SARFAESI sale can replace winding up where the company consents and undertakes to cooperate with secured asset enforcement.

Where a company and secured creditors consent to recovery through sale of secured assets under the SARFAESI framework, and the company undertakes to cooperate and hand over possession after sale confirmation, the HC may decline winding up and permit enforcement through the secured asset regime instead. On those facts, the winding up petition was not granted, and the secured assets were directed to be sold under law expeditiously with possession to be handed over in terms of the undertaking.

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Issues: Whether the company petition for winding up should be ordered, or whether the secured assets should be sold under the SARFAESI regime in view of the parties' consensus and the company's undertaking.

Analysis: The petitioning creditor sought winding up on the ground of default in repayment of the consortium loan. During the proceedings, the secured debts were assigned to the asset reconstruction company, the respondent company accepted liability, and it expressed willingness to have the secured assets sold under the SARFAESI mechanism and to hand over possession after confirmation of sale. In these circumstances, all parties consented to recovery through sale of the secured assets by the asset reconstruction company, and the Court directed that the sale be proceeded with under law and completed expeditiously.

Conclusion: The winding up petition was not granted and the matter was closed with a direction for sale of the secured assets under the SARFAESI Act and handover of possession in terms of the undertaking.

Ratio Decidendi: Where the company and the secured creditors consent to recovery through sale of secured assets under the SARFAESI framework and the company undertakes to cooperate, the Court may close the winding up proceedings and permit enforcement through the secured asset regime instead of ordering winding up.

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