In exceptional circumstances, where all parties agree, the Court may direct the sale of suit properties during the pendency of the suit.

Headnote:
RECEIVERSHIP - SALE OF IMMOVABLE PROPERTY - COURT RECEIVER APPOINTED - SALE OF IMMOVABLE PROPERTY AND PLANT AND MACHINERY DIRECTED - SALE PROCEEDS TO BE INVESTED IN NATIONALISED BANK FOR ONE YEAR - NOTICE OF MOTION MADE ABSOLUTE.
Fact of the Case:

Plaintiffs, a bank, filed a suit against the defendants, a company and its directors and guarantors, for recovery of dues. The company was ordered to be wound up and the Official Liquidator was appointed as Liquidator. The Court Receiver was appointed as Receiver of the suit properties and was directed to appoint the company as agent to run the Mills. The company failed to act as agent and the Workers' Society was appointed as agent on certain terms and conditions. However, the Workers' Society also failed to comply with the terms and conditions and forfeited its right to act as agent. The plaintiffs filed a Notice of Motion seeking direction to the Court Receiver to sell the immovable property and plant and machinery.
Finding of the Court:

The Court found that it was not feasible to sell the Godown and Shopping Complex separately from the rest of the suit property. The Government had sanctioned Rs. 5 crores towards the share in the working capital of the company in 1990, but the amount was not released and had lapsed. The Workers' Society had failed to execute the agency agreement and had not deposited the yearly royalty as directed by the Court. The Court also noted that the Workers' Society had gone in appeal against the order directing the sale of the Shopping Complex and Godowns and had obtained a stay.
Issues: Whether the Court Receiver should be directed to sell the immovable property and plant and machinery.
Ratio Decidendi: The Court held that in the peculiar facts and circumstances of the case, where all the defendants were supporting the plaintiffs' Motion, it was in the interest of all concerned parties to allow the sale of the immovable property and plant and machinery. The Court directed the Court Receiver to sell the properties by public auction and invest the sale proceeds in a Nationalised Bank for one year.
Final Decision: The Court made the Notice of Motion absolute in terms of prayer Clause (a) of the Notice of Motion, except the bracketed portions, viz., "or private treaty" and "and pay over to the plaintiffs the net sale proceeds thereof in or towards the suit claim." Sale proceeds to be invested by the Court Receiver in the Nationalised Bank, initially for a period of one year.

JUDGMENT - Dr. PRATIBHA UPASANI, J.:---This Notice of Motion is taken out by the plaintiffs, praying that the Court Receiver, High Court, Bombay be directed to sell the immovable property described in Exhibit "A-1" to the plaint and the plant and machinery described in Exhibit "B" to the plaint with all powers under Order XL, Rule 1 of the Code of Civil Procedure, 1908 either by public auction or private treaty as the Court Receiver may deem fit and proper and pay over to the plaintiffs the net sale proceeds thereof in or towards the suit claim.

2.The suit is a usual bank suit, failed by the plaintiffs bank, namely, Central Bank of India, having its Heads Office at Nariman Point, Bombay and inter alia, having a Branch Office at Jalgaon, against the defendants for various reliefs which are usually claimed in a Bank suit. Defendant No. 1, The Khandesh Spinning Weaving Mills Co. Ltd., is a company registered under the Companies Act, having its registered office at Jalgoan and a Branch Office at Bombay. Defendant Nos. 2 to 5 are its Directors, while defendant Nos. 6, 7, and 8 are the guarantors, who have promised repayment of the loan availed by defendant No. 1 and granted by the plaintiffs Bank with respect to diverse credit facilities like Cash Credit Facility, Bills Discounting Facility, Working Capital Term Loan Facility etc.

3.It appears that by an order dated 9th September, 1984 in Company Petition No. 59 of 1984, the 1st defendant company was ordered to be wound up and Official Liquidator, High Court, Bombay was appointed as Liquidator. The plaintiffs were allowed to continue the above suit against defendant No. 1 under section 446 of the Companies Act, 1956 by bringing on record the Official Liquidator as Liquidator of the 1st defendant company. The total claim of the plaintiffs bank against defendant No. 1 is to the tune of Rs. 7,34,04,496.22.

4.In the affidavit in support of the Notice of Motion, the plaintiffs have narrated the chronology of relevant events. It is stated by them that by an ad-interim order dated 9th July 1984 passed by Mr. Pendse, J., (as he then was), Court Receiver, High Court, Bombay, was appointed Receiver of the suit immovable properties described in Exhibit "A-1" to the plaint, machineries, stocks etc. described in Exhibits "B, E, J, O, and S" to the plaint with all powers under Order XL, Rule 1 of the Code of Civil Procedure, 1908 with further directions to appoint defendant No. 1, namely The Khandesh Spinning Weaving Mills as agents of the Court Receiver for the purpose of running the Mills, provided defendant No. 1 agreed to act as agent of the Court Receiver on the terms and conditions to be settled by the Court Receiver.

5.Pursuant to this order, the Court Receiver took physical possession of all the movable and immovable suit properties of defendant No. 1 situated at Jalgaon, as the agency of running of Mills of the 1st defendant could not be materialised.

6.By subsequent order dated 1st August, 1995, passed by Mr. A.P. Shah, J., in Notice of Motion No. 894 of 1992, taken out by the Khandesh Mills Workers Industrial Co-operative Society Ltd., the Court Receiver was directed to appoint the said Workers' Society as his agent in respect of the factory premises and the machinery, on the yearly royalty of Rs. 69,00,000/-. The Court Receiver was directed not to insist for security. It was directed that the said Workers' Society would execute requisite agency agreement in favour of the Court Receiver and appropriate undertakings for safety of the factory and the machinery that may be directed by the Court Receiver. It was clarified in the said order that the Shopping Complex and the Godown would not be covered by the agency which would be restricted to main factory premises and the machinery.

7.It appears from the proceedings that the said Workers' Society, however, failed to execute the agency agreement in favour of the Court Receiver; Nor could it deposit with the Receiver, the yearly royalty of Rs

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