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SOLR_PROP

Companies Act, 1990

Duty of receiver selling property to get best price reasonably obtainable.

172.The Principal Act is hereby amended by the insertion after section 316 of the following section—

“316A.—(1) A receiver, in selling property of a company, shall exercise all reasonable care to obtain the best price reasonably obtainable for the property as at the time of sale.

(2) Notwithstanding the provisions of any instrument—

(a) it shall not be a defence to any action or proceeding brought against a receiver in respect of a breach of his duty under subsection (1) that the receiver was acting as the agent of the company or under a power of attorney given by the company; and

(b) notwithstanding anything in section 316 (2), a receiver shall not be entitled to be compensated or indemnified by the company for any liability he may incur as a result of a breach of his duty under this section.

(3) (a) A receiver shall not sell by private contract a non-cash asset of the requisite value to a person who is, or who, within three years prior to the date of appointment of the receiver, has been, an officer of the company unless he has given at least 14 days' notice of his intention to do so to all creditors of the company who are known to him or who have been intimated to him.

(b) In this subsection—

(i) ‘non-cash asset’ and ‘requisite value’ have the meanings assigned to them by section 29 of the Companies Act, 1990, and

(ii)officer’ includes a person connected, within the meaning of section 26 of the Companies Act, 1990, with a director, and a shadow director.”.