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1951 Supreme(Mad) 182

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mr. P.V. Rajamannar, Chief Justice and Mr. Justice Venkatarama Ayyar,JJ.
A. Subbaraya Mudaliar
Versus
K. Sundararajan (Joint Receiver)
O.S.A.No.27 of 1951.
Decided On : 09 July 1951

Advocates:
A. Seshachariar and A. Srinivasan for Appellant.
K.S. Sundararajan, G. Ramakrishna Aiyar, M.P. Subramaniam and T.R. Sangameswaran for Respondents.

Conduct of auction of Receiver under the orders of Court.

Headnote:Auction -Discretion of Court either to refuse or accept the bid on the ground of inadequate price fetched in auction.

Rajamannar, C.J.-Pending a suit on the original side of this Court relating to the estate of one C. Balasundara Mudaliar, deceased, it was found that the only way of raising funds necessary for the discharge of pressing claims on the estate was the sale of one of the items of the estate. There was a suggestion that one of the properties, a printing press, called the B.N. Press might be sold as a going concern. On nth December, 1950, Rajagopalan, J., made an order giving liberty to the parties to the suit to obtain offers for the purchase of the press as a going concern so that the Court might be in a position to decide whether the press should be sold at a public sale or at a sale confined to the parties. Apparently no satisfactory offers were obtained and on 8th January, 1951, the learned Judge decided that the press should be sold as a going concern by the joint receiver, at a public sale. The parties to the suit were given liberty to bid at the sale on the same terms as the other bidders. The sale was to be effected after wide publicity. In pursuance of this order, the joint receiver, an advocate of this Court, after giving such publicity as he thought was proper conducted the sale on 25th March, 1951. There were twelve bidders and it is admitted that besides the first defendant who is found in the list of bidders, the plaintiff also was present at the auction though she apparently did not arrive before the auction commenced. She, however did not take part in the bidding. The first defendant made one bid of Rs.26,000 but did not participate subsequently in the bidding. The proprietor of Rayan Press, one A. Subbaraya Mudaliar, was the highest bidder, his bid being for Rs.31,200. The joint receiver knocked down the sale in his favour and received Rs.8,100 being 25 per cent. of the bid in cash. It is common ground that one of the conditions of sale was that it should be subject to the confirmation by this Court. Soon after the auction, when the receiver submitted a report to the Court praying that the Court may be pleased to confirm the sale in favour of the highest bidder, the plaintiff complained that the highest bid offered at the auction was quite inadequate and she herself offered Rs.35,000. The first defendant did not make any offer and apparently was satisfied that the sale should be confirmed. The purchaser protested against any attempt to reopen the bidding. The Court, however, taking into account the offer of the plaintiff to purchase the press for Rs.35,000 adjourned the matter to a date on which the learned Judge conducted, as it were, an auction between the parties to find out the highest price which would be offered for the property. Eventually the plaintiff made the highest offer of Rs.42,000. It was contended before the learned Judge on behalf of the auction-purchaser that as there was no irregularity in the conduct of the sale, the Court should not set aside the entire auction proceedings conducted by the joint receiver under orders of the Court, and the highest bid which he made should be accepted by the Court and the sale concluded in his favour. The learned Judge did not accept this contention. In his opinion, the price fetched at the auction sale was not adequate and he did not agree with the learned counsel for the auction-purchaser that the Court could not refuse to confirm the sale to the highest bidder merely on the ground of apparent inadequacy of price. He came to the conclusion that the offer of Rs.42,000 made by the plaintiff was an offer made in good faith and he saw no justification for refusing to accept this offer and why he should accept the highest bid at the auction for Rs.32,000 which fell far below the offer made by the plaintiff. The learned Judge, therefore, refused to accept the highest bid made by the auction-purchaser and directed the joint receiver to refund forthwith the deposit made by him. He directed the plaintiff to deposit into Court the sum of Rs.10,000 before a particular tim








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