Karnataka High Court
Karnataka State Financial Corporation vs The Oficial Liquidator on 20 November, 2025
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OSA No. 2 of 2024
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF NOVEMBER, 2025
PRESENT
THE HON'BLE MR. JUSTICE JAYANT BANERJI
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
ORIGINAL SIDE APPEAL NO. 2 OF 2024
BETWEEN:
KARNATAKA STATE FINANCIAL CORPORATION,
CENTRAL BRANCH, HO.NO.1/1,
THIMMAAH ROAD, BANGALORE-560 052,
REPT. BY ITS ASST. GENERAL MANAGER.
...APPELLANT
(BY SRI.ABHISHEK MALIPATIL, ADVOCATE FOR
SRI.P.S.MALIPATIL, APPELLANT)
AND:
THE OFFICIAL LIQUIDATOR,
Digitally signed
by K G M/S. VIORYL (INDIA) LTD. (IN LIQUIDATION),
RENUKAMBA ATTACHED TO HIGH COURT OF KARNATAKA,
Location: HIGH CORPORATE BHAVAN, NO.26-27,
COURT OF 12TH FLOOR, RAHEJA TOWERS,
KARNATAKA
M.G.ROAD, BANGALORE-560 001.
...RESPONDENT
(BY SMT.KRUTIKA RAGHAVAN, ADVOCATE)
THIS ORIGINAL SIDE APPEAL IS FILED UNDER SECTION
483 OF COMPANIES ACT, 1956, PRAYING TO THIS HON'BLE
COURT TO CALL FOR RECORDS IN COP NO.107/1989 AND SET
ASIDE THE ORDER DATED 01.03.2023 IN CA NO.1/2022 IN
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COP NO.107/1989 AND DIRECT THE OL TO TREAT THE
APPELLANT AS SECURED CREDITOR AND ALLOW CA
NO.1/2022, IN THE INTEREST OF JUSTICE AND EQUITY AND
ETC.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE JAYANT BANERJI
and
HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE JAYANT BANERJI)
Heard the learned counsel for the parties.
2. This appeal under Section 483 of the Companies
Act, 1956 has been preferred with a prayer to set aside an
order of 01.03.2023 passed on C.A.No.1/2022 in C.O.P.
No.107/1989 with a direction to the Official Liquidator to treat
the appellant as secured creditor and allow the C.A.No.1/2022.
3. Evident it is from the order impugned that the
Company application had been filed seeking a direction to
respondent - Official Liquidator to accept Form No.69 filed by
the applicant and also to treat the applicant as secured creditor
in view of the registration of its claim under Section 124 and
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125 of the Companies Act, 1956 before the Registrar of
Companies and direct the Official Liquidator to pay the
expenses and proceeds of the sale to the Corporation as
secured creditor. The Court found that the statutory mandate
under Section 125 of the Companies Act, 1956, was not
complied with inasmuch as charge created by the appellant
company was not registered in terms of Section 125. Therefore
the claim of payment of expenses and proceeds of sale could
not be considered.
4. The contention of the learned counsel for the
appellant is that sale was conducted by the appellant of the
secured property on the directions of Official Liquidator. It is
stated that the expenses incurred in the sale are liable to be
paid and moreover, the Official Liquidator having acknowledged
the appellant as secured creditor proceeds of sale are also
liable to be paid.
5. Learned counsel for the Official Liquidator has
referred to From No.69 issued by the Assistant Official
Liquidator to the Managing Director of the appellant -
Corporation (page No.62 of the paper book) by means of
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which, the claim of the appellant as a secured creditor was
rejected on the ground that no proof had been submitted by
the appellant with Form No.8 regarding the charge, if any,
made by the company in liquidation to show that such charge is
registered with the Registrar of Companies as per Section 125
of the Companies Act, 1956. In that letter it is mentioned that
the claim of the appellant is admitted as an unsecured creditor.
6. Another document has been placed which is at page
No. 34 of the paper book written by the Official Liquidator in
response to the letter of the appellant dated 16.12.1993 in
which security charges have been claimed from the appellant.
7. Once admittedly no documentary evidence has
been produced by the appellant demonstrating registration of
charge under Section 125 of the Act, 1956 with the Registrar of
Companies pertaining to company in liquidation, no such
security charges as intimated by the Official Liquidator in
response to the letter of the appellant dated 16.12.1993 would
be payable.
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HC-KAR
8. Be that as it may, the application moved by the
appellant under Rule 151 of the Companies (Courts) Rules,
1959 in Form No.66 did not contain any proof of the
registration with the Registrar of Companies under Section 125.
Therefore, the Form No.66 was rejected.
9. In this view of the matter, there is no error in the
order passed by the learned Single Judge which is impugned in
the instant petition.
This appeal is therefore dismissed subject to the
observations made above.
Sd/-
(JAYANT BANERJI)
JUDGE
Sd/-
(K. V. ARAVIND)
JUDGE
BVK
