4702 4703 of 1994.
As per the resolution passed in its Board meeting held on 30.11.1990, it was resolved to accept the bid of M s Raheja Development Corporation.
The Company Judge disposed of the application holding that, in view of the order passed by this Court, the application did number survive.
The companypany having defaulted in repayment of the loans according to the schedule, the KSFC issued a numberice and took over the mortgaged and charged assets under Section 29 of the SFC Act.
The loans were secured by mortgages and charges on the assets of the respondent companypany.
The Official Liquidator appealed against the order of the Company Judge praying that the sale of the assets of the companypany under liquidation should only be done by the Official Liquidator under the supervision of the Company Court.
85 lakhs made by Raheja Development Corporation for sale of the mortgaged assets of the said companypany, although, to its knowledge, the assets charged were totally valued at an estimated value of Rs.97 lakhs.
The said companypany was ordered to be wound up on 25.1.1988 by the Company Court.
On 10.11.89, during the pendency of the above petitions before the High Court of Karnataka, the respondent, a Corporation established under the State Financial Corporation Act.
6303 of 1995 A companypany known as Himalaya Tools India Pvt.
An application for review, Review, Application No.
4,5,6 7 were dismissed.
118/93, was also dismissed by the High Court of Karnataka.
Civil Appeal No.
M s Raheja Development Corporation appealed against the order of the Company Judge raising similar companytentions as urged by the KSFC.
26/91 was dismissed by a Division Bench of the High Court of Karnataka.
The repayment of the borrowed money was secured by mortgage of the factory premises and hypothecation of plant and machineries of the said M s. Prasad Bakers Pvt.
The Division Bench dismissed the appeal by taking the same view as the Company Judge.
131 of 1988 made an order of winding up of International Coach Builders Ltd. and appointed the Official Liquidator as the Liquidator to take charge of the assets of the said companypany.
6491 of 1995 A companypany known as M s. Prasad Bakers Pvt.
The Official Liquidator filed two Special Leave Petitions before this Court challenging the order of the Division Bench dated 23rd January, 1992 dismissing the appeal OSA No.26/91, and the order dated 17th June, 1993 dismissing the Review Application No.
The appellant Corporation appeared before the Company Judge and companytended that it was a secured creditor having first charge over the mortgaged property and, despite companymencement of the winding up proceeding, entitled to exercise its powers under Section 29 of the SFC Act to put to sale the mortgaged assets without leave of the Company Court.
2007 of 1997 The respondent companypany obtained large amounts of loans advances from the appellant Karnataka State Finance Corporation KSFC .
At numberpoint of time was permission of the Company Court taken, number was the sale approved by the Company Court.
On 9.5.1988, in purported exercise of rights under Section 29 of the SFC Act, the Gujarat State Financial Corporation GSFC took possession of the charged assets of the said companypany.
On 30.11.1990 the High Court of Karnataka in Company Petition No.
Civil Appeal No.
Ltd. had borrowed money from the Gujarat State Financial Corporation.
2003 2 SCR 631 The Judgment of the Court was delivered by SRIKRISHNA, J. These appeals arising under different factual background raise the same question of law and can, therefore, companyveniently be disposed of by a companymon judgment.
These are respectively Civil Appeal Nos.
Hence, the need for this Court to settle the law.
Civil Appeal No.
On 30.11.90 the respondent Corporation accepted a bid of Rs.
In the meanwhile, at the instance of a creditor of the respondent companypany the companypany was ordered to be wound up.
On 4.3.1991 the respondent filed an application under Section 446 2 b read with Section 537 of the Companies Act, 1956 before the High Court of Karnataka praying for leave to stand outside the winding up proceedings and realize its securities by selling the assets mortgaged to it.
On 8.10.1991 the Company Court allowed the application of the respondent Corporation for standing outside the liquidation proceeding to work out its remedies under Section 29 of the SFC Act subject to an undertaking to discharge the workmens dues.
118/93.
The KSFC made an application to the Company Judge under Section 537 of the Companies Act, 1956 for permission to stand outside the winding up proceedings and realize its security.
On 18.9.1987 the appellant, in purporting to exercise its power under Section 29 of SFC Act, took possession of the mortgaged assets.
Civil Appeal No.
The KSFC is in appeal and raises the same companytentions with regard to its rights under Section 29 of the SFC Act.
4702 and 4703 of 1994 On 23rd May, 1988 a winding up petition was filed under Section 433 of the Companies Act, 1956 seeking to wind up the companypany known as International Coach Builders Ltd. Another petition by another creditor was also filed on 2.11.88.
12928 of 1996 As a seque to the above order, M s Raheja Development Corporation moved an application before the Company Judge, High Court of Karnataka, for a direction to the Official Liquidator to companycur in the sale effected by Karnataka State Finance Corporation KSFC in its favour.
M s Raheja Development Corporation made an unsuccessful attempt to intervene in Civil Appeal No.4702/94 by seeking relief therein, but its applications I.A. Nos.
The second respondent defaulted in repayment of the loan and the appellant called in the money by a numberice dated 30th June 1997.
An appeal to the Division Bench also failed.
Conflicting views have been taken by different High Courts on this issue.
The Official Liquidator of the said companypany took out a judges summons seeking a direction to GSFC forthwith to hand over possession of the asset of the companypany in liquidation.
Meanwhile, it appears appropriate that the Respondent KSFC should sell the properties acting jointly with the Official Liquidator under the supervision and in accordance with the direction of the Learned Company Judge of the High Court and sale proceeds be deposited in the Court and then distributed in accordance with the direction of the Learned Company Judge.
Special Leave Petition granted.
When the Special Leave Petitions came up for admission this Court made the following order.
Facts Civil Appeal Nos.
The learned Company Judge dismissed the petition of the respondent.
1951 SFC Act , which was the second charge holder on the assets of the said companypany, took possession of the mortgaged assets of the said companypany in purported exercise of its power under Section 29 of the SFC Act.
Ltd. the second respondent in the appeal .
Neither the Official Liquidator, number the Company Court, was in any way involved with the negotiations held by the respondent Corporation with the prospective purchaser.
An appeal carried to the Division Bench was summarily dismissed.
In the meanwhile, the first respondent, a creditor of the second respondent, had filed a petition under Section 433 e of the Companies Act on which the High Court of Allahabad made an order dated 1.2.1994 for winding up of the second respondent companypany.
The learned Company Judge rejected the submission made on behalf of the appellant Corporation and directed winding up of the companypany.
The appellant is before this Court.
Hence, the appeal by the Corporation.
