9911796707
TMI Blog1993 (2) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... e, has been filed by the Rajasthan State Industrial Development and Investment Corporation Ltd. (RIICO), in which it has been prayed that leave be granted to the applicant-RIICO to remain outside the winding-up proceedings. An application has also been filed on behalf of the State Bank of India, stating therein that the Board for Industrial and Financial Reconstruction (BIFR), after conducting an enquiry under section 16 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, "the Act, 1985"), vide its order dated May 10, 1991, has recorded the opinion under section 20(1) of the Act, 1985, that it was just and equitable as also in public interest that the respondent-company should be wound up. This opinion was forwarde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther laws, which may be inconsistent therewith. The RIICO, therefore, being a secured creditor, opts to remain out of the winding-up proceedings by way of abundant caution, prays that leave be granted to RIICO to remain outside the winding-up proceedings, so that it may proceed to realise its dues in the manner provided under the provisions of the Act, 1951. It is pointed out by Shri G. S. Bapna, G. K. Garg and Sudhir Gupta, learned counsel that sections 529A and 530 of the Companies Act deal with preferential payments to be made, therefore, provision for making such payments, including the payments payable to workmen, shall have to be made from the sale proceeds. It is further pointed out that RIICO was party to the proceedings before BI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercises its power under section 29 of the Act, 1951. The RIICO has exercised its right under section 29 to sell the property and, in fact no leave of court is necessary. It may also be pointed out that the jurisdiction of this court may arise only when the sale is challenged on the ground that it is not bona fide and has been made for extraneous considerations. In such circumstances, this court may interfere, if any occasion so arises. In the matter under consideration, the company, admittedly, has taken loans from RIICO and ICICI. It has mortgaged and hypothecated its assets and properties in their favour by executing various documents. When the winding-up order was passed, all the assets of the company were in the possession of RIICO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted subject to confirmation of this court. It may be pointed out that section 46B of the Act, 1951, provides that the provisions of the Act, 1951, and of any rules or orders made thereunder shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Therefore, the rights of RIICO under section 29 and other relevant provisions of the Act cannot be curtailed. However, it may be pointed out that the position may be different in a situation, where the official liquidator has taken possession of the assets of the company after the winding up order has been passed by this court and, thereafter the financial institutions like RIICO/RFC want to exercise their powers under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng up proceedings was allowed. In Miscellaneous Application No. 16 of 1990 in S. B. Company Petition No. 1 of 1985 ( Ayrgee Engineering and Co. v. India Electricals Ltd. ), vide order dated November 29, 1991, the same view was taken. In the result, the application dated May 5, 1992, filed on behalf of the RIICO is allowed. However, it shall be liable to act in accordance with this order as also the order dated November 20, 1992, regarding advertising, sale, etc., of the property. It shall also keep the share of the sale proceedings ready for payment to the workmen regarding their claims as finalised by the official liquidator in accordance with the provisions of section 529A of the Act. In view of the above order, the stay order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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