The court emphasized the importance of conducting a sale of property at its actual value and set aside the sale due to material irregularity, directing the Official Liquidator to publish a fresh proclamation of sale with an upset price of Rs. 3.5 crores.

The Travancore Ogale Glass Manufacturing Company Limited (for short 'the Company') went into liquidation. The winding up order was passed on 10-6-1985 in C.P.No. 3 of 1984. The Federal Bank Ltd., Alwaye, as one of its secured creditors was permitted by the Company Court, by order dated 11-2-1985, in C.A.No. 291/84, to file a suit against the company. The suit (O.S.No. 3 of 1986) was filed before the Subordinate Judge's Court, Ernakulam. By the decree dated 30-1-1988, the bank was made entitled to realise a sum of Rs. 1,48,22,388-73 with future interest at the rate of 10% per annum from 2-1-1986 and costs were quantified at Rs. 8,11,188-25. Thereafter, the Bank filed an Execution Petition (E.P.No. 275 of 1990) in the Sub Court, Ernakulam. Notice was issued to the Official Liquidator and the company in the execution proceedings. But, the official liquidator did not file any objections. The case was posted on 11-4-1990, 25-7-1990 and 24-11-1990 awaiting objections from the official liquidator Since the objection was filed, the execution court on 24-11-1990 directed the Bank to produce draft sale papers. The proclamation was settled on 4-6-1991 and the court directed the proclamation to be published for sale of the property on 1-8-1991. But the sale had to be postponed till 27-9-1991 as per the direction of this Court. On 27-9-1991, the reserve price was fixed by the executing court at Rs. 2,10,37,148.59 for immovable properties and Rs. 10,00,000/- for movable items. Permission was also given to the decree holder to bid at the court sale. But, there were no bidders on 27-9-1991 and the sale was adjourned. Thereafter, the execution court revised the reserve price and reduced it to Rs.1 crore and 10 lakhs after taking evidence and by considering the report of a valuer. On 21-12-1991 the decree holder (the Bank) bid the immovable items of properties for Rs. 1,10,00,100/-. The application filed by the official liquidator, on that day, for an adjournment of the sale was rejected by the execution court. The official liquidator, thereafter, filed an application (M.C.A.No. 6 of 1991) before this Court for stay of further proceedings in E.P.No. 275 of 1990 and for a direction to the execution court to sell the plaint schedule properties only after due publicity in various newspapers. This court passed an interim order of stay of confirmation of sale, by order dated 29-1-1992 in M.C.A.No. 6/92. By order dated 5-7-1993, E.P.No. 275/90 in O.S.No. 3/86 on the file of the Sub Court, Ernakulam was withdrawn and transferred to this Court. On 4-11-1993, the official liquidator filed an application (MCA 193/1993) praying therein to set aside the sale of the assets of the company which was made in the execution proceedings by the Sub Court, Ernakulam and for order of resale of the same. It is contended in the petition that the bank had not obtained leave of this Court to commence the execution proceedings under S.446(1) of the Companies Act. In the execution proceedings, no wide publicity has been given before the sale was conducted. Hence no bidders came forward to purchase the property. The bank being the secured creditor reduced the upset price fixed. The property in question would fetch much higher price than the amount for which it was sold to' the bank. The total extent of land in the possession of the Official Liquidator comprises of 26.40 acres of land out of which only 24.65 acres of land is charged to the bank, the secured creditor. The total extent is much more than what is charged to the bank and the whole extent of 26.40 acres is lying as a single patch of land and it is just and necessary that the whole extent of land is put up for sale. In the absence of proper advertisement, the assets did not fetch adequate value. It is also slated that in the meantime many offers have come from various sources for sale of the property at a higher rate than the price for which it was sold. The sale having not been conducted after giving