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M.C.T.M. Chidambaram Chettiar Vs. the Official Receiver, High Court - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai
Decided On
Reported inAIR1943Mad365; (1943)1MLJ123
AppellantM.C.T.M. Chidambaram Chettiar
RespondentThe Official Receiver, High Court
Cases ReferredSoundararajan v. Mokamed Ismail Saheb
Excerpt:
- .....registered post so as to reach him on or before the 31st october, 1942. it was not stated that the highest tender would be accepted and there was no reserve price fixed, but a person submitting a tender could reasonably expect it to be accepted if his bid proved to be the highest and the sum offered was adequate.3. the official receiver opened the tenders on the 6th november and found that the appellant had submitted the highest offer. the appellant was prepared to pay a sum of rs. 45,000 and discharge all the liabilities of the business. on the 10th november the official receiver took out a judge's summons in which he asked for an order approving of the date fixed by him for the submission of the tenders and for directions as regards the offers submitted by the appellant and the.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. The facts of this case disclose a ground for a feeling of grievance by the appellant; but the Court is not able to allow the appeal.

2. On the 13th August, 1942, Bell, J., ordered that the assets of the Madras Chemical Industries, Limited, which was in the process of being wound up under an order of this Court should be sold by tender. The intention was to sell the business as a going concern. In pursuance of this order the Official Receiver caused an advertisement to be published in the newspapers inviting tenders for the purchase of the business. The advertisement directed that the tenders should be sent to him by registered post so as to reach him on or before the 31st October, 1942. It was not stated that the highest tender would be accepted and there was no reserve price fixed, but a person submitting a tender could reasonably expect it to be accepted if his bid proved to be the highest and the sum offered was adequate.

3. The Official Receiver opened the tenders on the 6th November and found that the appellant had submitted the highest offer. The appellant was prepared to pay a sum of Rs. 45,000 and discharge all the liabilities of the business. On the 10th November the Official Receiver took out a Judge's summons in which he asked for an order approving of the date fixed by him for the submission of the tenders and for directions as regards the offers submitted by the appellant and the Associated Agencies, Limited. The Associated Agencies had only bid Rs. 40,000. The matter came before Chandrasekhara Ayyar, J., on the 12th November when he approved of the date fixed for the submission of tenders. Having passed this order the learned Judge adjourned the case until the next day. When it was called the next day, the Official Receiver reported that the Associated Agencies, Limited, had expressed their willingness to raise their offer to Rs. 50,000. It was also reported to the Court that there was another offer. Thereupon the learned Judge directed that a week's further time should be given for the receipt of fresh offers or ' for increase of offers already made.' He also directed that the offers should be made in sealed covers addressed to the Official Receiver and that they should be opened in Court on the 23rd November. The appeal is from that order, and pending its hearing further proceedings have been stayed.

4. Mr. Braddell, on behalf of the appellant has contended that the present case falls within Soundararajan v. Mokamed Ismail Saheb (1939) M.W.N. 1115. The facts there were however very different. There the sale was by public auction and the advertisement stated that the highest bid would be accepted, subject to the confirmation of the Court. The respondent in that case bid Rs. 1,12,500 and the property was knocked down to him. When the sale was reported to Court for confirmation, the appellant said that he was prepared to offer Rs. 1,15,000. This was refused and the sale was confirmed. The Court, on appeal, held that the order of confirmation had been rightly passed and it was not open to a bidder at an auction to come to Court and increase his bid to the detriment of the highest bidder at the auction if that bid was acceptable.

5. As we have already indicated, in the present case the advertisement did not state that the highest tender would be accepted. When the matter came before the Court on the Judge's summons taken out by the Official Receiver, it was not a question of the confirmation of a sale as no sale had taken place. What the Official Receiver was in fact asking was whether he should accept the bid of Rs. 45,000 made by the appellant. The Associated Agencies, Limited, was entitled to make a further offer in the circumstances, but we consider that the course taken in this case for the sale of property by Court should not be followed in future cases. If the Court decides that the sale shall be by tender, the advertisement should state that the highest tender will be accepted subject to the confirmation of the Court and where feasible a reserve price should be fixed. In other words the sale should be on the same basis as a sale by public auction. In this case there was no stipulation that the highest tender would be accepted and we think that the Judge's order should stand.

6. The Official Receiver reports that three other tenders have been received as the result of the extension of time granted by Chandrasekhara Ayyar, J. We think that the appellant, if he wishes, should be permitted to put in a fresh tender : and he will be given a week's time from to-day to do this. The further tenders received will not be opened until after the expiration of the week and when they are opened they will be opened in Court on a date to be fixed by the learned Judge. No further lender will be allowed beyond those already in and the further tender of the appellant, should he desire to make one.

7. The appeal will be dismissed, but we make no order as to costs.


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