The involvement of the Official Liquidator in the sale process, valuation of assets, wide publicity of auction, safeguarding of workmen's dues, absence of fraud or collusion were central legal principles established in the judgment.

(Order of the Court was made by C.NAGAPPAN, J.)

1. The petitioners have sought for issuance of a writ of certiorarified mandamus to quash the order dated 18.11.2009 passed by the second respondent and to direct the respondents 2 and 3 to issue tender and hold auction afresh for the sale of properties covered under the order dated 18.11.2009 after assessing the value of the entire properties including Plant, Machinery and other movable and immovable properties based on the current market value and to allow the petitioners to participate and to be present throughout the sale process.

2. The petitioners are two Workers Union, employed in the first respondent Mill at Salem. The United Bank of India extended financial facilities to the first respondent Company from 1989-1994 and the first respondent Company had mortgaged inter alia its immovable properties and hypothecated its plant and machinery lying at factory premises to the United Bank of India and due to failure to repay the the amount, the Bank initiated steps and issued notice dated 20.1.2007 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to the first respondent Company and the United Bank of India by assignment deed, dated 26.3.2007, assigned and released all the financial assistance granted to the first respondent Company in favour of the second respondent Company in terms of Section 5 of SARFAESI Act. Thereafter the second respondent issued a fresh noitce, dated 6.8.2007, under Section 13(2) of the Act and it took symbolic possession of the secured immovable properties under Section 13(4) of the Act on 27.11.2007 and subsequently took actual possession on 25.8.2008 pursuant to an order passed under Section 14 of the Act. In the meanwhile, the first respondent Company was directed to be wound up and the Official Liquidator was appointed by Order of this Court, dated 28.10.2008, in C.P.No.141 of 1994 on the petition filed by one G.P.Economical Traders Private Limited. On coming to know the same, the second respondent moved the Company Court by filing applications in Company Application Nos.244 to 246 of 2009 in C.P.No.141 of 1994 seeking for impleading itself and for an injunction. The Company Court, by its Order dated 1.4.2009, allowed the Applications and permitted the second respondent Company to sell the properties by involving the Official Liquidator in the sale process. The second respondent, upon the involvement of the Official Liquidator, appointed approved Valuers to value the movable and immovable properties of the Company.

3. As per the Valuation Report, the market value of the immovable property was determined as Rs.15,02,57,000/-as on 11.8.2009 and the fair market value of the movables was fixed at Rs.2,25,00,000/-. The petitioners, on coming to know of the sale, filed Writ Petition in W.P.No.8930 of 2008 seeking to forbear the respondents 2 and 3 from bringing the properties of the first respondent Mill for sale without being evaluated on the current market value and not to appropriate the sale proceeds without settling the dues payable to petitioners and obtained interim injunction on 11.4.2008. On coming to know the sale, the petitioners filed W.P.No.24480 of 2008 seeking to declare the sale and confirmation of sale of the lands covered by sale notice dated 6.3.2008 in favour of M/s.Syhims Granites, Salem as null and void and also filed W.P.No.24481 of 2008 seeking to declare the sale of the properties and confirmation of sale covered by sale notice, dated 24.9.2008, as null and void, and sought for interim injunction, but notice alone was ordered. All the three Writ Petitions came up for hearing on 25.8.2009 and a Division Bench of this Court vacated the interim order granted in W.P.No.8930 of 2008 on the ground that the second and third respondents herein agreed to share 3/8 of sale proceeds of Rs.6 Crores received by them pursuant to the sale of the part of prop