Navalkha & Sons vs Sri Ramanya Das & Ors on 27 October, 1969
In Navalkha and Sons v. Ramunuju Das [1970] 40 Comp Cas 936 (SC) : [1970] 2 Comp LJ 8, this court held that the court is the custodian of the interests of the company and its creditors and the sanction of the court required under the Companies Act has to be exercised with judicial discretion regard being had to the interests of the company and its creditors as well. Where the acceptance of the offer by the Commissioner is subject to confirmation of the court, the offer does not by mere acceptance get any vested right in the property so that he may take automatic confirmation of this offer. The condition of confirmation by the court operates as safeguard against the property being sold at an inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case it is the duty of the court to satisfy itself that having regard to the market value of the property the price offered is reasonable, unless the court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion. In that case, the court upheld the order of the company court reopening the concluded sale and reaction was upheld. In Kayjay INDUSTRIES (P.)