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2011 Supreme(Del) 575
IN THE HIGH COURT OF DELHI
Vikramajit Sen and Siddharth Mridul, JJ.
Gupta Refractories
Vs.
Consolidated Steels and Alloys Ltd. And Others
CO. APP. 21/2009
Decided On: 05.09.2011
The judgment established the distinction between movable and immovable property and relied on legal principles to determine the nature of the property purchased at auction.
Headnote:
SICA - Winding up of Company - Section 15(1), Section 16, Section 20 - The court discussed the winding up of the company under Section 20 of SICA, the auction of movable assets, and the distinction between movable and immovable property. The court relied on the judgments in Duncans Industries Ltd. Vs. State of U.P. & Ors., 1999 X AD (S.C.) 225 : (2000) 1 SCC 633 and M/s T.T.G. Industries Ltd. Madras Vs. Collector of Central Excise, Raipur, 2004 VII AD (S.C.) 497 : (2004) 4 SCC 751 to determine the nature of the property.
Fact of the Case:
The Company in liquidation filed a reference under Section 15(1) of SICA before BIFR, which concluded that the company should be wound up under Section 20 of SICA. The auction of the company's movable assets led to disputes between the appellant and MPFC.
Finding of the Court:
The court found that the appellant's claim of purchasing all the plant and machinery of the company in liquidation was contradicted by their own statements in earlier proceedings. The court also determined that the machinery, plant, and sheds at the factory site, except those not attached to the earth, constituted movable property purchased by the appellant.
Issues: The issues included the nature of the property purchased at auction, the distinction between movable and immovable property, and the appellant's claim of purchasing all the plant and machinery of the company in liquidation.
Ratio Decidendi: The court relied on the judgments in Duncans Industries Ltd. Vs. State of U.P. & Ors., 1999 X AD (S.C.) 225 : (2000) 1 SCC 633 and M/s T.T.G. Industries Ltd. Madras Vs. Collector of Central Excise, Raipur, 2004 VII AD (S.C.) 497 : (2004) 4 SCC 751 to determine the nature of the property and concluded that the machinery, plant, and sheds at the factory site, except those not attached to the earth, constituted movable property purchased by the appellant.
Final Decision: The court dismissed the appeal, finding no merit in the appellant's claim.
Siddharth Mridul, J.
1. The present Appeal assails the Order of the learned Company Judge dated 7th November, 2008 whereby the application of the Appellant being C.A. No. 385/2007 was dismissed.
2. The facts as are relevant for the disposal of the present Appeal are as follows:
(a) The Company in liquidation, Respondent No. 1 herein, filed a reference under Section 15(1) of SICA before BIFR being Case No. 62/1989. The BIFR after conducting an enquiry under Section 16 of SICA concluded that it would be just, equitable and in the public interest that the Company in liquidation is wound up under Section 20 of SICA vide order dated 13th January, 1998. The Appeal filed against the said final order of BIFR was dismissed by AAIFR on 28th May, 1999.
(b) A Company Petition being C.P. No. 25/1998 was registered in this Court in terms of the order dated 13th January, 1998 passed by the BIFR. Further, a winding up petition was also filed by M/s Rameshwar Dass Devi Dayal against the Company in liquidation being C.P. No. 428/2002. Vide its order dated 13th September, 2004, the said winding up petition was admitted by this Court and a Provisional Liquidator was appointed. This Court vide order dated 4th April, 2005 passed the final winding up order in respect of the Company in liquidation and appointed the Official Liquidator as the Liquidator of the Company.
(c) It transpires that while the matter was pending consideration in this Court in C.P. No. 25/1998, but before passing of the order dated 13th September, 2004 in C.P. No. 428/2002, the Tehsildar and Recovery Officer, District-Morena (Madhya Pradesh) issued a proclamation for sale of the property of the Company under Section 147-C of the Madhya Pradesh Land Revenue (Code), 1959. The said proclamation was published in the daily newspaper Dainik Bhaskar on 26th June, 2001. By this proclamation the assets of the Company, which had been attached, were sought to be sold for recovery of 1,82,30,677/- on account of electricity dues owed to Madhya Pradesh Electricity Board, as arrears of land revenue.
(d) The Collector and Tehsildar, District-Morena fixed the auction for sale of assets of the Company on 24th July, 2001 in terms of the aforesaid proclamation. When the Madhya Pradesh Financial Corporation (hereinafter referred to as 'MPFC'), Respondent No. 2 herein,' learnt of the aforesaid proclamation, it objected to the proposed auction before the Tehsildar, Recovery Officer, Morena by filing objections dated 25th July, 2001. Although the auction scheduled for 24th July, 2001 was postponed till 26th July, 2001, the objections filed by MPFC were rejected. Thereafter the auction proceedings were held on 26th July, 2001, wherein the Tehsildar in his proceedings recorded that the property of the Company in liquidation was offered for inspection to 17 persons attending the auction. The estimated value of the property sold and auctioned had been previously assessed by M/s A.K. Pathak & Associates at 47,08,800/-. In the circumstances, the minimum bid was fixed at 35 lakhs.
(e) The Appellant herein submitted the highest bid at 52 lakhs and on being declared as the highest bidder, deposited a sum of 39 lakhs with the Tehsildar and Collector in accordance with law. Thereafter, the whole amount of 52 lakhs was deposited by the Appellant with the Collector. The Collector vide its letter dated 12th February, 2002 requested the Appellant to take delivery of the movable property of the Company (except the land, building and the permanent construction on the land) lying at the premises.
(f) After the receipt of the aforesaid letter from the Office of the Collector, the movable goods lying at the factory of the Company were delivered to the Appellant from 12th February, 2002 to 25th February, 2002. After the said movable property was sold in favour of the Appellant, MPFC filed a writ petition being W.P. No. 325/2002 in the Madhya Pradesh High Court, whereby MPFC claimed to have the first charge on the said goo
