The court ruled that an illegal encroacher cannot demand a registered sale deed for property belonging to a company in liquidation, emphasizing the necessity of public auction for asset sales under Section 457(1)(c) of the Companies Act.

ORDER :

K. LAKSHMAN, J.

Heard Mr. Alladi Ravinder, learned Senior Counsel representing Sri Bandar Srikanth, learned counsel for the petitioner, Sri J.Srinadh Reddy, learned counsel appearing for Official Liquidator and Sri D.Narender Naik, learned counsel appearing for 2^nd respondent.

2. This application is filed under Section 457 (1) (c) of the Companies Act, 1956, to direct the Official Liquidator to take necessary steps to transfer the lands admeasuring Ac.0.34 cents in Sy.No.91P, Ac.0.94 Cents in Sy.No.92P, Ac.7.00 Cents in Sy.No.100P, Ac.0.50 Cents, Ac.2.70 Cents in Sy.No.98P (total extent of Ac.11.58 Cents) situated at Kosini Village Sivar of Kaghaznagar Mandal, Komaram Bheem Asifabad District for Rs.2.5 Lakhs to Rs.3 Lakhs per acre in favour of the Applicant/Petitioner herein.

3. By order dated 26.04.2001 in C.P.No.57 of 1999, 1^st respondent Company went into liquidation. This Court appointed Official Liquidator to take over the assets and liabilities of the Company under liquidation. Pursuant to the said order, Official Liquidator has taken possession of the assets and liabilities of the 1^st respondent Company in the year 2001.

4. By order dated 04.12.2008, in C.P.No.57 of 1999, this Court appointed M/s Servel Associates as the valuator to value the vacant/ unencroached property of the 1^st respondent company in liquidation and directed the Official Liquidator to sell the properties of company except the quarters of the said company. The Official Liquidator has filed an application vide C.A.No.343 of 2009 seeking permission of this Court to put unencroached company’s land admeasuring Ac.456.37 cents and building situated (except company’s quarters) for public auction duly dividing into eight lots as per valuation report. This Court accorded permission to the Official Liquidator. Thereafter, Official Liquidator put the properties for sale by issuing auction notice. He has received 33 tenders in respect of the said 8 lots.

5. In respect of lot Nos.2, 3, 5, 6, 7 and 8, this Court confirmed the sale, considering the fact that price quoted by the bidder is higher than the minimum of said price. In respect of lot No.6, Mr. Ravi Ram Mohana Rao filed an application vide C.A.No.662 of 2009 claiming an extent of Ac.4.26 cents in Sy.No.77 contending that the said extent does not belong to the company in liquidation and it is his exclusive property. He is claiming right over the said property basing on the assignment deed and he has pattadar passbooks and title deeds etc. The said application is pending.

6. 2^nd respondent is the highest bidder in respect of lot No.6 i.e. land admeasuring Ac.186.39 cents.

7. Official Liquidator, IDBI, Creditor had convened meeting with the Managing Partner of 2^nd respondent i.e. Sri B.Venkata Narayana Rao, the highest bidder in respect of lot No.6 and he has accepted to purchase the land admeasuring Ac.182.11 cents under lot No.6 excluding to an extent of Ac.4.28 cents.

8. Vide his letter dated 20.01.2011, the Official Liquidator requested 2^nd respondent to pay balance sale consideration of Rs.2,58,20,000/- (excluding EMD of Rs.24 Lakhs) in respect of land admeasuring Ac.182.11 Cents. Accordingly 2^nd respondent has paid the said amount by way of Demand Drafts towards balance sale consideration in respect of the aforesaid land. 2^nd respondent requested the Official Liquidator to deliver physical possession of the said land admeasuring Ac.182.11 and to execute registered sale deeds. Vide letter dated 09.08.20