CIFCO PROPERTIES PVT. LTD. AND ORS. versus CUSTODIAN AND ORS.

Citation: [2005] 3 S.C.R. 76 · Decided: 31-03-2005 · Supreme Court of India · Bench: R.C. LAHOTI · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
CIFCO PROPERTIES PVT. LTD. AND ORS. 
v. 
CUSTODIAN AND ORS. 
MARCH 31, 2005 
B [R.C. LAHOTI, CJ., G.P. MATHUR AND P.K. BALASUBRAMANYAN, JJ.] 
Special Court (Trial of Offences relating to Transactions in Securities) 
Act, I992-Sale of properties attached under the Act-Interiocutory order 
C passed by Special Court directing the Custodian appointed under the Act to 
act as the Receiver, as the High Court Receiver was not able to hold the sale 
D 
· proceedings expeditiously-Interference with the order-Held: Interference is 
uncalled for, the order being purely interlocutory and not deciding any rights 
of any party-Interference would also be improper since, on facts, sale 
proceedings are already nearing completion. 
Special Court constituted under the Special Courts (Trial of Offences 
Relating To Transactions in Securities) Act, 1992 had initially directed the 
High· Court Receiver to hold sale of certain properties for recovery of dues. 
But as the High Court Receiver was not able to hold the sale proceedings 
expeditiously and to the satisfaction of the Special Court, the Special Court 
E directed further proceedings of sale to be conducted by the Custodian 
appointe~ under the Special Courts Act, directing the custodian to act as 
the Receiver. Hence the present appeal. 
Appellant contended that the Custodian plays an adversarial role in 
proceedings before the Special Court, hence it would not be just and fair 
F to permit sale proceedings being conducted by the Custodian and that only 
the High Court Receiver shouid conduct the sale proceedings. 
Dismissing the appeal, the Court 
HELD: I. An interference with the impugned order passed by the 
G Special Court, which is purely interlocutory and does not decide any rights 
of any party, is uncalled for. [78-F) 
H 
Gajadhar Prasad and Ors. v. Babu Bhakta Ratan and Ors., (1973) 2 
SCC 629 and Canbank Financial Services ltd. v. Custodian and Ors., (2004) 
76 
I,
I 
I 
.,.• 
,. 
-
CJFCO PROPERTIES PVT. LTD. v. CUSTODIAN [LAHOTL C.I.] 
77 
8 sec 355, referred to. 
A 
2. A public notice for holding auction of the property in the present 
case was issued by the Custodian on the 10th March, 2005 and the last 
date appointed for receiving the bids is 31st March, 2005. It is not deemed 
proper, in the facts and circumstances of the present case, to interfere 
midway and alter the course of the sale proceedings which are already B 
nearing t.he accomplishment shortly. (79-G-H; 80-A) 
3. Before the bids are finalized and the Court accepts any bid, the 
appellants would have the opportunity of hearing and, if the Court feels 
convinced that the property has not fetched the best or the expected C 
reasonable price, then the Court is not powerless to reject all the bids and 
order auction afresh, subject to such directions as it may choose to make 
as to the manner of holding and conducting the sale and the person who 
would do it under the directions of the Court. (80-8) 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8358 of2004. D 
Form the Judgment and Order dated 30.11.2004 of the Special Court 
(Torts) Bombay in Misc Application No. 439 of 2004. 
Dr. Rajiv Dhawan, Monaj Shukla, Shailendra Narayan Singh, Mrs. 
Neelam Kalsi and Vimal Chandra S. Dave, with him for the Appellants 
E 
S. Balakrishnan, R. Gopal Krishnan, Abbay Kumar and Sunbramonium 
Prasad with him for the Respondents. 
The Judgment of the Court was delivered by 
R.C. LAHOTI, CJ. This appeal is directed against an order of 
interlocutory nature passed by the Special Court constituted under the 
provisions of the Special Courts (Trial of Offences Relating To Transactions 
in Securities) Act, 1992 (hereinafter 'the Act', for short). 
F 
Sale of certain properties is being held. The appellants do not dispute G 
the liability of the properties to be sold for the recovery of dues. The Special 
Court initially directed the High Court Receiver to hold the sale of the 
properties. It appears that the High Court Receiver was not able to hold the 
sale proceedings expeditiously and to the satisfaction of the Special Court 
and the Court formed an opinion that this was because the High Court Receiver H .. 
78 
SUPREME COURT REPORTS 
[2005] 3 S.C.R. 
A was over-burdened with work. The Court directed further proceedings of sale 
to be conducted by the Custodian appointed under the Act as requisite 
infrastructure for functioning as Receiver was available with the Custodian. 
Accordingly, the Court directed the Custodian t
Excerpt shown. Read the full judgment & AI analysis in Lexace.