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2020 (11) TMI 26 - HC - Companies LawRecovery of outstanding dues - Possession of the immovable property - permission to complete the process of sale of the said immovable properties under the provisions of the section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - permission to continue with the actions taken under the provisions of Sections 13 and 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. HELD THAT - The concern raised by the Official Liquidator with respect to the provisions of Section 529-A of the Companies Act, 1956, it is required to be noted that the said aspect has also been taken care of by the aforesaid principle. Therefore, in view of the principle laid down by the Apex Court in Pegasus Assets Reconstruction Private Limited vs. Haryana Concast Limited and Another 2015 (12) TMI 1472 - SUPREME COURT , the applicant - Company is permitted to continue with the auction process under the provisions of Sections 13 and 14 of the SARFAESI Act, 2002 concerning the secured assets. The applicant - Company is permitted to continue with the action, as laid down under proviso to sub-section (4) of Section 13 of the SARFAESI Act, 2002. Application allowed.
Issues:
- Applicant's prayer to withdraw notice and claim possession of immovable property for sale under SARFAESI Act - Applicant's request to continue actions under SARFAESI Act despite winding up proceedings - Interpretation of SARFAESI Act provisions in the context of Companies Act regarding secured creditor's rights and liquidator's role Analysis: 1. The applicant, Rare Assets Reconstruction Pvt. Ltd., sought relief to withdraw a notice and claim possession of specific immovable properties for sale under the SARFAESI Act to recover outstanding dues. The company in question, M/s. Polo Ceramics Pvt. Ltd., was ordered to be wound up, and the Official Liquidator issued a notice taking over assets. The applicant, as a secured creditor, asserted its rights under the SARFAESI Act and filed a Company Application seeking permission to complete the sale process of the properties. 2. The applicant relied on the Supreme Court's ruling in Pegasus Assets Reconstruction Pvt. Ltd. v. Haryana Concast Ltd., emphasizing a secured creditor's right to enforce security interest without court intervention. The applicant argued that the SARFAESI Act's provisions allow it to stay outside winding up proceedings and exercise its rights independently. The Official Liquidator requested the sale proceeds to be deposited as per the Companies Act, seeking court confirmation for the sale process. 3. The Court considered the Apex Court's interpretation of the SARFAESI Act in the Pegasus case, highlighting the rights of secured creditors and the role of the liquidator in cases of companies under liquidation. In line with the precedent, the Court permitted the applicant to proceed with the auction process under SARFAESI Act Sections 13 and 14 for the specified immovable properties. The applicant was allowed to continue actions under the SARFAESI Act, as provided in Section 13(4), ensuring compliance with the law. 4. The judgment aligned with the principles established by the Supreme Court, granting the applicant permission to exercise its rights under the SARFAESI Act independently of the winding up proceedings. The Court's decision safeguarded the applicant's interests as a secured creditor while acknowledging the liquidator's role in the process. Ultimately, the Company Application was allowed, and no costs were imposed in the matter.
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