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Issues:
1. Interpretation of provisions under the Companies Act, 1956 and the State Financial Corporations Act, 1951 regarding the rights of a secured creditor in a company in liquidation. 2. Whether the official liquidator must be associated with the sale of assets by a secured creditor outside the winding up process. 3. Resolution of Company Application No. 1464 of 1989 seeking the handover of assets for sale under section 29 of the Companies Act, 1956. 4. Disposal of I.A. No. 2 regarding the highest offer for the purchase of company assets. Analysis: 1. The appeals involved the question of whether the Karnataka State Financial Corporation, a secured creditor, could exercise its powers under section 29 of the State Financial Corporations Act outside the winding up process to enforce its security against a company in liquidation. The court held that the official liquidator, representing the company in liquidation, has the authority to recover sums due to secured creditors and enforce charges under the Companies Act, limiting the rights of the secured creditor to deal with the company's property. 2. The court ruled that even though a secured creditor stands outside the winding up process, once the official liquidator is appointed, they must be associated with the sale of the company's assets by the creditor. This decision was based on the principle that the official liquidator should be involved in the disposal of assets, as mandated by section 529(1) of the Companies Act. The judgment was influenced by the Supreme Court decision in Mahesh Chandra v. U.P. Financial Corporation. 3. The court addressed the resolution of Company Application No. 1464 of 1989, where the Karnataka State Financial Corporation sought possession of the company's assets for sale under section 29 of the Companies Act. The application was granted, leading to the appeal in O.S.A. No. 1 of 1991, challenging the order for handover of assets. 4. The court disposed of I.A. No. 2, concerning the highest offer for the purchase of company assets. The applicant had submitted an offer and deposited a sum with the respondent. The court directed that the applicant's offer should be considered in the fresh advertisement for asset sale, and the deposited amount would abide by the final result. The applicant was allowed to give a fresh offer without an additional deposit, and in case of non-acceptance, the court would decide on the repayment of the deposited amount.
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