9911796707
TMI Blog1998 (11) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... ember 7, 1989, on a petition filed by a creditor. It appears that the financing institutions, viz., Industrial Development Bank of India (IDBI) (the first respondent) and other institutions filed suits in the High Court at Mumbai. This court allowed those suits to continue, by an order dated March 22, 1991. While so, the first respondent-bank filed an application, C.A. No. 279 of 1992, seeking the following directions: (1)To direct the official liquidator to sell the movable and immovable assets of the company in liquidation to the seventh respondent, viz., Chaitanya Papers Limited, on the terms and conditions contained in the letter of the applicant-bank as modified by its letter dated September 8, 1992; and (2)To direct the offici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay the entire term loan of Rs. 605 lakhs granted by the applicant-bank and respondents Nos. 3 to 5 (other financial institutions) can get 25 per cent. of the total interest accrued due on June 30, 1992. That amount should be paid in a phased manner with interest at the rate of 5 per cent. per annum from June 30, 1992, twice till payment. It is stated that the proposal was discussed in joint meeting of the applicant-bank as well as respondents Nos. 3 to 6, who supported the proposal. A summary of the proceedings of the joint meeting held on January 30, 1992 was drawn up and the same was filed in the annexure. In view of the present condition of the plant and machinery and the building, it was felt that the offer made by the seventh responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company under liquidation having vested with the official liquidator and the official liquidator having been empowered under the provisions of the Act to sell the movable and immovable property subject to the supervision of this court, a secured creditor or some other third party cannot seek permission from the court for private sale without reference to the official liquidator. It is further submitted that the official liquidator was never associated with the process of consideration of the seventh respondent's offer and was never apprised of the proposal received from the seventh respondent. It is also submitted by learned counsel appearing for the official liquidator that the normal principle of sale of the company's property by adve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to give effect to such deal. This would be virtually relegating the liquidator to a secondary position and amounts to acting in derogation of the powers advisedly conferred on the liquidator, subject to the overall superintendence of the company court. It may be that the financial institutions which are secured creditors thought it prudent and expedient to accept the offer of outright purchase made by the seventh respondent. But, the official liquidator ought to have been taken into confidence and the proposal should have been placed before the liquidator for his consideration and his concurrence, so that the liquidator could take appropriate steps to move the court to accord permission. It is a different matter if in spite of the official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years have elapsed. In these circumstances, we are not in a position to say definitely that the offer given by the seventh respondent is unfair and unreasonable. The important factor that ought to be taken into account is that the applicant-bank which is the lead financing institution had a meeting with the other financing institutions and they have come to almost a unanimous conclusion that the offer of the seventh respondent was the best in the circumstances. It is common ground that the amount realised on the disposal of assets will not be sufficient even to meet the claims of the second creditors, not to speak of other creditors. Therefore, no third party other than the secured creditors can possibly suffer any prejudice on account of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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