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Petitioner: SALEEM-UD-DIN VS Respondent: JAMEEL AKHTAR PERVAIZHonorable Justice Nasim Hasan Shah
1988 S C M R 1027
1988 S C M R 1027
Present: Muhammad Afzal Zullah and Nasim Hasan Shah, JJ
Mian SALEEM‑UD‑DIN and another‑‑Petitioners
versus
Major JAMEEL AKHTAR PERVAIZ and another‑‑Respondents
Civil Appeal No.241 of 1982 and Civil Petition No.871 of 1982, decided on 8th December, 1982.
(On appeal from the judgment dated 9‑10‑1982 of the Lahore High Court, Lahore in I.C.A. No. 6 of 1979).
Companies Act (VII of 1913)‑‑
‑‑‑5.162‑‑Winding up of company‑‑Property of Company sold by Official Liquidator by public auction‑‑Contention that flagrant breaches of terms and conditions of auction having been committed by auction. purchaser, condonation of the same by Company Judge was contrary to law and therefore, contract allowed to be completed in that manner was liable to be rescinded‑‑Leave to appeal granted to consider question whether in circumstances of case such breaches could be condoned and the contract completed could still be rescinded.
A.Basit, Advocate Supreme Court with Hamid Aslam Qureshi, Advocate‑on‑Record for Petitioners.
Ch. Ghulam Mujtaba, Advocate‑on‑Record for Respondent No.1.
S.M. Zafar, Senior Advocate Supreme Court with Tanvir Ahmad, Advocate‑on‑Record for Respondent No.2.
Date of hearing: 8th December, 1982.
ORDER
NASIM HASAN SHAH, J.‑‑A winding up order was passed under Section 162 of the Companies Act on 26‑2‑1971 by the Lahore High Court directing the winding up of Pak‑Wheat Products Ltd. An Official Liquidator was also appointed for this purpose. A flour mill called the "Gulberg Flour Mills" belonging to the Pak‑Wheat Products Ltd. was put to auction on 20th June, 1971. In this auction the highest bid of Rs.32,70,000 was offered by one Syed Jamaat Ali Shah. In so far as the Company Judge reserved the power to accept or reject any bid or to enter into negotiations for the purpose of the disposal of the Gulberg Flour Mills, negotiations accordingly took place on the 24th January, 1972 and the offer of Syed Jamaat Ali Shah was accepted on the terms and conditions contained in the order to the Court dated 4‑2‑1972. Prior thereto, an application had been moved by Syed Jamaat Ali Shah that the offer should be accepted in the name of Sunny Flour Mills and this request was granted by the Court also in the aforesaid order dated 4‑2‑1972. After the said order dated 4‑2‑1972 another order was passed by the Court on 9‑2‑1972 specifying certain further terms and conditions, on which the Mill was being auctioned and these terms which were contained it the orders of the Court dated 4‑2‑1972 and 9‑2‑1972 were to form part and parcel of the terms and conditions of the auction.
2. In pursuance of these orders, for a consideration of Rs.36,01,087.50 paid by the auction‑purchaser in the manner indicated in the orders of the Court dated 4‑2‑1972 and 9‑2‑1972 (out of which a cheque of Rs.7,17,500 was handed over to the Official Liquidator) the possession of the Gulberg Flour Mills was given to the auction purchaser.
3. The case of the petitioners herein is that "flagrant breaches" of the terms and conditions of the auction dated 20‑6‑1971 as elaborated in the orders of the Court dated 4‑2‑1972 and 9‑2‑1972, and agreement to sell dated 15‑2‑1972 were committed by the auction purchaser but the same were condoned by the Company Judge on applications moved from time to time whereby they succeeded in getting and the essential conditions of the auction bypassed and the condonation by the learned Company Judge of the flagrant breaches of the terms and conditions of the auction was contrary to law and, therefore, the contract allowed to be completed in this manner should be rescinded. It is further submitted that the learned Judge of the Division Bench, hearing the Intra‑Court Appeal, have unjustifiably upheld the condonation of these breaches and erred in law in dismissing the appeal of the petitioners.
4. The question whether in all the circumstances of the case I these breaches could be condoned and the contract completed and can still be rescinded, requires further consideration. Leave is accordingly, granted.
5. Security in the sum of Rs.10,000 (Rupees ten thousand only).
6. The appeal to be made ready on the present record with liberty to the parties to add further documents, if any. However, the filing of concise statements is not dispensed with, which the parties are required to file.
7. The sale‑deed and the sale certificate may be issued to the auction‑purchaser but he is restrained from further alienating the Mills during the pendency of the appeal.
S.Q./S‑128/S?????????????????????????????????????????????????????????????????????????????????????? Leave granted.