9911796707
TMI Blog1993 (7) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... er and Jaipur out of the sale proceeds held by them. In this application there is no case made out for or prayer for approval or leave of the company court of the sale effected after commencement of winding up proceedings. Some of the salient facts of this case are as under: On April 9, 1988, the Board for Industrial and Financial Reconstruction (BIFR) formed a prima facie opinion that the company should be wound up and appointed the ICICI as the operating agency. The said opinion of the BIFR for winding up was forwarded to this court on June 23, 1988. In the meantime proceedings for the winding up of the company, Ratlam Ispat Limited, were instituted, vide a substantive petition filed in this court on March 31, 1989. While both the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en passed under the provision then under sub-section (3) of section 20 of that Act this court would appoint an officer of the operating agency if the operating agency gives its consent to act as liquidator of the sick industrial company. If such an appointment is made the officer shall be deemed to be and have all the powers of the official liquidator under the Companies Act. The Division Bench further recorded that "the sick industrial company, i.e., the appellant had to be wound up but now it would be taken that the appellant company has been wound up under section 20 of the aforesaid Act and the company judge shall proceed as if the company has been wound up under section 20". Thus in effect, the winding up was allowed to continue and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions led by the ICICI, and got its assets attached and sold on the plea that they (the financial institutions) were secured creditors and were outside the winding up. The Bombay High Court took on record the terms of agreement and passed a consent decree and directed sale of all the properties of the company in liquidation and confirmed the appointment of the court receiver notwithstanding the pendency of the winding up proceedings and the appeal against the winding up order. On February 27, 1991, before the appeal before the Division Bench of this court could be disposed of, the decree-holders obtained sanction for sale from the Bombay High Court on the lines indicated in the application under consideration. The effect of the order in ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the winding up; or ( b )any sale held, without leave of the court, of any of the properties or effects of the company after such commencement; shall be void. 2. Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government." The court here means the "company court" which had passed the winding up order. The provisions of section 537 are in absolute terms and do not admit of any exception and would relate back to the date of commencement of the proceedings for winding up. The expression contained in clause ( b ) of sub-section (1) of section 537 provides that if any sale is held without the leave of the court of any of the properties or effects of the company af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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