Bombay High Court
Official Liquidator Of Shri ... vs M/S Bhuvneshwari Vyapaar Pvt. Ltd on 27 September, 2023
Bench: N. J. Jamadar
2023:BHC-OS:10805
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO.2534 OF 2021
IN
COMPANY PETITION NO.321 OF 2016
Mukesh Mehra ... Applicant
versus
State Bank of India and Ors. ... Respondents
in the matter of
Bhuveshwari Vyapaar Pvt. Ltd. ... Org. Petitioner
versus
Shri Someshwara Spun Pvt. Ltd. ... Org. Respondent
WITH
INTERIM APPLICATION (L) NO.13287 OF 2022
IN
COMPANY PETITION NO.321 OF 2016
State Bank of India ... Applicant
versus
Official Liquidator of Shri Someswara Spun
Pvt. Ltd. and Ors. ... Respondents
and
Bhuveshwari Vyapaar Pvt. Ltd. ... Org. Petitioner
versus
Shri Someshwara Spun Pvt. Ltd. ... Org. Respondent
WITH
OFFICIAL LIQUIDATOR'S REPORT NO.36 OF 2021
WITH
AND OFFICIAL LIQUIDATOR'S REPORT NO.9 OF 2023
Mr. Aseem Naphade i/by Mr. Ajit Rajgole, for Applicant in IAL 2534 of 2021 and for
Respondent No.5 in IAL 13287 of 2022.
Mr. Ajinkya Kurdukar with Mr. H.A.Khan, for Applicant in IAL 13287 of 2022.
Mr. Siddharth Samantaray with Mr. Sachin Kudalkar i/by Mr. Umesh Kurund for
Respondent Nos.2 and 3.
Mr. Shanay Shah, for Official Liquidator.
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CORAM : N.J.JAMADAR, J.
RESERVED ON : 31 JULY 2023
PRONOUNCED ON : 27 SEPTEMBER 2023
JUDGMENT :
1. The Interim Applications and the Official Liquidator's Report No.36 of
2021 arise out of the transactions which the company (in liquidation) through it's ex-
director professed to have entered into apparently with the consent of the secured
creditor of the company (in liquidation).
2. For the sake of convenience, the parties are referred to in the capacity in
which they are arrayed in IAL 2534 of 2021.
3. Mr. Mukesh Mehra - Applicant in IAL 2534 of 2021 and the ex-director
of the company ( in liquidation) seeks an order under Section 457(1)(c) of the Act,
1956 permitting the sale of the property of the company in liquidation and,
consequently, a direction to the Official Liquidator to execute the requisite
instruments in favour of Respondent Nos.2 to 4 - prospective purchasers.
4. By filing Interim Application (L) No.13287 of 2022, the State Bank of
India - Applicant - secured creditor initially sought to join ex-director in seeking a
direction to the Official Liquidator to complete sale and execute instruments in favour
of the prospective purchasers and allow the secured creditor to adjust the amount
which was received towards the outstanding debt.
5. The Official Liquidator, in turn, took out Official Liquidator's Report
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No.36 of 2021 seeking a declaration that the memorandum of understanding executed
to transfer the property of the company in liquidation are null, void and bad in law, and
cancellation of the said MOUs and the allied reliefs.
6. The Official Liquidator also took out Report No.9 of 2023 seeking
direction to sell the assets/properties of the company in liquidation through e-auction.
7. The background facts necessary for determining the applications and the
OLRs can be summarized as under :
7.1 Shri Someshwara Spun Pvt. Ltd. the company in liquidation, purchased
the factory having land, building and machinery situated at Bogi, Goundernur,
Tasar Patti Village, Kural Kuttai Road, Udumalpet, Kippur District (Udumalpet
Property).
7.2 The company in liquidation ran a spinning mill at the Udumalpet
property. The company in liquidation availed financial facilities from Respondent
No.1 - SBI by mortgating the land and building at Udumalpet property and
hypothecating the plant and machinery.
7.3 The company in liquidation also obtained a lease of factory situated at
Silvassa and the plant and machinery was installed therein. The Plant and Machinery
at Silvassa (Silvassa property) was also hypothecated by the company in liquidation in
favour of Respondent No.1 to avail financial facilities.
7.4 Respondent No.1 classified Shri Someshwara Spun Pvt. Ltd. as NPA.
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Notice under Section 13(2) of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was issued
by Respondent No.1 on 18 November 2014 calling upon Shri Someshwara Spun Pvt.
Ltd., to pay a sum of Rs.19,55,86,951/-.
7.5 Eventually, on 6 October 2015 Bhuveshwari Vyapaar Pvt. Ltd. -
Respondent No.5 filed a Company Petition No.321 of 2016. The Petition was
admitted on 5 February 2018. On 23 August 2018, this Court passed an order to wind
up Shri Someshwara Spun Pvt. Ltd., the company in liquidation.
7.6 Mr. Mukesh Mehra - the Applicant in IAL 2534 of 2021 claims to be ex-
director of the company in liquidation. It is the claim of the Applicant that the
Respondent No.1 - secured creditor obtained a valuation report in respect of
Udumalpet property as well as Plant and machinery at Silvassa. Attempts made by
Respondent No.1 to sell the property in the months of July 2019 and August 2020, did
not materalize.
7.7 In the meanwhile, Respondent No.1 introduced OTS Scheme (SBI OTS
2020). Respondent No.1 addressed a letter on 17 October 2020 apprising the
company in liquidation about the said OTS Scheme, the eligibility of the company in
liquidation to avail the same and the offer of Rs.5,05,81,963/- as against the
outstanding dues of Rs.18,34,54,245/- as of 31 March 2020, as the OTS Value, along
with a further offer 15% reduction on the said value if the amount was paid within one
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month from the date of sanction.
7.8 The Applicant claimed, to avail benefit of the aforesaid OTS, the
Applicant scouted for the suitable buyers. Respondent No.4 evinced interest in
purchasing plant and machinery at Silvassa for a consideration of Rs.80 Lakhs.
Thereupon, a MOU dated 12 November 2020 came to be executed between the
company in liquidation through the applicant and the Respondent No.4 and, under the
said Agreement, a sum of Rs.80 Lakhs came to be deposited with the Respondent
No.1 in a "no lien account".
7.9 Respondent Nos.2 and 3 also evinced interest to purchase the land and
building and the plant and machinery at Udumalpet. Accordingly, MOU came to be
executed on 20 November 2020 for sell of Udumalpet property to Respondent Nos.2
and 3 for a consideration of Rs.3.50 Crores. Initially, a sum of Rs.45 Lakhs and
thereafter, an amount of Rs.3,04,94,668/- came to be deposited with the Respondent
No.1 in a 'no lien account'. Respondent No.1 was, thus, holding a sum of
Rs.4,29,94,786/- deposited by Respondent Nos.2 to 4.
7.10 Since the company in liquidation and the assets of company can be sold
by the Official Liquidator, pursuant to the sanction of Court under Section 457(1)(c)
of the Act, 1956, the applicant has preferred this application seeking permission for
sale of the property and further direction to the Official Liquidator to complete sale
and execute requisite instruments in favour of Respondent Nos.2 to 4 asserting that
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the sales are in the interest of the company in liquidation and all other stake holders.
7.11 Upon being served with the aforesaid application, the Official Liquidator
filed Official Liquidator's Report No.36 of 2021 seeking a declaration that the above
referred MOUs dated 12 November 2020 and 20 November 2020 are null, void and
bad in law under Section 536(2) of the Act, 1956; a direction to SBI - secured creditor
to deposit all the amounts which it had received with the Official Liquidator and a
direction to the secured creditor as well as the executants of the MOU to make
disclosures.
7.12 The substance of the Report is that upon the admission of the winding
up Petition and the consequent winding up order, any disposition of the property of
the company in liquidation is void, unless otherwise ordered by the Court. In the case
at hand, the applicant professed to alienate the property of the company in liquidation,
though the property vests in the Official Liquidator, sans any authority in law.
7.13 When the IAL 2534 of 2021 and OLR 36 of 2021 were listed before this
Court, a statement was made on behalf of SBI that it was willing to refund the amount
of Rs.4,29,94,786/- to the prospective purchasers, and, thereupon, by an order dated
24 August 2022, SBI was directed to deposit the amount in this Court.
7.14 SBI - Respondent No.1 filed Application (L) No.13287 of 2022 seeking
directions to the Official Liquidator to execute necessary instruments to sell the assets
of the company in liquidation in favour of the prospective purchasers.
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7.14 SBI also filed an Affidavit in Reply in IAL 2534 of 2021. In the said
Reply, it was contended, inter alia, that the applicant had concealed the fact that the
company was ordered to be wound up by this Court by an order dated 23 August
2018. SBI - Respondent No.1 became aware of the said fact only upon receipt of the
communication from the Official Liquidator on 7 April 2021. It was further contended
that since the MOUs are not registered and requisite stamp duty has also not been
paid thereon, the MOUs executed on behalf of the company in liquidation in favour of
the prospective purchasers, are ex-facie invalid and unenforceable. At the same time,
SBI asserted that the court may exercise jurisdiction with a liberal approach and
permit the disposition in question.
8. In view of the aforesaid apparent inconsistency in its stand, SBI was
directed to make its stand clear. Eventually, an additional Affidavit came to be filed on
behalf of SBI - Respondent No.1. Now categorical assertions are made in the
additional Affidavit that the Respondent No.1 - SBI intends to enforce its statutory
right of election as a secured creditor and chooses to enforce its security interest
outside the purview of liquidation process / winding up proceedings and the applicant
be directed to collect the amount directly from this Court and refund the same to the
prospective purchasers.
9. The Applicant and the prospective purchasers have filed Affidavits in
Reply to the aforesaid additional Affidavit of SBI contending that SBI - Respondent
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No.1 having accepted the amount under OTS, being fully aware of the winding up
order, and also having not withdrawn the OTS, cannot be permitted to resile from its
earlier stand, especially in the face of the application preferred by the SBI -
Respondent No.1 seeking validation of those transactions.
10. In the backdrop of the aforesaid facts and pleadings, I have heard Mr.
Naphade, learned Counsel for the Applicant in IAL 2534 of 2021, Mr. Shanay Shah,
learned Counsel for the Official Liquidator, Mr. Kurdukar, learned Counsel for the SBI
and Mr. Samantray, learned Counsel for Respondent Nos.2 and 3 - prospective
purchasers. The learned Counsel have taken the Court through the relevant
pleadings and the documents on record.
11. Mr. Naphade, learned Counsel for the Applicant in IAL 2534 of 2021
would submit that the court ought to consider the substance of the matter. The
proposed sale of the assets of the company in liquidation to avail the benefit under
OTS scheme with the express consent of the secured creditor is exceedingly beneficial
to the company in liquidation. As against the then outstanding liability of
Rs.18,34,54,245/-, the secured creditor had agreed to accept a sum of
Rs.4,29,94,786/-. It was never the intention of the applicant to sell the property
behind back of the Official Liquidator. In fact, in the MOU dated 20 November 2020
in respect of Udumalpet property, there is a clear recital that the applicant would
apply to the Company Court seeking permission to execute the sale through the
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Official Liquidator.
12. Mr. Naphade would further urge that the consideration for which the
properties of the company are proposed to be sold cannot be said to be inadequate as
the valuation reports obtained by the secured creditor - SBI, indicated that the
realizable value of the property at Udumalpet was Rs.2.83 Crores and that of the plant
and machinery at Silvassa was Rs.1,26,90,000/-. The SBI, the only secured creditor,
had been unsuccessful in selling the property of the company in liquidation.
13. In this backdrop, according to Mr. Naphade, the proposed sale can only
be said to be both bona fide and for optimum consideration, and, moreover, in
discharge of the huge outstanding liability of the company in liquidation to the bank at
OTS value. Criticizing the approach of the Respondent No.1 - SBI - secured
creditor, in taking a sommersault, Mr. Naphade would urge that the SBI, in pursuance
of its offer of OTS, not only went ahead with the transaction and accepted money
from the prospective purchasers, but also preferred an application in this Court
seeking approval to those transactions. Thus, SBI, by its conduct, is estopped from
now asserting that it opts to enforce the security.
14. Mr. Siddharth Samantaray, learned Counsel for the prospective
purchasers, would submit that the claim of the SBI that it was not aware that the
company was in liquidation is belied by the documents on record. Inviting the
attention of the Court to the minutes of the meeting held by the Official Liquidator on
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31 October 2018, post winding up order wherein the Manager of the SBI had
participated and made a statement that they had taken symbolic possession of the
assets of the property situated at Udumalpet and plant and machinery at Silvassa, Mr.
Samantaray would urge that the secured creditor being fully aware of the borrower
being under liquidation had offered OTS scheme to the borrower, given express
consent for the sale of the secured assets and accepted consideration under OTS. Mr.
Samantaray would further urge that the SBI has not yet recalled the OTS. Therefore,
SBI cannot be permitted to now resile from the said OTS.
15. Mr. Kurdukar, learned Counsel for the SBI, would urge that there can be
no embargo on the statutory right of SBI, secured creditor, to opt out of the winding
up proceedings and enforce its security. The ex-director of the company in
liquidation had not furnished appropriate information about the company being under
the liquidation. The fact that the minutes of the meeting record that the Manager of
the SBI had attended the said meeting and taken a stand that the SBI had taken
symbolic possession of the assets of the company in liquidation, was sought to be
explained by submitting that there was lack of communication.
16. Mr. Shah, learned Counsel for the Official Liquidator, would urge that
the representations made by the ex-director of the company in liquidation and on
behalf of the secured creditor are of no significance. Since the MOU's have been
executed, post winding up order, there can be no validation of incomplete
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transactions. Mr. Shah would urge that the legal position is well neigh settled that
post winding up order, no new rights can be created and no incomplete rights can be
perfected. Strong reliance was placed on a Division Bench judgment of this Court in
the case of Sunita Vasudeo Warke V/s. Official Liquidator and Ors.1 to bolster up
the aforesaid submission.
17. In order to appreciate the controversy in a correct perspective, few facts
deserve to be noted. Winding Up Petition being Company Petition No.321 of 2016
was presented on 6 October 2015. An admission order was passed on 5 February
2018. Eventually, this Court allowed the Company Petition and ordered the company
to be wound up on 23 August 2018. It seems, the secured creditor forwarded a letter
dated 17 October 2020 to the company in liquidation and its ex-directors apprising
them about the eligibility of the company in liquidation for OTS ( SBI OTS 2020). In
the said communication, book outstanding was shown at Rs.18,54,18,245/-. OTS
amount was shown Rs.5,05,81,963/- with an additional incentive on the OTS amount
of 15% on full payment within one month from the date of sanction.
18. It seems, the company in liquidation through its ex-director Mr. Mukesh
Mehra - Applicant in IAL 2534 of 2021, professed to enter into a MOU on 20
November 2020 with A. Lakshmanan, Respondent No.2 to sell Udumalpet property
for a consideration of Rs.3.50 Crores. Likewise, the company in liquidation entered
1 2013(2) Mh.L.J. 777
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into a MOU with Mr. Bhavarlal Jain to sell plant and machinery at Silvassa on 12
November 2020 for a consideration of Rs.80 Lakhs. As noted above, the amounts
came to be credited with the SBI and were deposited in 'no lien account'.
19. Under Section 456(1) of the Companies Act, 1956, where a winding up
order has been made or where a provisional liquidator has been appointed, the
liquidator or the provisional liquidator, as the case may be, shall take into his custody
or under his control, all the property, effects and actionable claims to which the
company is or appears to be entitled. Under sub-section (2) of Section 456, all the
property and effects of the company shall be deemed to be in the custody of the
Tribunal as from the date of the order for the winding up of the company. Section
457 incorporates the power of the liquidator. Clause (c) of sub-section (1) of Section
457 empowers the liquidator in winding up to sell the immovable and movable
property and actionable claims of the company by public auction or private contract
with the sanction of the Tribunal.
20. The provisions of Section 536 also deserve to be noted at this stage.
Under Section 536(2), in the case of winding up by the Tribunal, any disposition of the
property (including actionable claims of the company) and any transfer of shares in the
company or alteration in the status of its members, made after the commencement of
the winding up, shall unless the Tribunal otherwise orders, be void. Section 441 of the
Act, prescribes the date of commencement of winding up. Under sub-section (2) of
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Section 441, the winding up of a company by the Tribunal shall be deemed to
commence at the time of the presentation of the Petition for the winding up.
21. In the backdrop of the aforesaid provisions, the controversy at hand
needs to be determined. Evidently, an endeavour has been made by the company in
liquidation through its ex-director to enter into agreements to sell the assets of the
company in liquidation after the winding up order is passed. Clearly neither the
company in liquidation nor ex-director has any authority to enter into such a contract
for sale after the winding up order is passed. In any event, in view of the provisions
contained in Section 536(2), any disposition of the property of the company made
after the commencement of the winding up is void unless otherwise ordered by the
Tribunal/Court.
22. Whether a case for grant of validity, or for that matter, permission under
Section 457(1)(c) is made out, is the moot question.
23. Indisputably, the proposed transactions represented by the two MOU's
dated 12 November 2020 and 20 November 2020 are inchoate, although the
prospective purchasers have parted with the consideration. Mr. Shah, learned Counsel
for the Official Liquidator was justified in canvassing a submission that after the
winding up order the incomplete transactions cannot be perfected. Reliance placed
on the judgment of the Division Bench of this Court in the case of Sunita Vasudeo
Warke (supra), appears to be impeccable. The observations of the Division Bench of
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this Court in paras 11 and 12 are instructive, and, hence, extracted below :
"11. In order that section 536(2) of the Companies Act, 1956 can be
invoked by the Court to "otherwise order", there has to be a disposition of
property of the company; a disposition which has been made after the
commencement of winding up proceedings. In the judgment of the House
of Lords in the Governor and Company of the Bank of Scotland v/s.
Macleod and Others2 Lord Kinnear observed that the rights of competing
creditors in liquidation are to be governed by the same rules as regulate the
rights of creditors in a sequestrated estate under the Bankruptcy Acts. The
House of Lords held that "rights in security which have been effectually
completed before the liquidation must still receive the effect which the law
gives to them. But the company and its liquidators are just as completely
disabled by the winding up from granting new or completing imperfect
rights in security as the individual bankrupt is by his bankruptcy." (pages
317 and 318 of the Judgment in (1914) AC 311). The Law Lord noted that
this indeed was the necessary effect of the Companies Act under which the
estate has to be distributed amongst the creditors pari passu and every
creditor has an equal share unless anyone has already a part of the estate in
his hands, by virtue of an effectual legal right.
12. This principle was followed in the judgment of the Supreme
Court in J. K. (Bombay) Pvt. Ltd. V/s. New Kaiser-I-Hind Spinning and
Weaving Co. Ltd. and Ors.3 The Supreme Court after adverting to the
judgment in the Bank of Scotland (supra) held as follows :
39. It is thus well established that once a winding up order is passed the
undertaking and the assets of the company pass under the control of the liquidator
whose statutory duty is to realize them and to pay from out of the sale proceeds its
creditors. Such creditors acquire on such order being passed the right to have the
assets realized and distrbuted among them pari passu. No new rights can
thereafter be created and no uncompleted rights can be completed, for doing so
2 (1914) AC 311
3 AIR 1970 SC 1041.
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would be contrary to the creditors' right to have the proceeds of the assets
distributed among them pari passu........
In view of the judgment of the Supreme Court it is now a settled
principle of law that if a transfer is not completed before an order of
winding up has been passed, an application would not be maintainable
before the Court for a direction to the Official Liquidator to complete the
transfer. This principle necessarily follows the settled legal position that
upon the passing of an order of winding up, no new rights can be created
and no uncompleted rights can be completed. ( emphasis supplied)
24. The Division Bench has enunciated in clear and explicit terms that if a
transfer has not been completed before the winding up order has been passed, an
application would not be maintainable before the Company Court for a direction to the
Official Liquidator to complete the transfer, for upon the passing of an order of
winding up, no new rights can be created and no uncompleted rights can be
completed.
25. In the case at hand, the applicant in IAL 2534 of 2021 seeks the very
prayers of directing the Official Liquidator to complete the sale and execute necessary
instruments in favour of the Respondent Nos.2 to 4 - prospective purchasers, which
are clearly in teeth of aforesaid proposition.
26. Mr. Naphade and Mr. Samantaray made an earnest endeavour to
persuade the Court to validate the transactions entered into by the ex-director and give
imprimatur to the sale of the assets of the company on the premise that the sales are
overwhelmingly in the interest of the company in liquidation. The ex-director and the
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prospective purchasers are required to surmount two impediments. First, the
impermissibility of such a course after the wining up order. Two, the contention of the
secured creditor that it opts to enforce the security interest.
27. On the first count, even if the Court proceeds on the premise that there
was a completed transfer of the property, the question of exercise of the discretion to
validate the transaction would arise. The thrust of the submission on behalf of the ex-
director and the prospective purchasers was that the sale is for an optimum price. It
would be suffice to note that this Court considered it appropriate to have the valuation
of the assets of the company in liquidation from an empanelled valuer. The market
value, realizable and distress sale value of the property at Udumalpet is far in excess of
consideration at which the said assets are proposed to be sold to Respondent No.2 and
3 under the MOU. Likewise, the market value, realizable value and distress sale value
of the plant and machinery at Silvassa far exceeds the consideration for which the said
property is agreed to be sold to Respondent No.4. This factor dissuades the Court
from readily acceding the submissions on behalf of the ex-director and the prospective
purchasers that the proposed sale is for an optimum value.
28. Secondly, had it been a case that the secured creditor been agreeable to
the proposed sale in full and final settlement of all its outstanding dues, different
considerations would have come into play. The stand of the secured creditor, though
a little ambivalent, that it now seeks to enforce security interest leads to a situation
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where the assets of the company in liquidation would be sold, if the Court were to give
its imprimatur to the transaction in question, and the company in liquidation still
saddled with the undischarged debt. The Court, therefore, would not be justified in
exercising the discretion which in the present scenario is fraught with the risk of the
assets of the company in liquidation being disposed for an inadequate consideration
and the company in liquidation still carrying the burden of debt of the secured
creditor.
29. I do not find much substance in the submission on behalf of the ex-
director and the prospective purchasers that the secured creditor cannot be now
permitted to resile from the unerstanding. The Court need not delve into disputed
question of fact as regards the knowledge to the secured creditor about the borrower
being under liquidation. The legal position is absolutely clear.
30. In view of the provisions contained in Sections 529 and 529A of the Act,
1956, the secured creditor has two options. First, the secured creditor may relinquish
the security and participate in the liquidation proceedings. Second, the secured
creditor may enforce the security by standing outside the winding up proceedings. If
the secured creditor opts to stand outside the winding up proceedings, he would come
within the purview of Section 529A(1)(b) read with the provisio (c) appended to
Section 529(1) of the Act, 1956.
31. A useful reference in this context can be made to a three Judge Bench
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decision of the Supreme Court in the case of Jitendra Nath Singh V/s. Official
Liquidator and Ors.4 wherein the Supreme Court expounded the import of the
provisions contained in Sections 529 and 529A of the Act and culled out the principles
as under :
"16.1 A secured creditor has only a charge over a particular property
or asset of the company. The secured creditor has the option to either
realize his security or relinquish his security. If the secured creditor
relinquishes his security, like any other unsecured creditor, he is entitled to
prove the debt due to him and receive dividends out of the assets of the
company in the winding up proceedings. If the secured creditor opts to
realize his security, he is entitled to realize his security in a proceeding
other than the winding up proceeding but has to pay to the liquidator the
costs of preservation of the security till he realizes the security.
16.2 Over the security of every secured creditor, a statutory charge
has been created in the first limb of the proviso to clause (c) of sub- section
(1) of Section 529 of the Companies Act in favour of the workmen in
respect of their dues from the company and this charge is pari passu with
that of the secured creditor and is to the extent of the workmen's portion in
relation to the security of any secured creditor of the company as stated in
clause (c) of sub- section (3) of Section 529 of the Companies Act.
16.3 Where a secured creditor opts to realize the security then so
much of the debt due to such secured creditor as could not be realized by
him by virtue of the statutory charge created in favour of the workmen shall
to the extent indicated in clause (c) of the proviso to sub-section (1) of
Section 529 of the Companies Act rank pari passu with the workmen's dues
for the purposes of Section 529 of the Companies Act.
16.4 The workmen's dues and where the secured creditor opts to
realize his security, the debt to the secured creditor to the extent it ranks
4 (2013) 1 SCC 462
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pari passu with the workmen's dues under clause (c) of the proviso to sub-
section (1) of Section 529 of the Companies Act shall be paid in priority
over all other dues of the company." (emphasis supplied)
32. In view of the aforesaid exposition of law, the endeavour on the part of
the ex-director and the prospective purchasers to put an embargo on the statutory
right of the secured creditor by pressing into service the conduct of the secured
creditor, does not merit countenance. Since the principal prayer of the applicant in
IAL 2534 of 2021 is of directions to the Official Liquidator to complete the
transactions of sale which are inchoate, the fact that SBI had initially concurred in the
said prayer (which is not in consonance with law) does not advance the cause of the ex-
director and the prospective purchasers.
33. The conspectus of aforesaid discussion is that the application preferred
by the ex-director being IAL 2534 of 2021 and State Bank of India being IAL No.13287
of 2022 deserve to be rejected. Official Liquidator's Report No.36 of 2021 deserves
to be allowed.
34. Hence, the following order :
ORDER
(i) Interim Application (L) Nos.2534 of 2021 and 13287 of 2022
stand rejected.
(ii) Official Liquidator's Report No.36 of 2021 stands allowed to the
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extent that the MOU's dated 12 November 2020 and 20 November 2020 do not bind
the company in liquidation and the Official Liquidator and they stand cancelled qua
the company in liquidation and the Official Liquidator.
(iii) The amount of Rs.4,29,94,781/- deposited by the SBI, along with
interest accrued thereon, be returned to SBI - the secured creditor.
(iv) The SBI - secured creditor shall, in turn, return the amount
which it had received from the respective Respondents - prospective purchasers along
with proportionate interest which has accrued on the said amount and paid to SBI,
within a period of two weeks from the receipt of the said amount from the Registry.
(v) Official Liquidator's Report No.36 of 2021 stands disposed.
(vi) Official Liquidator's Report No.9 of 2023 be listed before
appropriate Bench.
( N.J.JAMADAR, J. )
SSP 20/20
Signed by: S.S.Phadke
Designation: PS To Honourable Judge
Date: 27/09/2023 19:45:16
