (SCC p. 157, para 9)Therefore, in view of Section 34 of the RDB Act, the saidAct overrides the Companies Act, to the extent there isanything inconsistent between the Acts.49. The decision of the Rajasthan High Court in RajasthanFinance Corpn. v. Official Liquidator16 relied upon for therespondent cannot be of any help. That was a case whichconcerned itself with the State Finance Corporation Act,1951. Section 537 of the Companies Act was applied and itwas held that the Companies Act did not yield to theprovisions of the State Finance Corporation Act, 1951.There was no provision in the State Finance CorporationAct, 1951 like Section 34 which gave overriding effect toits provisions.50. For the aforesaid reasons, we hold that at the stage ofadjudication under Section 17 and execution of thecertificate under Section 25 etc. the provisions of the RDBAct, 1993 confer exclusive jurisdiction on the Tribunal andthe Recovery Officer in respect of debts payable to banksand financial institutions and there can be no interferenceby the Company Court under Section 442 read with Section537 or under Section 446 of the Companies Act, 1956. Inrespect of the monies realised under the RDB Act, thequestion of priorities among the banks and financialinstitutions and other creditors can be decided only by theTribunal under the RDB Act and in accordance withSection 19(19) read with Section 529-A of the Companies Actand in no other manner. The provisions of the RDB Act, 1993are to the above extent inconsistent with the provisions ofthe Companies Act, 1956 and the latter Act has to yield tothe provisions of the former. This position holds goodduring the pendency of the winding-up petition against thedebtor Company and also after a winding-up order is passed.No leave of the Company Court is necessary for initiatingor continuing the proceedings under the RDB Act, 1993.Points 2 and 3 are decided accordingly in favour of theappellant and against the respondents."17.Following the above judgment of the Apex Court, the learnedSingle Judge has agreed with the contentions of the second respondentbank to hold that the sale has become final since it has already beenconfirmed by the recovery officer, and the sale has become completeand absolute and hence the auction purchaser was entitled to takepossession of the property. https://hcservices.ecourts.gov.in/hcservices/

18.The Apex Court in a judgment rendered in (2008) 7 SCC 738(M.V.JANARDHAN REDDY V. VIJAYA BANK AND OTHERS) had an occasion toconsider an identical situation as found in the instant case, and itbecomes necessary to reproduce the following paragraphs in thejudgment which would speak of the factual position that took place inthat case. "3.. To appreciate the controversy raised in the presentappeal, few relevant facts may be stated:Vijaya Bank, Respondent 1 herein (“the Bank”, for short)filed Original Suit No. 57 of 1989 in the Court ofSubordinate Judge, Bhongir against M/s Kran OrganicsChemicals (P) Ltd. (in liquidation) (“the Company”, forshort) for recovery of Rs.94,50,524 as also another suitbeing Original Suit No. 61 of 1989 in the same court forrecovery of Rs.6,43,962. Both the suits were decreed by acommon judgment dated 24-7-1993. The Bank filed executionapplications which were transferred to the Debts RecoveryTribunal on establishment of the Tribunal under theRecovery of Debts Due to Banks and Financial InstitutionsAct, 1993. Recovery certificates were issued in favour ofthe Bank and the Bank was allowed to execute the decree.4. Since the matter was pending in the Company Court andthe Official Liquidator was appointed, the Bank made anapplication, being Company Application No. 219 of 1996 inCompany Petition No. 18 of 1990 in accordance with theprovisions of Section 446 of the Companies Act, 1956(hereinafter referred to as “the Act”) read with Rule 117of the Companies (Court) Rules, 1959 (hereinafter referredto as “the Rules”) for granting leave to proceed with thesale of the property of the Company.5. The Company Court vide its order dated 13-8-1999 grantedthe permission.6. The Bank then took steps for sale of land and buildingof the Company. It got valuation report from approvedvaluer, assessed market value and realisable value,submitted copies of judgment, recovery certificate andvaluation report, etc. to the Official Liquidator. It madean application being Company Application No. 187 of 2005 tothe Company Court under Sections 446 and 457 of the Actread with Rule 9 of the Rules praying for acceptance of thevaluation report and permit the Bank to sell the propertyby conducting auction through Recovery Officer, DebtsRecovery Tribunal, Hyderabad.7. On 2-2-2005, the Bank published a notice fixing date ofsale as 13-3-2005. A public notice was issued in Vaartha on9-2-2005. Reserve price was fixed at Rs.45 lakhs. Nobidder, however, came forward and auction could not beeffected. Same thing was repeated in auction-salesscheduled to be held on 29-5-2005, 8-7-2005 and 14-9-2005.In an auction held on 19-12-2005, the appellant had offeredRs.67.50 lakhs which was the highest bid and it wasaccepted. The Bank made an application in January 2006 https://hcservices.ecourts.gov.in/hcservices/ being Company Application No. 73 of 2006 requesting theCompany Court to allow the Recovery Officer of the Tribunalto confirm the sale in favour of the appellant and topermit him to issue sale certificate. On 13-2-2006, theRecovery Officer confirmed the sale. It was stated in thesaid order that the purchasers had purchased the propertyfor a sum of Rs.67,50,000 at a public auction held on 19-12-2005. Full amount of the sale consideration was paid on3-1-2006. It was then stated:“Accordingly, the said sale is hereby confirmed.”8. According to the appellant, on 23-2-2006, the OfficialLiquidator submitted a report to the Hon’ble Court whereinhe also stated that there was no impediment in confirmingthe sale. Sale certificate was issued in favour of theappellant on 2-3-2006. The sale was registered on 16-3-2006. On 17-3-2006, however, the Company Judge set asidethe sale without issuing notice and without affording anopportunity of hearing to the appellant observing that thesale was not properly conducted and was confirmed withoutan order from the court. The sale was, therefore, setaside.9. It appears that an application was made by the appellantto recall the said order. Meanwhile, the Company Judgeissued direction to the Official Liquidator to sell theproperty. Notice was issued by the Official Liquidator forsale of property. The appellant, however, approached theDivision Bench of the High Court by filing Original SideAppeal No. 28 of 2006 complaining that an order passed bythe Company Judge setting aside the sale was illegal,unlawful, violative of principles of natural justice andfair play inasmuch as no notice was issued and noopportunity of hearing was afforded before passing the saidorder which adversely affected the appellant. The DivisionBench upheld the contention of the appellant, allowed theappeal filed by him and set aside the order passed by theCompany Judge. The matter was again ordered to be placedbefore the learned Company Judge for passing an appropriateorder in accordance with law.10. The learned Company Judge, thereafter, heard theparties and by an order dated 8-9-2006 set aside the salewhich was in favour of the appellant and ordered that theamount deposited by the appellant be refunded to him. Theappellant approached the Division Bench of the High Courtbut the Division Bench also dismissed the appeal. The saidorder is challenged in the present appeal.11. On 12-2-2007 notice was issued by this Court. Thematter thereafter appeared on the board from time to time.Status quo was also granted. Parties were permitted to filereplies and a direction was issued to the Registry to placethe matter for final hearing on a non-miscellaneous day andthat is how the matter has been placed before us." https://hcservices.ecourts.gov.in/hcservices/

19.As regards the above case which was in the hands of TheirLordships of the Supreme Court, it is necessary to mention thefollowing which were available in the factual position of that case. (a) Pursuant to a common judgment in the year 1993, directingthe company in liquidation to make payment of Rs.6,43,962/- to thecreditor company, the secured creditor filed execution applicationwhich was transferred to the recovery tribunal constituted under theRDB Act. The recovery certificates were issued in favour of thebank, and the bank was allowed to execute the decree. Since thematter was pending in the company court and the official liquidatorwas also appointed, the bank made an application before the companycourt for getting leave to proceed with the sale of the properties ofthe company. On the permission granted by the company court, thebank took steps for sale of the building of the company. It placedthe recovery certificate and the valuation report etc., to theofficial liquidator and also made an application before the companycourt under Sections 446 and 457 of the Act read with Rule 9 of theRules praying for acceptance of the valuation report and to permitthe bank to sell the property by conducting auction through theRecovery Officer, Debt Recovery Tribunal, Hyderabad. The bank gavenotice through publication fixing the date of sale, and the reserveprice was also fixed. Since there was no bidder, the same procedurewas followed again for the auction sale scheduled to be held ondifferent dates. In an auction held on 19.12.2005, the appellanttherein has offered Rs.67.50 lakhs which was the highest bid on thatday, and the bank has also accepted the same. The bank made anotherapplication before the company court requesting to allow the recoveryofficer to confirm the sale in favour of the appellant therein and topermit him to issue the sale certificate. Accordingly, the recoveryofficer confirmed the sale. The Official Liquidator also filed areport before the company court that there was no impediment forconfirming the sale. A sale certificate was also issued in favour ofthe appellant therein, and the same was also registered. But, thelearned Company Judge set aside the sale since, in his opinion, thesale was not properly conducted and confirmed without the order ofthe court. (b) In an appeal made by the appellant before the DivisionBench, the said order was originally set aside stating that no properopportunity was given to the appellant. The learned Company Judgetook up the matter for the second time and after hearing both sides,took the view that the sale was to be set aside and ordered theamount deposited by the appellant to be refunded to him. Aggrievedappellant took the matter before the Division Bench. The DivisionBench dismissed the appeal. Under such circumstances, the matter camebefore the Supreme Court.20.At this juncture, it is pertinent to point out that as foundin the case reported in (2008) 7 SCC 738 referred to above, thesecond respondent bank in the instant case, sought for leave toproceed with the sale of the property of the company. The companycourt made an order on 10.3.2000 as referred to above, grantingpermission on condition that the official liquidator must be made aparty, and apart from that, the secured creditor should not adoptcoercive process against the assets of the company during or afterthe conclusion of the proceedings before the Tribunal. Needless to https://hcservices.ecourts.gov.in/hcservices/ say the sale of the property cannot but be a coercive process forrecovery of the amount. In the considered opinion of the Court, thecase of the appellants in this case, is on a better footing for thereasons that in the case referred to above namely (2008) 7 SCC 738,though the matter was pending before the DRT and also the recoveryofficer, the valuation report was filed along with the recoverycertificate before the official liquidator. An application was alsofiled before the company court seeking permission to sell theproperty by conducting auction through the Recovery Officer, DRT.But, in the instant case, no one of the above procedures wasfollowed. On the contrary, even the objections made by the officialliquidator, who was a party to the recovery proceedings, was not eventaken for consideration. The recovery officer did not even care toconsider the same which necessitated the learned Single Judge of theKarnataka High Court to make a comment that it has been done in acasual and lackadaisical manner. In the case before the Apex Courtas referred to above, it was contended by the appellant therein thatthe auction was held in accordance with law by the authorities andupset price was fixed, and the appellant was the highest bidder, andthe same was accepted, and the entire amount was paid, and then thesale was confirmed, and hence it could not be interfered with and setaside by the Court as urged by the learned Senior Counsel for thefirst respondent in the instant case. It was contended by therespondent's side in that case that the recovery officer had nopower, authority or jurisdiction to confirm the sale, and order ofconfirming the sale made by him was therefore without power orauthority, and apart from that, company proceedings were pendingbefore the company court since the company was ordered to be wound upand the official liquidator appointed was in charge of the assets ofthe company, and he was not taken in confidence nor was he associatedwith the auction of assets and properties of the company inliquidation and hence the action taken by the recovery officer wascontrary to law. The very same contentions are now raised by theappellants in the instant case. It is pertinent to point out that inthe case referred to above, the official liquidator has expressedthat since he was not associated with the proceedings of sale, he hadno comments to offer. But, in the case on hand, the officialliquidator has raised all his objections before the recovery officerand that too before the confirmation of the sale, and he has alsofiled a detailed report expressing his surprise that when theproperty was in his possession and under his seal, lock and key howthe immovable property was valued and also the inventory was taken.It would be more apt and appropriate to reproduce the followingparagraph of the judgment of Their Lordships of the Apex Courtreported in (2008) 7 SCC 738 which in the considered opinion of theCourt would directly apply to the present facts of the case. "21.Having heard the learned Counsel for the parties andhaving given anxious consideration to the facts andcircumstances in their entirety, in our opinion, it cannotbe said that by setting aside sale, either the learnedCompany Judge or the Division Bench has committed anyillegality which deserves interference in exercise ofdiscretionary power under Article 136 of the Constitution."21.At the risk of repetition, the Court has to reproduce theorder of the company court dated 10.3.2000 which reads as follows: https://hcservices.ecourts.gov.in/hcservices/ "Leave is granted subject to the condition that theOfficial Liquidator is impleaded and no coercive stepsagainst the assets of the company during or after theconclusion of the proceedings before the Tribunal."22.The second respondent bank having applied to the companycourt and obtained an order as above, cannot ignore the same. Suchan order would be binding on the recovery officer also. It makesabundantly clear that the assets of the company should not beproceeded with by exercise of coercive process which would includethe sale of the property by auction. Hence it is not open to therecovery officer either to conduct the sale or confirm the same sinceit was in clear violation and inconsistent with the order of thecompany court made on 10.3.2000. The second respondent bank cannottake advantage of the confirmation of the sale by the recoveryofficer who, in the considered opinion of the court, has acted inviolation of the orders of this court and did not possess power toconfirm the same. The Apex Court has held in paragraph 28 of thesaid judgment ((2008) 7 SCC 738) that in our opinion the companycourt was right in passing the fresh order after hearing the parties,and since the company was in liquidation and the official liquidatorwas in charge of the assets of the company, he ought to have beenassociated with the auction proceedings which was not done. But, inthe case on hand, he was not allowed to be associated, and even thevaluation of the assets were taken without his knowledge and also theobjections raised by him were rejected. Following the decision ofthe Apex Court referred to above, the Court without any hesitationhas to set aside the sale. 23.Speaking of the necessity of the association of the officialliquidator in the process of sale, the Apex Court in a judgmentreported in (2005) 8 SCC 190 has held thus:"After all, the Liquidator represents the entire body ofcreditors and also holds a right on behalf of the workersto have a distribution pari passu with the securedcreditors and the duty for further distribution of theproceeds on the basis of the preferences contained inSection 530 of the Companies Act under the directions ofthe Company Court. In other words, the distribution ofthe sale proceeds under the direction of the Company Courtis his responsibility. To ensure the proper working outof the scheme of distribution, it is necessary toassociate the Official Liquidator with the process of saleso that he can ensure, in the light of the directions ofthe Company Court, that a proper price is fetched for theassets of the company-in-liquidation. It was in thatcontext that the rights of the Official Liquidator werediscussed in International Coach Builders Ltd. The DebtsRecovery Tribunal and the District Court entertaining anapplication under Section 31 of the SFC Act should issuenotice to the Liquidator and hear him before ordering asale, as the representative of the creditors in general."24.In view of the above position of law laid down by the ApexCourt, the sale by the recovery officer and subsequent confirmationhave got to be set aside in view of the non-association of the https://hcservices.ecourts.gov.in/hcservices/ official liquidator in the process of sale which would ensure aproper price for the assets of the company in order to safeguard theinterest of all creditors secured and unsecured and also the worker'sunion, and also it was in violation of the order of the company courtreferred to above.25.Hence, the following judgment is made:(i)The auction sale in question is set aside;(ii)The auction purchaser is entitled to refund of the moniespaid by him towards the auction sale which is now set aside;(iii)In the interest of all the creditors and also the workers'union, a fresh sale is ordered to be made by the Recovery Officerafter following the procedural formalities and after preparation of afresh valuation done by the panel of valuers appointed by the CompanyCourt with the association of the official liquidator and onacceptance of the same by the Company Court in order to ensure aproper price is fetched for the assets of the company in liquidation.26.In the result, all these original side appeals are allowed,setting aside the order of the learned Single Judge and leaving theparties to bear their costs. Consequently connected MPs are closed.NsvSd/-Asst. Registrar//True Copy//Sub Asst. RegistrarToThe Sub Assistant Registrar,Original Side, High Court,Madras.104.+8 ccs to Mr.P.B.Ramanujam, Advocate SR Nos.47939 to 47946+1 cc to Mr. Sathish Parasaran, Advocate SR No.48225+1 cc to Mr.R. Ravichandran, Advocate SR No.48325+2 ccs to Mr.G.Ramapriya, Advocate SR No.48142+2 ccs to Mr.H.Karthik Seshadri, Advocate SR No.48141OSA Nos.59 to 63, 76, 77and 82 of 2009MG, BV(CO)SR/30.9.2009