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of <h1>Indian Bank's Sale Declared Void under Companies Act & SARFAESI Act</h1> <h3>United Steel Allied Industries Private Limited Versus Indian Bank and Ors.</h3> The sale conducted by the Indian Bank was declared void under Sections 531, 531(A), and 537 of the Companies Act and Rule 9 of the SARFAESI Act. The ... - Issues Involved:1. Validity of the sale conducted by the Indian Bank u/s SARFAESI Act.2. Whether the sale is void and fraudulent as contended by the Official Receiver.3. Whether the sale is vitiated by irregularities as raised by the auction purchaser and liable to be set aside.Summary:Issue 1: Validity of the Sale Conducted by the Indian Bank u/s SARFAESI ActThe Indian Bank contended that the sale was conducted under the statutory provisions of the SARFAESI Act, a special enactment, and any grievances should be addressed to the Debt Recovery Tribunal (DRT) u/s 17 of the Act. The Bank cited several Supreme Court decisions supporting this view, including *Mardia Chemicals Limited vs. Union Of India* and *Official Liquidator, U.P. and Uttarakhand vs. Allahabad Bank*. The Bank argued that the Company Court lacks jurisdiction and that the sale certificate itself completes the sale, negating the need for registration.Issue 2: Whether the Sale is Void and Fraudulent as Contended by the Official ReceiverThe Official Liquidator argued that the sale is void u/s 446, 531, and 531(A) of the Companies Act, 1956, as it was conducted within one year from the date of the winding-up petition, making it fraudulent and an undue preference to one creditor. The Liquidator cited several case laws, including *Asset Reconstruction Company (India) Limited vs. Official Liquidator* and *Administrator, MCC Finance Limited vs. Ramesh Gandhi*, to support that the Company Court has exclusive jurisdiction over such matters. The Court agreed, stating that the sale is statutorily invalid and void, and the Official Liquidator has the right to oppose the registration of the sale certificate.Issue 3: Whether the Sale is Vitiated by Irregularities as Raised by the Auction Purchaser and Liable to be Set AsideThe auction purchaser raised several irregularities, including non-disclosure of encumbrances and improper valuation. The Court found that the sale violated mandatory provisions of Rule 9 of the SARFAESI Act and the Tender-cum-Bid agreement. The auction was held on 29.09.2010, but the balance amount was not deposited within the stipulated 15 days, and no valid extension was sought. The Court held that the sale was conducted fraudulently and in violation of statutory provisions, making it void. Consequently, the auction purchaser is entitled to relief, and the Creditor Bank cannot enforce the liability.Conclusion:The sale conducted by the Indian Bank was declared void under Sections 531, 531(A), and 537 of the Companies Act and Rule 9 of the SARFAESI Act. The Official Liquidator's objections were upheld, and the auction purchaser was granted relief. The Creditor Bank's actions were found to be invalid, and any amounts realized from the sale cannot be retained. The Court allowed W.P. No. 19297 of 2012, dismissed W.P. No. 33655 of 2011 and Company Application No. 1972 of 2011, and allowed Company Application No. 421 of 2013.
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