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Issues:
1. Direction to Official Liquidator to remove locks from the premises of the company in liquidation. 2. Permission to sell the mortgaged property of the company in liquidation. 3. Priority of Government dues over other dues payable to creditors. 4. Rights of State Financial Corporations and Official Liquidator in the sale of charged property. 5. Association of Official Liquidator in the sale of assets during winding up proceedings. Analysis: 1. The petitioner sought a direction for the Official Liquidator to remove locks from the company's premises in liquidation, taken over under the State Financial Corporations Act, 1951. Additionally, permission was requested to sell the mortgaged property. The petitioner had provided financial assistance secured by a mortgage deed, leading to possession of the land due to loan repayment failure. 2. The bank, as a creditor, detailed the financial assistance provided to the company-in-liquidation and initiated recovery proceedings under various acts. The total dues to the bank exceeded Rs. 2.5 crores, emphasizing the importance of safeguarding the bank's interests for proper realization of arrears. 3. Another petition by the Union of India aimed to direct the Official Liquidator to liquidate the company's properties and prioritize Government dues over other creditors, secured and unsecured, highlighting the need for orderly distribution of proceeds. 4. The judgment referenced previous cases to establish that State Financial Corporations cannot unilaterally sell charged property during winding up without involving the Official Liquidator representing the workmen's pari passu charge. The court emphasized the need for cooperation between charge holders for simultaneous realization of security. 5. Considering the above precedents, the court concluded that the Official Liquidator must be associated with the sale of movable and immovable property of the company-in-liquidation in collaboration with secured creditors. The sale process required confirmation by the Court, ensuring fair treatment of all stakeholders, including workers with pari passu charge. 6. Consequently, the Official Liquidator was permitted to sell the company's assets in association with secured creditors, subject to Court confirmation. The sale process had to be completed within four months, with the Official Liquidator directed to invite claims from workers and unsecured creditors through specified publications, streamlining the process for all parties involved.
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