2012 (8) TMI 412 - HC - Companies Law

Winding up application for cancelation of sale of the property which is mortgaged to the applicant-Corporation - applicant financed the 1st respondent company - Similarly the 2nd respondent K.S.I.I.D.C, had also financed the 1st respondent Held that - Proceedings, the 2nd respondent K.S.I.I.D.C. had filed an application to stand outside the winding up and recover the amounts due to it - K.S.I.I.D.C., initiated steps for sale of the properties belonging to the company in liquidation - applicant cannot make out any grievance in the instant application inasmuch as they have concerned to the entire process of sale by K.S.I.I.D.C. - It is in the presence of the 2nd respondent, this Court disposed of the said application on 15-6-2006 conforming the sale of the property application dismissed

Issues:
1. Application under Rule 9 of the Company Court Rules seeking cancellation of property sale and alternative relief.
2. Dispute over the sale of mortgaged property of M/s. Mysore Tissues Pvt. Ltd.
3. Consortium lending involving the applicant, 2nd respondent, State Bank of India, and Industrial Re-construction Bank of India.
4. Winding up petition against M/s. Dunford Fabrics Private Limited.
5. Sale of properties belonging to the company in liquidation by 2nd respondent.
6. Applicant's grievance against the sale of property belonging to the 4th respondent.
7. Confirmation of sale by the Court and applicant's lack of objection during the proceedings.
8. Maintainability of the instant application after the Court's order.
9. Consideration of alternate relief through the Official Liquidator.

Analysis:
1. The applicant, Karnataka State Financial Corporation (K.S.F.C.), filed an application seeking to cancel the sale of M/s. Mysore Tissues Pvt. Ltd.'s property mortgaged to the applicant. An alternative prayer was made for the Official Liquidator to pay the indicated amount. The contesting respondents, the 2nd and 3rd respondents, opposed the application.

2. The applicant contended that they financed M/s. Dunford Fabrics Private Limited, with M/s. Mysore Tissues Pvt. Ltd. guaranteeing repayment. The 2nd respondent, K.S.I.I.D.C., also provided financing. A consortium including the applicant, 2nd respondent, State Bank of India, and Industrial Re-construction Bank of India was involved in lending.

3. The winding-up petition targeted M/s. Dunford Fabrics Private Limited, leading to the 2nd respondent initiating steps for the sale of properties. The applicant objected to the sale of the 4th respondent's property, arguing it should not have been included in the sale process.

4. The respondents disputed the applicant's contentions, stating that properties charged to both the 2nd respondent and the applicant were liable for sale. The Court confirmed the sale, and the applicant was informed throughout the process.

5. The Court found that the applicant, being party to the proceedings confirming the sale, should have raised objections then. Failing to do so, the Court held that the order confirming the sale bound the applicant, rendering the current application not maintainable.

6. The Court emphasized that the applicant could pursue other legal remedies or claim before the Official Liquidator. The application was disposed of accordingly, with no positive directions given.

7. Therefore, the Court concluded that the application was not maintainable due to the earlier order confirming the sale. The applicant was advised to seek alternative legal remedies or approach the Official Liquidator for relief, which would be considered in accordance with the law.

← Previous Next →