2017 (7) TMI 111 - HC - Companies Law

Taking over possession of Movable assets - Official Liquidator contended that the assets and properties of the company under liquidation are therefore required to be sold by a public auction by giving public advertisement and therefore, it is essential to constitute a sale committee for the said procedure - Held that - Having heard Ms. Bhoomi M. Thakore, learned advocate for the applicant and on perusal of the record of this report, the inventory report as well as the search report in particular and the minutes, the summons deserves to be accepted as prayed for in para 10(a). Considering the fact that there is only one secured creditor, a sale committee may be constituted as under 1) Official Liquidator as Chairman. 2) Official representative of respondent no.1 secured creditor. 3) Assistant Official Liquidator. Such sale committee shall undertake the process of disposal of assets and properties of the company under liquidation.

Summary

Issues: Official Liquidator's prayer for ratification of action regarding possession of movable and immovable assets, constitution of a sale committee for disposal of assets.

Analysis:

Issue 1: Ratification of Possession of Assets
The Official Liquidator sought ratification of actions related to taking over possession of movable assets and not taking over immovable property of the company under liquidation. The Court noted the appointment of the Official Liquidator for M/s. Cubit Tech Pvt. Ltd. and the efforts made to ascertain details of assets and properties. The Official Liquidator reported discrepancies regarding ownership of premises and possession claims by ex-directors and secured creditors. An inventory and valuation process was conducted to assess the movable items present in the premises. The Court, upon review of reports and submissions, accepted the Official Liquidator's actions and granted the prayer for ratification.

Issue 2: Constitution of Sale Committee
The Official Liquidator requested the constitution of a sale committee for the disposal of assets and properties of the company under liquidation through public auction. The Court considered the necessity of a sale committee due to the requirement of selling assets by public advertisement. Given the presence of only one secured creditor, the Court approved the formation of a sale committee comprising the Official Liquidator as Chairman, the official representative of the secured creditor, and the Assistant Official Liquidator. The sale committee was tasked with overseeing the process of asset disposal. The Court allowed the summons and disposed of the application with directions for the constitution of the sale committee.

In conclusion, the High Court of Gujarat granted the Official Liquidator's prayers for ratification of possession actions and the constitution of a sale committee for the disposal of assets and properties of the company under liquidation. The judgment highlighted the importance of following due process in liquidation proceedings and ensuring transparency in asset disposal through public auction under the supervision of the appointed officials.