2019 (11) TMI 1386 - Tri - Companies Law

Restraint on alienating /transferring the assets of the respondent s company - mortgage of property - HELD THAT - In view of the urgency that the Respondent Company become an NPA, the argument advanced by the learned Senior Counsel is gone into very carefully and in view of the submissions made by the Petitioner we hereby direct both the parties to maintain status-quo for a period of 14 days, in the meanwhile, the Respondent is at liberty to proceed in exercising his rights as secured creditor after the next date of hearing. We also make it very clear that any sale that would taken up by the JM Financial Services, if it found to be in collusion with the Directors of the Respondent Company against whom the allegation of oppression and mismanagement are levelled, the sale will become subject matter of final decision on that particular day that means any sale is bound to be set aside in case it is found that the same is done in collusion with the Respondent Company. List this matter on 17.12.2019.

Summary

Issues:
1. Application for restrain order against alienating/transferring assets of respondent's company.
2. Dispute over the sale of properties by a Secured Creditor.
3. Urgency due to respondent company becoming an NPA.
4. Allegations of collusion in asset sale.

Analysis:
1. The petitioner filed a miscellaneous application seeking a restrain order against J.M. Financial Services and others from alienating or transferring the assets of the respondent's company.

2. J.M. Financial Services, as a Secured Creditor, had advanced a loan to the respondent company. The petitioner raised concerns about the properties being sold at a lower value than market price. The respondent agreed to wait for two weeks for the petitioner to find a buyer offering a better price. After this period, the respondent would be free to sell the property.

3. Due to the urgency of the respondent company becoming a Non-Performing Asset (NPA), the tribunal directed both parties to maintain status quo for 14 days. The respondent was allowed to exercise rights as a secured creditor after the next hearing. However, any sale by J.M. Financial Services found to be collusive with the respondent company's directors, facing allegations of oppression and mismanagement, would be subject to review and potential set aside.

4. The tribunal scheduled the matter for further hearing on 17.12.2019, emphasizing that any sale deemed collusive with the respondent company's directors would be carefully examined and could be invalidated. The order aimed to balance the rights of the parties involved while addressing the urgency and concerns raised regarding the asset sale process.