PAUL BROTHERS (TAILORING DIVISION) AND ORS. ETC. versus ASHIM KUMAR MANDAL AND ORS. ETC.

Citation: [1990] 2 S.C.R. 283 · Decided: 02-04-1990 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

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PAUL BROTHERS (TAILORING DIVISION) 
AND ORS. ETC. 
v. 
ASHIM KUMAR MANDAL AND ORS. ETC. 
APRIL 2, 1990 
[S. RANGANATHAN AND V. RAMASWAMI, JJ.] 
Practice and Procedure: Sanchaita case-Directions of Supreme 
Court explained. 
These appeals arose as a sequel to certain directions of this Court 
in the famous Sanchaita Investment Company case, which by dint 
of tremendous advertisement campaign collected deposits amounting 
to several crores of rupees from thousands of depositors spread all 
over India, The firm prospered and thereafter tied up and siphoned 
away a sizeable portion of its funds from its coffers for the benefit of 
the management personnel by acquiring movable and immovable 
properties in the names of the firm, relatives and benamidars. 
Then they started making defaults in its obligations to tbe deposi-
tors. 
The depositors approached the High Court and eventually the 
matter came up to this Court in 1983. With a view to safeguard the 
interests of the depositors and ensure that the properties of the firm be 
duly identified and full and due benefit of the funds be diverted to its 
coffers, this Court by its order appointed a Commissioner to take 
charge of all the assets, documents, papers of the firm, agents, 
sub-agents, transferees and benamidars. Further to enable the 
Commissioner to gather all the assets of the firm, he was given powers 
to attach all assets and properties which in his prima facie opinion are of 
the ownership of the firm or any of its partners. Such assets were to be 
put to sale if no objections are received there to within one month from 
the date of attachment. All objections thus received in respect of such 
properties were to be forwarded to the Prothonotary of Calcutta High 
Court, and a Division Bench of the High Court was to dispose of the 
objections on merits. By a further order dated 23rd September, 1985 
this Court empowered the Commissioner to remove all unauthorised 
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SUPREME COURT REPORTS 
[1990] 2 S.C.R. 
persons or trespassers from possession of the property proposed to be 
sold, and lhe Commissioner to hand over vacant possession to the right-
ful purcbasers. 
One of the properties thus attached by the Commissioner by a 
public notice was house N. 52/1/IB Surendra Nath Banerjee Road, 
Calcutta. It was subsequently brought to sale on "as is and where is 
basis". Asit Kumar Mandal and two others purchased this property 
and requested the Commissioner to give them vacant possession. Since 
the sale was on "as is and where is basis", the Mandals moved 
an application before the High Court Division Bench praying for 
the vacant possession of the said property and the same was 
granted. 
Hence the appellants i.e. Paul Bros and Others, moved two 
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Special Leave Petitions in this Court and claimed that they were bona 
fide tenants in the property even under the predecessors-in-interest of 
Mahamaya Devi in whose name the property was purchased by 
Sanchaita firm and therefore could be evicted only in accordance with 
due process of law after full contest, and could not be thrown out iu 
summary proceedings just as if they were persons in unauthorised 
E possession of the property, or as if they were mere trespassers. On the 
other hand the Mandals contended that in terms of the orders of this 
Court, and of the Calcutta Division Bench they purchased the property 
only on the basis that they would get a perfect title and speedy 
possession. 
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Allowing the Special Leave Petitions, this Court, 
HELD: That the contention of the Mandals is not maintainable 
either in principle or on the terms of the directions of this Court. The 
attachment and sale in pursuance of this Court's order of the present 
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property in question did not have the legal effect of invalidating any 
interests created or subsisting in the property by sale, transfer 
encumbrance or alienation prior to the attachment. Even the sale was 
on "as is and where is basis". The Courts order of 27th September, 
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1983 only empowered the Commissioner to remove all unauthorised 
H" persons and trespassers but persons who are in lawful possession of the 
PAUL BROS. v. A.K. MANDAL 
285 
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property could not be evicted forcibly or summarily. The said order 
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could not be interpreted to mean that the purchasers would be entitled 
to vacant possession through the commissioner even by evicting bona 
fide tenants or other encumbrancer or independent out-s

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