JUDGMENT
Janardan Sahal, J.
1. On the winding up of SIDCO Leathers the properties of that company were brought to sale. The official liquidator after obtaining sanction from the Court invited tenders by public advertisement. The properties were to be sold in two lots : the first being the land and building of the company and the second plant and machinery. The bid of the petitioner being the highest Rs. 10 lacks for lot No. 1 and Rs. 45 lacks for lot No. 2 was accepted and subsequently confirmed by the Company Judge. A deed which is the subject matter of this petition styled as a certificate of sale was also executed by the official liquidator in favour of the petitioner.
2. Proceedings were then initiated under Section 47A of the Indian Stamp Act in respect of the ‘sale certificate’. The contention of the revenue is that the instrument in question is a conveyance and duty is payable thereon under Article 23 of Schedule 1B of the Indian Stamp Act. The contention of the petitioner is that the instrument is a sale certificate within the meaning of Article 18 of Schedule 1B of the Stamp Act and is not a conveyance. The difference between the duty payable in respect of these two instruments is that in the case of a conveyance the duty is payable on the amount shown as the sale consideration in the instrument or upon the market value of the property whichever is higher whereas in the case of a sale certificate the duty is payable on the purchase money shown in the instrument itself irrespective of the market value. The Assistant Commissioner (Stamp) by his order dated 28.11.2002 held that the instrument in question was a conveyance and, therefore, dutiable under Item No. 23 and accordingly, he found the instrument deficiently stamped. The order was challenged in revision by the petitioner before the Chief Controlling Revenue Authority which by the impugned order dated 8.8.2003 has remanded the case to the Assistant Commissioner (Stamp) with the direction that the plant and machinery be valued by a technical committee.
3. In order to attract the provisions of Article 18 of Schedule 1B it is necessary that the property, which is the subject matter of the instrument was sold in a public auction by a Court or by an officer, authority or body empowered under law to do so. Sri R. N. Singh, learned counsel for the petitioner submitted that the sale of properties in the exercise of jurisdiction of winding up by the company Judge is a court sale- an inference, which according to him, can be drawn from Section 457 of the Companies Act and Rule 272 of the Companies (Court) Rules, 1959, which require sanction and also subsequent confirmation of the sale by the Court and under which the Court exercises control over the sale and can determine the mode of sale by public auction or by tender or otherwise and can also appoint an agent or auctioneer to conduct the sale. To examine the merits of this contention it is necessary to refer to the relevant provisions of the Companies Act. Section 457(1) of the Companies Act provides a list of powers, which the official liquidator can exercise after sanction of the Court. One of the powers, which it confers by Clause (c) is the power to sell the property of the company. Clause (c) runs as follows :
“(c) to sell the immovable and movable property and actionable claims of the company by public auction or private contract, with power to transfer the whole thereof to any person or body corporate, or to sell the same in parcels.”
4. Section 457(2) confers certain powers, which the liquidator can exercise without the sanction of the Court-one of these powers being to execute deeds on behalf of the company. However, Section 457(3) provides that the exercise of power by the liquidator shall be subject to the control of the Court. It is clear from Section 457 as the heading of that section ‘powers of liquidator’ also indicates that the provision confers powers of sale upon the liquidator. The fact that: the liquidator has to take the sanction of the Court and to work under the control of the Court does not change the position that It is the liquidator who under the statute has been conferred with the power of sale. This is further clear from Section 458 of the Companies Act, which provides that the Court may order that the liquidator may exercise any power even without sanction or ‘intervention of the Court’. The expression ‘intervention of the Court’, in the section obviously refers in the context to the role of the Court and of the control it exercises over the liquidator under the preceding Section 457 of the Act. Section 458 provides an exception to the requirement of sanction. There is no provision under the Companies Act conferring the power of sale upon the Court. Rule 272 no doubt provides that unless the Court otherwise orders, no property belonging to the company which is being wound up by the Court shall be sold by the official liquidator without the previous sanction of the Court, and every sale shall be subject to confirmation by the Court but the rule makes it clear that the sale is to be made by the liquidator subject to sanction and confirmation by the Court. We have already seen that the Court can exempt the official liquidator from taking sanction.
5. To appreciate the position the relationship of the liquidator in the winding up proceedings to the Court in general would also require to be considered. The liquidator is appointed under Section 448 of the Companies Act by the Central Government. The liquidator has to act under the control of the Court but the acts performed by the liquidator are acts for which he has statutory empowerment under Section 457 and he does not derive these powers from the Court. Section 457(2), (1) provides that the liquidator shall have power to do all acts to execute deeds and other documents on behalf of the company. For exercise of power mentioned in Section 457(2) no sanction of the Court is necessary but by virtue of sub-section (3) the Court has control over this power also. When a sale is confirmed the sale deed, which would be executed by the official liquidator would as there is no other specific provision in the Companies Act be one executed under Section 457(2), (1) and would, therefore, as that provision specifies be a deed executed on behalf of the company and not on behalf of the Court. The theoretical foundation for this position that the liquidator represents the company is that on liquidation the properties of the company do not vest in the liquidator. They continue to belong to the company. The liquidator by virtue of Section 456 of the Companies Act is empowered only to take custody of the property of the company and by virtue of Section 456(2) the Company’s properties are deemed to be in the custody of the Court with effect from the date of the winding up order. In Ram Lal Rajram v. G. D. Mehrotra, AIR 1958 ‘All 447, this Court considered the nature of the liquidator’s power. It was held that the liquidator represents the company and not the Court. The Division Bench observed :
“There appears to be nothing in the Indian Companies Act, 1913 (which admittedly governs the relationship between the parties to this case) to support the contention of the respondents that the liquidators are the agents of the Court and that their acts can on that account be considered to be acts of the Court. Liquidators may be officers of the Courts as they act under its directions, but strictly speaking they represent not the Court but the company, which is being wound up. Everything, which they have to do, has to be done in the name of the company for the safeguarding of its interests and those of its creditors and shareholders. They have to act in the name of the company and not in their own names. Provisions in the Companies Act like sub-section (5) Section 183 show clearly the untenablity of the contention that the liquidators and the Court are identical in any respect.”
6. It is on the execution of the sale deed by the liquidator that the title to the property of the company sold would pass on to the purchaser and not by the order of the Court confirming the sale. This is unlike a sale by the civil court. Under Order XXI Rule 92 Civil Procedure Code a sale becomes absolute when it is confirmed and the title relates back to the date of the sale under the deeming provisions of Section 65, C.P.C. The sale certificate though a document of title is only an evidence of the sale and does not itself pass on any title vide Ram Sri v. Jai Lal AIR 1947 All 171 ; Makhan Lal Kela v. Baldoo Prasad, AIR 1938 All 471. A sale by a civil court in execution proceedings is a court sale because title in the property stands transferred to the purchaser of immovable property by the order of confirmation made by the Court. Sales of movable property by the executing court become absolute under Order XXI Rule 77, C.P.C. on payment of the purchase money and the officer holding the sale giving a receipt to the purchaser. Rule 272 of the Company Court Rules require confirmation of a sale by the Court but does not contain a provision like that in Order XXI Rule 92, C.P.C. that on confirmation the sale would become absolute. The word ‘absolute’ in context of Order XXI Rule 92, C.P.C, means conveying perfect title. In absence of any provision making absolute the confirmation of sale under Rule 272 of the Company Court Rules, confirmation of sale can mean only the sanction of the Court to the sale contemplated under Section 457. While Section 457 of the Companies Act requires sanction and does not specify previous or subsequent sanction, Rule 272 divides the process of sanction into two parts. Sanction before sale and confirmation after sale. It also manifests an act of control of the Court under sub-section (3) of Section 457. The confirmation contemplated in Rule 272 is a part of the sanction required under Section 457 and such confirmation in the absence of any provision making the sale absolute such as is contained in Order XXI Rule 92, C.P.C. or under Order XXI Rule 77, C.P.C. does not pass on title. If, therefore, confirmation of the sale by the company Judge does not pass on title, the title would obviously pass on to the purchaser by the sale deed executed by the liquidator under Section 457(2) which is a deed executed on behalf of the company. The provisions aforesaid lead to the conclusion that the sale in liquidation is a sale by the liquidator and not by the Court as title in the property is transferred by the act of the liquidator and not by the Court. A Division Bench of this Court in In re Union of India Sugar Mills Ltd., AIR 1930 All 330, considered the nature of the role of the Court in the matter of transfer of the company’s property on liquidation. It was held by this Court :
“The proceedings before the Court which considered the several offers made by several persons for taking mortgage of the property or purchasing the same may be looked upon as negotiations between those parties and the official liquidators, under the supervision of the Court. In so far as the Court intervened, it intervened for the benefit of the official liquidators and through them for the benefit of the creditors and ultimately of the shareholders. The offers that were accepted by the Court, when accepted on behalf of the official liquidators and the offer and acceptance may be regarded as a valid and binding contract between Mr. Kamlapat and the official liquidators, although the Judges themselves took a great interest and an active part in the settlement of the terms.”
7. The Delhi High Court in Globe Financiers (P.) Ltd. v. Official Liquidator, 1970 Comp Cas 1161, has also held that the sale in liquidation is not a Court sale but a sale by the official liquidator.
8. The next question to be considered is whether the instrument, which has been described as sale certificate by the official liquidator was an instrument falling under Article 18 Schedule 1B. It is indeed no doubt true that the official liquidator has been conferred with the power of sale under Section 457 of the Companies Act and, therefore, one requirement of Article 18 that the officer selling by public auction must be so empowered is satisfied. However, there is no provision under which the official liquidator is empowered to issue a sale certificate. The difference between a sale certificate granted by a civil court under Order XXI Rule 94, C.P.C. and a conveyance is that a sale certificate by the civil court, as we have noticed does not confer any title upon the party to whom it is issued and is only evidence of sale, the title having become absolute when the sale was confirmed whereas a deed of conveyance as defined under Section 2(10) of the Stamp Act passes on title. Rule 285 (m) of the U. P. Zamindari Abolition Rules relating to sales made by the Collector is an exception to the rule that no title passes by the sale certificate In view of the deeming clause contained in this provision that the sale certificate issued in respect of sales made for recovery of land revenue is a valid transfer of such property. It appears that this deeming provision was enacted In view of the fact that in sales under the Zamindari Abolition and Land Reforms act there is no provision making the sale absolute on confirmation. It is, however, clear that even in such sales the title passes on by the Act of the Collector issuing a sale certificate-a power conferred upon him by the statute.
9. I am not inclined to accept the submission made by Sri. R. N. Singh that the official liquidator has power to issue a sale certificate as an incidental power conferred upon the liquidator under Section 457(1)(e) of the Companies Act. Section 457(2) specially empowers the official liquidator to execute deeds, receipts, documents, etc. on behalf of the Company. I have already taken the view that when the liquidator sells the property of the company he does so on behalf of the company. The deed which he would execute in favour of the purchaser would be one under Section 457(2)(i) of the Companies Act. Title would pass on by the said deed and it would, therefore, be a conveyance, which by its very definition in Section 2(10) is an instrument by which property is transferred inter vivos and which is not specifically provided for by Schedule 1, 1A and 1B. The expression ’empowered under any law’ contained in Article 18 contemplates a specific empowerment by law such as is given by Order XXI Rule 94, C.P.C. or by Rule 285 (m) of the U. P. Zamindari Abolition Rules. The contention that the power to issue a sale certificate is implicit in the power of sale is negatived by the twin requirement of Article 18, namely, the empowerment under law (1) to sell the property and (2) to grant a sale certificate, if the power of issuing a sale certificate is to be implied In the power of sale itself, the separate requirement under Article 18 of empowerment by law to issue a sale certificate would serve no purpose. It was held in Makhan Lal Kela (supra) that the ordinary manner in which a person can sell his property is by a sale deed. The power incidental under Section 457(1)(e) to the power of sale could be a power to execute a sale deed but not a sale certificate. The issuance of a sale certificate as a document evidencing title is an exception to the normal mode of sale of property, which is by a sale deed. That power has, therefore, to be specifically conferred by the statute to make the liquidator empowered by law within the meaning of Article 18. As commonly understood, a sale deed is executed by the owner or by his agent. Neither the Court nor the Collector, however, is the owner of the property or the agent of the owner. They have been given statutory power to issue a sale certificate as a document of title. The position of the liquidator is different. He acts as the agent of the company, which is the owner of the property. He can, therefore, execute a sale deed on behalf of the company and it is this capacity of the liquidator as an agent of the company, which has been recognised under Section 457(2)(i) of the Companies Act.
10. There is one more aspect of the matter, Article 18 would apply only if the sale is made by public auction. Section 457 of the Companies Act gives power to the official liquidator to sell the property by public auction or by private sale. It is not in dispute between counsel for the parties that the mode adopted in the present case was a sale by inviting tenders and the only submission of Sri. R. N. Singh, learned counsel for the petitioner on this point is that a sale by inviting tenders is a sale by public auction, I do not agree with the contention advanced.
11. Rule 273 of the Company Court Rules provides for sale by public auction or by inviting sealed tenders or in any other manner as the Court may direct. When the expression ‘public auction’ and ‘sale by inviting sealed tenders’ in the same rule are used to describe modes of sale it Is obvious that the two expressions carry a different meaning, Sale by sealed tenders must mean a different mode of sale than a public auction. If ‘sale by sealed tender’ is also covered under the expression ‘public auction’ one of the phrases would be a surplusage. Every word used in a statute must ordinarily be taken to convey some meaning and the presumption is that the Legislature does not use words, which are redundant.
12. Sri R.N. Singh, learned counsel for the petitioner submitted that the doctrine of ejusdem generis should be applied and that sale by tender is of the same species as a public auction. The doctrine of ejusdem generis is applicable when particular words pertaining to a class, category, or genus are followed by general words. In such a case, the general words are construed as limited to things of the same kind as those specified vide Kavalapper v. State of Madras, AIR 1960 SC 1080. The general words used in the rule are “or in such manner as the Judge may direct”. By applying the doctrine, the general words would relate to a mode of sale of the kind of public auction or by inviting sealed tenders. The doctrine cannot be applied to interpret the two expressions public auction and sale by tender used in Rule 272 as being synonymous. In State Level Committee and Anr. v. M. S. Margardshammar India Ltd., AIR 1996 SC 524, the Supreme Court observed : “All the words used in the clause have to be given their due meaning. None of these can be treated as “surplusage”. It is not also possible to ignore the words expressly employed in the said clause or to explain them away on notions of one’s own reasonableness.”
13. Sri. R. N. Singh relied upon a decision of the Apex Court in Chairman and Managing Director, S.I.P.C.O.T. Madras and Ors. v. Contromix Pvt. Ltd., AIR 1995 (2) SC 1632, by its Director (Finance) Seetharaman, Madras and another in support of his contention regarding the wide meaning of public auction. I am of the view that the decision does not help the petitioner. In paragraph 12 of the decision the Apex Court says : “Public auction after adequate publicity ensures participation of every person who is interested in purchasing the property and generally secures the best price. But many times it may not be possible to secure the best price by public auction when the bidders join together so as to depress the bid or the nature of the property to be sold is such that suitable bid may not be received at public auction. In the event the other suitable mode for selling of property can be by inviting tenders.” These words clearly indicate that sale by inviting tenders is a mode of sale different from a public auction.
14. The question was considered by the Bombay High Court in Gulabsingh v. Chandrapal Singh and Ors., AIR 1987 Bom 90. In that case distinction between sale by public auction and sale by tender has been noticed. It was held that (18) “I may usefully refer in this regard to the Halsbury’s Laws of England Volume 2 Fourth Edition for what an auction means. Para 701 on page 360 is relevant. According to Halsbury’s Laws of England, “the auction is a manner of selling or letting property by bids, usually to the highest bidder by public competition. The prices which the public was asked to pay are the highest which those who bid can be tempted to offer by the skill and tact of the auctioneer under the excitement of open competition.” It is thus clear that an auction is held by public competition wherein every bidder has right to raise his own bid. It is also clear that in public auction; the atmosphere herein created by open bidding can tempt the bidder to raise his bid and thus enhanced price can be fetched by the said mode. (19) “In a sale by tender, however, no such opportunity is available to the tenderer. Once he gives his offer that is final and cannot be raised, whereas in public auction each bidder knows the bid of the other person. In the mode of sale by calling for offers or tenders, none of the persons or tenderers know the price offered by the other. In regard to the tenders, it is observed in Halsbury’s Laws of England, Volume 9, Fourth Edition para 230 on page 101 that an advertisement that good or services are to be bought or said by tender is not, prima facie, an offer to sell to the person making the highest tender”. It is, therefore, clear that by sale by tender or by calling for offers, the highest bid need not be accepted.”
The dictionary meaning of public auction given in Black’s Law Dictionary, revised Fourth Edition is :
“Auction. – A public sale of land or goods, at public outcry to the highest bidder. Perry Trading Co. v. City of Tallahassee, 128 Fla 424, 174 So, 854, 857, I11 ALR 463.
15. A sale by auction is a sale by public outcry to the highest bidder on the post. Barber Lumber Co. v. Gifford, 25 Idaho, 645, 139 P 557, 560.
16. While auction is very generally defined as a sale to the higher bidder, and this is the usual meaning, there may be a sale to the lowest bidder, as where land is sold for non-payment of taxes to whomsoever will take it for the shortest term; or where a contract is offered to the one who will perform it at the lowest price. And these appear fairly included in the term “auction” Abbott.
Dutch Auction
17. A method of sale by auction which consists in the public offer of the property at a price beyond its value and when gradually lowering the price until some one becomes the purchaser. Crandall v. State, 28 Ohio St. 482.
Public Auction
18. A sale of property at auction, where any and all persons who choose are permitted to attend and offer bids. The phrase imports a sale to the highest and best bidder with absolute freedom for competitive bidding. State v. Millider, 52 Mont. 562, 160 P 513, 515.
19. Though this phrase is frequently used, it is doubtful whether the word “public” adds anything to the force of the expression, since “auction” itself imports publicity. If there can be such a thing as a private auction, it must be one where the property is sold to the highest bidder, but only certain persons, or a certain class of persons, are permitted to be present or to offer bids.
20. For what has already been discussed I am of the view that in this case there was no sale by public auction and the instrument is not covered by Article 18 of Schedule IB but is a conveyance under Article 23.
21. It was lastly submitted by Sri R. N. Singh that the Chief Controlling Revenue Authority has directed that the plant and machinery, which was sold be valued by a technical committee but such a direction could have been given only after a finding upon the petitioner’s contention that the plant and machinery which were sold by separate lot are subject matter of another sale transaction and cannot be clubbed together for the purpose of computing the market value of the property which is subject matter of the instrument in question. This contention of the learned counsel for the petitioner that no finding on this point has been recorded does appear to have some force. After noticing this and various other contentions of the learned counsel for the parties the Chief Controlling Revenue Authority has directed the valuation of plant and machinery but has not decided the point. To this extent the order of the Chief Controlling Revenue Authority is liable to be set aside. The Chief Controlling Revenue Authority will decide the question whether the value of the plant and machinery can be clubbed with that of the land for the purposes of determining the market value of the subject matter of the instrument before issuing direction for valuation of the plant and machinery by a technical valuation committee. Sri. R. N. Singh learned counsel for the petitioner also submits that the provision of Section 47A of the Stamp Act cannot be invoked in the present case because the instrument having been executed under the order of the Company Judge and the sale having been confirmed by the Company Judge there was no question of the true market value not being set forth in the instrument which is the requirement for proceeding under Section 47A (4) of the Stamp Act. As the case is being remanded it would be open to the petitioners to raise this and other contentions before the Chief Controlling Revenue Authority. The Court is thankful to the assistance rendered by Sri Sanjay Goswami, learned standing counsel and Sri. R. N. Singh, counsel for the petitioner. Counsel for both the parties agree that the matter may be expeditiously decided by the Chief Controlling Authority. The order of the Chief Controlling Revenue Authority is set aside. It is directed that the authority may decide the matter afresh in accordance with law and, if possible, within six months from the date a certified copy of this order is produced before it.
22. The writ petition is party allowed.