Tribunal grants 14-day asset sale hold, scrutiny on collusive practices. The tribunal granted a temporary restrain order for 14 days, maintaining status quo on the asset sale by the respondent company, now a Non-Performing ...
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Tribunal grants 14-day asset sale hold, scrutiny on collusive practices.
The tribunal granted a temporary restrain order for 14 days, maintaining status quo on the asset sale by the respondent company, now a Non-Performing Asset (NPA). J.M. Financial Services, the Secured Creditor, could proceed with the sale after this period, subject to potential review if collusive practices with the respondent's directors were found. The tribunal scheduled a further hearing to address allegations of oppression and mismanagement, emphasizing scrutiny on any collusive sales.
Issues: 1. Application for restrain order against alienating/transferring assets of respondent's company. 2. Dispute over the sale of properties by a Secured Creditor. 3. Urgency due to respondent company becoming an NPA. 4. Allegations of collusion in asset sale.
Analysis: 1. The petitioner filed a miscellaneous application seeking a restrain order against J.M. Financial Services and others from alienating or transferring the assets of the respondent's company.
2. J.M. Financial Services, as a Secured Creditor, had advanced a loan to the respondent company. The petitioner raised concerns about the properties being sold at a lower value than market price. The respondent agreed to wait for two weeks for the petitioner to find a buyer offering a better price. After this period, the respondent would be free to sell the property.
3. Due to the urgency of the respondent company becoming a Non-Performing Asset (NPA), the tribunal directed both parties to maintain status quo for 14 days. The respondent was allowed to exercise rights as a secured creditor after the next hearing. However, any sale by J.M. Financial Services found to be collusive with the respondent company's directors, facing allegations of oppression and mismanagement, would be subject to review and potential set aside.
4. The tribunal scheduled the matter for further hearing on 17.12.2019, emphasizing that any sale deemed collusive with the respondent company's directors would be carefully examined and could be invalidated. The order aimed to balance the rights of the parties involved while addressing the urgency and concerns raised regarding the asset sale process.
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