9911796707
TMI Blog1997 (3) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... ters, all these matters are being considered and disposed of with the consent of the parties by this common judgment. Company Application No. 115 of 1992 and Misc. Application No. 6 of 1992 : Company Application No. 115 of 1992 is filed by the official liquidator who has been appointed to take possession of the properties belonging to Amruta Mills Ltd. In Company Petition No. 72 of 1991, an order of winding up of the said Amruta Mills was passed on November 22, 1991. The official liquidator has filed this Company Application No. 115 of 1992, seeking directions from this court to sell the property of which he has taken possession and to get directions as regards the manner in which the sale is to be effected. In this application he has shown all the secured creditors of the said company as respondents along with the Textile Labour Association (TLA) as respondent. One of the said secured creditors is Industrial Finance Corporation of India (IFCI). The said secured creditor of Amruta Mills (IFCI) has filed this Misc. Application No. 6 of 1992, titling it as an application under section 30 of the Industrial Finance Corporation of India Act, 1948. It is the claim of the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as deed of mortgage and had furnished other documents by way of securities. It is the claim of the applicant that said company owes to the applicant an amount of Rs. 1,63,27,167 as on November 15, 1995, and further interest and costs and for that purpose the properties belonging to the said company may be allowed to be sold by the applicant by exercising the powers under section 40 of the Industrial Reconstruction Bank of India Act, 1984. Company Application No. 210 of 1996, with Misc. Application No. 37 of 1991: Company Application No. 210 of 1996 is filed by the official liquidator showing the State Bank of India, IRBI and TLA as opponent. The official liquidator is seeking a permission of this court to sell the property and he further wants a direction regarding the sale of the property belonging to Omex Instores Ltd. which has gone into liquidation as per the order of winding up passed on March 6, 1990, in Company Petition No. 156 of 1990. Miscellaneous Application No. 37 of 1991 is filed by the IRBI purporting to be an application under section 40 of the Industrial Reconstruction Bank of India Act, 1984 (IRBI Act). It is the claim of the applicant that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not entitled to participate in the sale committee. The applicants in Misc. Applications Nos. 31 of 1995, 37 of 1991 and 38 of 1991 are represented by Mr. Singhi. He also contends that the sale which he is seeking in these proceedings is a sale under section 40 and, therefore, neither the official liquidator nor the TLA are entitled to participate in the said proceedings and he has no objection to appoint a sale committee for selling the property, but according to him, the representative of the TLA should not be a member of the sale committee. All the other secured creditors, viz. , SBI, Punjab National Bank, IDBI, ICICI have no objection to selling the property through the sale committee, but they also do not want the TLA to be a member of the sale committee. I will first deal with Misc. Application No. 6 of 1992, before considering the claim of the applicant that his application is under section 30 of the IFCI Act, 1948, and he alone is entitled to sell the property. For considering this aspect, it is necessary to mention certain salient facts and circumstances. There is no dispute of the fact that Amruta Mills, which has gone into liquidation had taken a loan from the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be carried into effect as far as may be practicable in the manner provided in the Code of Civil Procedure, 1908, for attachment or sale of property in execution of a decree as if the Corporation were the decree holder." In Misc. Applications Nos. 31 of 1995, 37 of 1991 and 38 of 1991, the applicant is IRBI. In all these three applications, it is the claim of the applicant that the sale of the property of the company which has been wound up should be effected under the provision of section 40 of the IRBI Act, 1984. Miscellaneous Application No. 31 of 1995 is filed in respect of the company, Nutan Mills Ltd. The said application is filed on October 25, 1995. But the said company Nutan Mills is ordered to be wound up by the order, dated July 6, 1993, in Company Petition No. 64 of 1993. In Misc. Applications Nos. 37 of 1991 and 38 of 1991, the applicants have sought for the permission to sell the property of Omex Interstores and New Gujarat Synthetics Mills Ltd. The company Omex Interstores Ltd. has gone into liquidation as per the order of winding up on March 6, 1990 in Company Petition No. 156 of 1990, whereas the Misc. Application No. 37 of 1991 is filed on February 8, 1991 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The miscellaneous applications are no doubt of secured creditors and they are entitled to remain out of the liquidation proceedings and they have a right to proceed against their securities in order to recover their dues. But, for that purpose, in view of the provisions of the special Act under which they have come they ought to have taken recourse to the specific provisions in order to get priority over other creditors before passing of orders of winding up of these companies. Thus I hold that all these four miscellaneous applications seeking relief under the special Acts are tenable, but the applicants cannot claim any preferential rights over other creditors of these companies. However, all the applicants will have to produce all the material to satisfy this court as to what are the dues of each of the applicants against the debtor company. On their producing that material the amount of sale proceeds would be distributed among all the secured creditors and the workers of mills. But in view of the fact that the mill companies are closed down and winding up orders are passed long back, I hold that in the interest of all the parties, I should proceed to effect the sales of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittee. A sale committee is a creation of the courts. The sale committee is appointed by the court with a view to see that the interest of the secured creditors as well as the labourers and unsecured creditors is fully protected and achieved. The sale committee is appointed in order to see that the maximum possible price for the property to be sold is received. There is another purpose in appointing the sale committee and that is to avoid making allegations against the sole individual, whether official liquidator or single agent, who is directed to sell the property and to avoid investigation of the allegations against such sole persons. Generally, representatives of the secured creditors are taken on the sale committee with a view to see that property which is either hypothecated or mortgaged fetches proper and good value so as to see that their dues are fully recovered. Thus appointment of a sale committee is always in the interest of all persons who are interested in securing their dues and it is also in the interest of the company which has gone into liquidation. There could not be any legal objection to an appointment because it could not be said that by appointing a sale comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to realise his security‑ ( a )the liquidator shall be entitled to represent the workman and enforce such charge ; ( b )any amount realised by the liquidator by way of enforcement of such charge shall be applied rateably for the discharge of workmen's dues ; and ( c )so much of the debt due to such secured creditor as could not be realised by him by virtue of the foregoing provisions of this proviso or the amount of the workmen's portion in his security whichever is less, shall rank pari passu with the workmen's dues for the purposes of section 529A." (emphasis supplied) Now if the above provisions are taken into consideration, then it would be quite clear that clause ( a ) of the proviso to sub-section (1) of section 529 lays down that where the secured creditor instead of relinquishing his security and proving his debt, opts to realise his security, the liquidator shall be entitled to represent the workmen and enforce their charge which is declared as a pari passu charge by the proviso. Now if that proviso is considered then, it would be quite clear, the representation of the workmen by the official liquidator is in case of a sale carried out by the secured cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in that case also, the learned single judge does not say that representative of workmen could not be a member of the sale committee. Then he also cited before me the decision of the Division Bench of this court in the case of Gujarat State Financial Corporation v. Official Liquidator, Himalaya Tools ( P ) Ltd. [1996] 87 Comp Cas 658 in Company Petition No. 16 of 1991, decided on October 7, 1994 [1996] 1 Comp LJ 503 (Guj). Now in that case also, the Gujarat State Financial Corporation and Bank of Maharashtra were the secured creditors of the company, M/s. Himalaya Tools (P) Ltd. had already taken over possession of the company and had sold the same to another company after receiving a certain amount and thereafter, the official liquidator has filed a Company Application No. 36 of 1990, seeking an order of the court to ask the said secured creditors to hand over the sale proceeds of the property transferred to the third party and to deliver possession of the remaining property of the company which had gone into liquidation and though that claim of the official liquidator was allowed by the company judge, the same is rejected by the Division Bench by allowing that appeal. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property of Nutan Mills Ltd. should be sold through the sale committee consisting of the official liquidator and the representatives of five secured creditors mentioned in the said application and the representative of the TLA ; but the chairman of the said sale committee should be the representative of the IRBI and the proclamation/advertisement should be issued in his name. Secured creditors are at liberty to nominate anybody on their behalf to the sale committee. In Misc. Application No. 37 of 1991, the IRBI to spend the money for advertisement/sale proclamation and incidental expenses. In view of allowing Misc. Application No. 37 of 1991, Company Application No. 201 of 1996 is rejected. In Misc. Application No. 38 of 1991, it is directed that the property of Nutan Mills Ltd. should be sold through the sale committee consisting of official liquidator and the representatives of five secured creditors mentioned in the said application and the representative of the TLA but the chairman of the said sale committee should be the representative of the IRBI and the proclamation/advertisement should be issued in his name. Secured creditors are at liberty to nominate anybody on their ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
