I sympathise with your views, Sriram, but what we don't know is how Scottish Law deals with insolvency. To me, it appears that the sequestrators responsible for realising the assets of the insolvent company may have treated customers' property as assets of the insolvent company. They may even seen a bit of old cloth and thought that it was rubbish!
Perhaps the distraught family could go to the police and report the dress stolen.