INDUSTRIAL FINANCE CORPORATION AND ORS. versus OFFICIAL LIQUIDATOR, HIGH COURT, CALCUTTA AND ANR. ETC. ETC.

INDUSTRIAL FINANCE CORPORATION AND ORS. versus OFFICIAL LIQUIDATOR, HIGH COURT, CALCUTTA AND ANR. ETC. ETC.

Supreme Court modified the number of instalments for payment of balance sale consideration, holding that procedure for sale should avoid court negotiating terms directly with parties, and affirmed its power to alter terms when sale notice allows court to fix payment schedule.

Parties
Appellants: Industrial Finance Corporation and Others; Respondents: Official Liquidator, High Court, Calcutta and Another
Jurisdiction
India
Judgment Date
16 February 1993
Procedural Posture
Civil Appeal / Final Disposition After Special Leave Petition
Outcome
Appeal dismissed with modification of instalment schedule for payment of sale consideration.
Legal Topics
Winding Up of Companies, Sale of Assets in Liquidation, Procedures for Sale Notice, Rights of Secured Creditors, Instalment Payments for Sale Consideration
Company Law Winding Up of Companies Sale of Assets in Liquidation Procedures for Sale Notice Rights of Secured Creditors Instalment Payments for Sale Consideration

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Parties

Industrial Finance Corporation and Others

Appellants

Official Liquidator, High Court, Calcutta and Another

Respondents

Procedural Posture

Civil Appeal / Final Disposition After Special Leave Petition

Legal Issues

  1. 1 What procedure should be adopted for sale of assets of a company in liquidation under Section 457(1)(e) of the Companies Act, 1956?
  2. 2 Whether terms of payment in instalments for sale consideration were prejudicial to the interests of financial institutions?
  3. 3 Whether Supreme Court can modify the number of instalments fixed by High Court for payment of sale consideration?

Ratio Decidendi

Supreme Court modified the number of instalments for payment of balance sale consideration, holding that procedure for sale should avoid court negotiating terms directly with parties, and affirmed its power to alter terms when sale notice allows court to fix payment schedule.

Court Disposition

Appeal dismissed with modification of instalment schedule for payment of sale consideration.

Orders

  • Purchaser to pay Rs. 52 lakhs due for 1992 with Rs. 6 lakhs interest by March 5, 1993.
  • Total balance consideration of Rs. 5.80 crores to be paid by end of 1996 in equal bi-monthly instalments (Rs. 24,16,000 each, last instalment Rs. 20,16,000).