2002 (10) TMI 692 - HC - Companies Law

Issues:
1. Application for relief to sell company assets as per B.I.F.R. order.
2. Permission for Assets Sales Committee to sell assets through public advertisement.
3. Default on working capital facilities leading to recovery application.
4. Dispute between Indian Bank and Official Liquidator on sale of assets.
5. Conflict between B.I.F.R. directions and Official Liquidator's actions.
6. Legal implications of granting leave to sell assets by Indian Bank.

Issue 1: Application for relief to sell company assets as per B.I.F.R. order
The Indian Bank filed two Company Applications seeking permission to sell company assets as directed by the B.I.F.R. due to the company being declared a sick industry. The Bank had proposed a one-time settlement that lapsed due to non-payment by the company, leading to the B.I.F.R. recommending winding up. The Bank sought leave from the Court to proceed with the asset sale.

Issue 2: Permission for Assets Sales Committee to sell assets through public advertisement
The Bank requested permission for the Assets Sales Committee, formed by the B.I.F.R., to sell company assets through public advertisement and deposit the proceeds in Court for distribution. The Bank highlighted the importance of selling assets transparently and in accordance with legal guidelines.

Issue 3: Default on working capital facilities leading to recovery application
The Bank had provided working capital facilities to the company, which defaulted, leading to a recovery application pending before the Debts Recovery Tribunal. The Bank sought to recover a significant sum from the company and its guarantors.

Issue 4: Dispute between Indian Bank and Official Liquidator on sale of assets
A dispute arose between the Indian Bank and the Official Liquidator regarding the sale of company assets. The Bank argued that the Official Liquidator's actions were hindering the asset sale process, while the Official Liquidator emphasized the need for valuation and submission of reports before proceeding with the sale.

Issue 5: Conflict between B.I.F.R. directions and Official Liquidator's actions
The Assets Sales Committee, as per B.I.F.R. directions, was tasked with overseeing the sale of assets. However, the Official Liquidator's actions seemed to deviate from these directions, causing delays and potential hardships in the asset sale process.

Issue 6: Legal implications of granting leave to sell assets by Indian Bank
The Court deliberated on whether to grant leave to the Indian Bank to sell company assets independently or to allow the Official Liquidator to proceed with the sale as per court orders. The Court decided against interfering with the Official Liquidator's actions, as doing so could jeopardize the interests of the company, secured creditors, and other stakeholders.

In conclusion, the Court dismissed both Company Applications, emphasizing the importance of allowing the Official Liquidator to proceed with the sale of company assets in accordance with legal requirements, thereby safeguarding the interests of all parties involved.

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