Court clarified that post-liquidation, property possession must be secured legally; unauthorized dispossession is not permitted, aligning with principles of due process.

ORDER :

N.S. SANJAY GOWDA, J.

1. The facts leading to the filing of the above appeal are as follows:

(1) M/s. Aryodaya Spinning & Weaving Mills Company Limited was ordered to be wound up by this Court in Company Petition No.33 of 1983 under an order dated5.5.1989 and the Official Liquidator was appointed to liquidate the assets of the company.

(2) The Official Liquidator had issued eviction notices to the persons who were in occupation of a portion of the property belonging to the company and in response, the occupants had filed Company Application No.441 of 2009. However, this Court passed an order on 3.12.2009 in the following terms:

“1. Official Liquidator submits that the notices are issued for ascertaining the legal status and rights of the applicants and similarly situated persons who are admittedly on the property of the company under liquidation. The ultimate course of action, pursuant to the notice, would be strictly in accordance with the provisions of Section 456 of the Companies Act. The applicants have, therefore, right to approach the Liquidator with their response and reply to the notice and further action thereupon would be in accordance with Section 456 of the Companies Act.

2. In view of this, Shri MK Vakharia, learned advocate seeks permission to withdraw this Company Application at this stage. Permission as sought for is granted. Application is disposed of as withdrawn. Notice discharged.”

(3) The Official Liquidator presented a report in OLR No.35 of 2018 in Company Application No.112 of 2013 putting on record the events pursuant to the advertisement given for sale of the company’s properties and informed the Court that he did not receive any offer from any intending purchaser. This Court on consideration of the said report, passed an order on 12.4.2018, in the following terms:

“1. The present report is filed to take on record the facts that in response to the advertisement given by the Official Liquidator for sale of the company’s properties, the Official Liquidator has not received any offer from any intending purchaser upto last date of receipt of the tender and with further prayer to permit the Official Liquidator to call a meeting of the sale committee to discuss and decide to take further course of action to sell the land of the company in liquidation.

2. As stated in the report, the Court ordered to fix reduced upset price and EMD as recommended by the sale committee for sale of the company’s properties. However, despite fixation of reduced upset price, nobody came forward to bid for the company’s properties in response to the advertisement given by the Official Liquidator for sale of the company’s properties.

3. The Official Liquidator submitted that it appears that because of the encroachment on the land of the company in liquidation, nobody wants to take risk or chance to purchase the company’s properties with encroachment thereon. He submitted that the Court may presently take note of the facts stated in the report so as to permit him to call the meeting of the sale committee to take further course of action for sale of the company's properties.

4. In view of the above, the prayers contained in Paragraph No.8 are granted. However, the Court finds it appropriate to direct the Official Liquidator to take immediate steps for removal of encroachment from the land of the company in liquidation. The Official Liquidator shall make report on the action taken by him for removal of the encroachment from the land of the company in liquidation. It is observed that for the purpose of removal of the encroachment on the land of the company in liquidation, if the Off