SALEEM-UD-DIN Versus JAMEEL AKHTAR PERVAIZ

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of the auction was contrary to law and, therefore, the contract allowed to be completed in this manner should be rescinded.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.