The court has the discretion to sell the assets of a company in liquidation by private treaty instead of public auction, particularly when the sale by private treaty is in the public interest and when the ex-management is opposing the sale and is motivated by a desire to destroy the industry.

( 1 ) THIS matter involves a question of considerable public importance relating to the principle and procedure for the sale of the assets of a company in liquidation : Whether the only object of such sale is to fetch the maximum price or whether the court, at its discretion, having regard to the prevailing socio-economic questions, which are involved in a welfare State like India, should apply the law in a pragmatic manner having regard to the realities and interest of the public.

( 2 ) IN this case, admittedly, due to mismanagement and misappropriation by the ex-management, the company was ultimately wound up by an order dated 20th of November, 1978, and the official liquidator took possession of the assets, books, papers and documents of the company, on the application of a partnership firm, M/s. Tea Land, of which one of the ex-directors of the company is a partner, for winding-up on a claim of Rs. 68,000, being Company Petition No. 389 of 1976. After the said winding-up petition was admitted, the company made an application for a scheme and obtained stay of the winding-up proceedings but, ultimately, the said scheme application was dismissed by an order dated 13th of June, 1978. Thereafter, the workers and employees of the company assisted the official liquidator to enable him to take possession of all the assets, books, papers and documents of the company but none of the ex-directors or the management assisted the official liquidator in doing so. It appears that a group of workers in order to revive the company formed a co-operative society and got it registered on the 17th of July, 1979, in the name of Elvoc Employees Co-operative Society Ltd. , hereinafter referred to as " the applicant-society ", and on the very same day they made an application before this court being Company Application No. 153 of 1979, for a lease or licence of the factory, godown as well as administrative and registered office of the company for a period of five years and also for other reliefs. The said application for grant of lease or licence of the applicant-society was resisted by the said petitioning-creditor, M/s. Tea Land, of which one of the ex-directors was a partner, and also Gurudev Industries Pvt. Ltd. , a sister concern of the company (now in liquidation), Elvoc Pvt. Ltd. , having common directors and ultimately, by an order dated 17th of September, 1979, made by me, a licence was granted in favour of the said applicant-society for a period of one year at the first instance with a clause for renewal of the same for a further one year until further orders of this court and the official liquidator was directed to execute a licence in a similar form as that of the licence which was granted in favour of a co-operative society in respect of running the Ganges Printing Ink Factory Ltd. (in liquidation) with necessary modifications. By an order dated 23rd of November, 1979, made by me, the said co-operative society was directed to pay a sum of Rs. 10,000 per annum or 50% of the profit, whichever was higher, to be paid in two instalments after the completion of the half yearly accounts, but, initially they had to advance Rs. 10,000. It is an admitted position that the said lease and/or licence was granted by the court solely for the purpose of the beneficial winding-up and to keep the company in a running condition so that it can be sold as such for the benefit of the creditors and contributories of the said Elvoc Pvt. Ltd. (in liquidation ). It appears that the said applicant-society has very successfully, with proper expertise and assistance of the Chloride India Ltd. and financial help from the Govt. of West Bengal and other financial institutions, made tremendous progress and revived the company and secured orders from the Central Govt. and State Govt. concerns, including railways, and also export contracts. They mainly manufacture battery chargers, battery eliminators and industrial voltage stabilisers and o