2012 (1) TMI 378 - HC - Indian Laws

Summary

Issues Involved:

1. Validity of the sale of properties u/s 537(1)(b) of the Companies Act, 1956.
2. Direction to the purchaser to hand over properties to the Official Liquidator.
3. Direction to secured creditors to bring back money taken along with accrued interest for dividend declaration to workers u/s 529A of the Companies Act, 1956.

Summary:

Issue 1: Validity of the Sale of Properties u/s 537(1)(b) of the Companies Act, 1956

The Official Liquidator sought to declare the sale of properties as null and void, arguing it violated section 537(1)(b) of the Companies Act, 1956. The purchaser, M/s. Ajanta Pharma Ltd, contended that the sale was valid, binding, and subsisting. The Court noted that the winding-up process commenced with the presentation of the winding-up petition on 10th September 1999, but the sale deed was executed on 7th July 2009, before the winding-up order on 7th July 2010. The Court emphasized that the transaction was bonafide, for consideration, and aimed at settling the dues of secured creditors, workers, and unsecured creditors. The Court held that the sale was valid and should not be set aside.

Issue 2: Direction to the Purchaser to Hand Over Properties to the Official Liquidator

The Official Liquidator requested the Court to direct M/s. Ajanta Pharma Ltd to hand over the properties. The Court found that the sale was executed with bonafide intention and the dues of secured creditors and workers were settled. The Court exercised its discretion to protect the transaction, noting that the company and the purchaser acted in good faith. Consequently, the Court did not direct the purchaser to hand over the properties to the Official Liquidator.

Issue 3: Direction to Secured Creditors to Bring Back Money Taken Along with Accrued Interest for Dividend Declaration to Workers u/s 529A of the Companies Act, 1956

The Official Liquidator sought directions for secured creditors to bring back the money taken along with accrued interest to declare dividends to workers u/s 529A of the Companies Act, 1956. The Court allowed the Official Liquidator to determine the dues of workers and seek appropriate directions against the secured creditors. The Court left open the course for the Official Liquidator to adjudicate the claims of workers and obtain undertakings from secured creditors to bring back the amounts.

Conclusion

The Court validated the sale of properties, dismissed the Official Liquidator's prayer to declare the sale null and void, and allowed the Official Liquidator to determine workers' dues and seek directions against secured creditors. The company application was made absolute in terms of prayers (a) and (b), and the Official Liquidator's report was rejected.