9911796707
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Issues Involved:
1. Execution of Sale Deed 2. Jurisdiction of Company Court 3. Objections by Secured Creditors 4. Winding Up Proceedings Issue-wise Detailed Analysis: 1. Execution of Sale Deed: The applicant filed an application under Rules 6, 7, and 9 of Company Rules read with section 151 of C.P.C., seeking a direction for the respondent-company to execute a sale deed pursuant to an agreement dated 17-1-2002. The applicant supported the application with an affidavit stating that an agreement of sale was entered into and advance payments were made, but the respondent-company failed to complete the sale. The respondent opposed, claiming the applicant failed to pay the balance consideration and the property value had increased. The respondent also cited a recommendation from the Board for Industrial Finance and Reconstruction (BIFR) for winding up the company, making it impossible to execute the sale deed. 2. Jurisdiction of Company Court: The court examined whether it had jurisdiction to enforce the sale agreement. The court noted that the primary purpose of winding up proceedings is to ensure equitable distribution of the company's assets among creditors and stakeholders. It emphasized that allowing the sale of assets based on prior agreements would contradict the objective of winding up, which is to avoid preferential treatment of creditors. The court concluded that it could not grant the direction sought by the applicant as it would not benefit all creditors and shareholders but only the applicant. 3. Objections by Secured Creditors: Secured creditors, including a consortium of banks, opposed the application, stating that the property in question was mortgaged to them as security for loans. They argued that the sale agreement was not binding on them and that the company court lacked jurisdiction to enforce such agreements. The court acknowledged these objections, noting that the enforceability of the agreement was disputed and that such matters should be resolved in a civil court, not the company court. 4. Winding Up Proceedings: The court admitted the company petition for winding up based on BIFR's recommendation, which found no feasible rehabilitation scheme for the company. The court ordered the winding up of the respondent-company under section 433-E of the Companies Act and section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Official Liquidator was directed to take charge of the company's affairs, and the secured creditor, State Bank of Mysore, was instructed to advertise the winding-up order and serve a certified copy on the Registrar of Companies. Conclusion: The court rejected the application for directing the execution of the sale deed, stating that the company court could not grant such a direction as it would not benefit all creditors and shareholders. The court admitted the company petition for winding up and directed the Official Liquidator to take charge of the company's affairs. The secured creditor was instructed to advertise the winding-up order and ensure compliance with procedural requirements.
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