ALLAHABAD BANK ETC. ETC. versus BENGAL PAPER MILLS CO. LTD. AND ORS. ETC.

Citation: [2004] SUPP. 5 S.C.R. 143 · Decided: 07-10-2004 · Supreme Court of India · Bench: R.C. LAHOTI

Judgment (excerpt)

ALLAHABAD BANK ETC. ETC. 
v. 
BENGAL PAPER MILLS CO. LTD. AND ORS. ETC. 
OCTOBER 7, 2004 
[R.C. LAHOTI, CJ., G.P. MA THUR AND 
P.K. BALASUBRAMANY AN, JJ.] 
A 
B 
Winding up of Company-Purchase of assets thereof-After a round of C 
litigation sale set aside by Supreme Court on the ground of consideration 
being inadequate-Purchaser in possession of the assets for 10 years-Direction 
for refund of purchase price-Demand of interest thereon-Refusal by Official 
Liquidator-Application for clarification of the order clarifj;ing interest on 
purchase price-Held: In view of principle embodied in Order XX! Rule 93 
CPC, the Court in exercise of its discretion had refused to award interest on D 
the purchase price-Even on principle of restitution claim would not succeed 
as there was no failure of consideration because the purchaser had the benefit 
of the assets-Principle of restitution is founded on the principle of urljust 
enrichment-Hence it would be necessary to investigate that aspect and 
advantage derived by each of the parties have to be determined-Code of E 
Civil Procedure, 1908-0rder XX!, Rule 93-Contract Act, 1872-Sections 
65, 70 and 72-Principle of Restitution. 
Winding up of Company-Purchase of assets thereof-After a round of 
litigation sale set aside by Supreme Court directing resale of assets-Offer for 
purchase of the assets as a going concern and counter offer for purchase on F 
"as is where is basis "-Direction of Company Court to parties to get 
clarification from this Court regarding mode of sale-Applications seeking 
clarification-Held: Clarification not required-The decision regarding mode, 
manner and price of sale is that of the Company Court. 
Respondent-Company was ordered to be wound up. The offer of 
purchaser-applicant to purchase the assets of the Company was accepted. 
Sale was ordered and the same was confirmed on 15.9.1989. Applicant was 
given possession of the assets of Company the very next day. Purchase 
price of Rs.2 crores was not paid in lump sum but in four quarterly 
143 
G 
H 
144 
SUPREME COURT REPORTS [2004) SUPP. 5 S.C.R. 
A instalments. Appeal against the sale and _its confirmation was dismissed 
by Division Bench of High Court. Appeal against the same was allowed 
by this Court on 20.4.1999 setting aside the sale as the sale price was found 
to be very low, directing refund of purchase price and resale of assets of 
the Company. Official Liquidator refunded the purchase price, but refused 
B to pay interest thereon as demanded by the applicant. Applicant filed 
present applications seeking clarification of the judgment of this Court 
as to whether applicant was entitled to interest on the purchase price from 
15.9.1989 to 20.4.1999. 
Before the Company Court, one party made offer to purchase the 
C assets of the Company as a going concern. Another party made counter 
offer to purchase the assets on "as is where is" basis. Company Court had 
directed the parties to get clarification from this Court as to the mode in 
which the assets should be sold. Labour union of the Company filed 
applications for clarification of its judgment by directing that the 
D Company should be sold as a going concern. Another party filed 
application to intervene the application filed by the Union praying for sale 
of the Company on "as is where is" basis. 
Applicant, demanding interest contended that since the Official 
Liquidator had invested the purchase price, the interest earned on that 
E was an accretion to the purchase price which would belong to the applicant 
since the sale in its favour had been set aside. 
F 
G 
Parties opposing the claim of interest contended that the applications 
actually sought an additional relief or a relief which was not granted by 
this Court and which in fact had been denied or deemed to have been 
denied by this Court; and that applicant was liable to account for the 
profits earned from the property which was in his possession for 10 years. 
Dismissing the applications, the Court 
HELD: 1.1. Order XXI Rule 93 CPC provides that where a sale of 
immovable property is set aside under Rule 92 of Order XXI, the 
purchaser shall be entitled to an order for repayment of his purchase 
money with or without interest as the Court may direct against any person 
to whom it h~s been paid. Even though Order XXI Rule 93 may not ipso 
facto apply to a sale otherwise other than under CPC, the principle 
H embodied therein can be applied to other sales to order refund of the 

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