Court affirms property ownership in favor of Thungbhadra Sugar Works Limited, directs compliance with sale orders

The court upheld previous directions for compliance with court orders by the Recovery Officer, DRT, Bangalore. It directed the association of a party with the Official Liquidator for the sale of properties. The Official Liquidator was permitted to value and sell assets, recouping expenses from the sale proceeds. Possession of properties was granted to Thungbhadra Sugar Works Limited, settling debts and dues. The court affirmed ownership of properties in favor of Thungbhadra Sugar Works Limited, directing the Official Liquidator to hand over possession and pay arrears of rent. Company Application Nos. 298 to 300 of 2021 were allowed, while Company Application No. 626 of 2017 was dismissed.

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Issues Involved:
1. Compliance with previous court directions.
2. Association with Official Liquidator for sale of properties.
3. Valuation and sale of assets.
4. Payment of arrears of rent and possession of property.
5. Settlement of debts and dues.
6. Ownership and transfer of properties.

Summary:

Issue 1: Compliance with Previous Court Directions
The Official Liquidator sought directions for the Recovery Officer, DRT, Bangalore, to comply with the High Court's directions dated 17.09.2009. The court upheld the previous directions and noted that the Official Liquidator had taken possession of the assets on 28.09.1999.

Issue 2: Association with Official Liquidator for Sale of Properties
The court directed R-3 to associate with the Official Liquidator to bring the properties for sale and then take his portion of outstanding dues from the sale proceeds as per law.

Issue 3: Valuation and Sale of Assets
The Official Liquidator was permitted to engage ITCOT for valuing the assets and to conduct the sale through public auction with wide publicity in newspapers. The Official Liquidator was also permitted to meet the expenses from the common pool fund and recoup the amount from the sale of assets on a priority basis.

Issue 4: Payment of Arrears of Rent and Possession of Property
Thungbhadra Sugar Works Limited sought directions for the Official Liquidator to pay arrears of rent after deducting security expenses and to hand over possession of the land, building, plant, and machinery. The court acknowledged that the applicant had settled the dues and the properties belonged to them.

Issue 5: Settlement of Debts and Dues
The court noted that the debts of Deve Sugars Limited were assigned to Pegasus Assets Reconstruction Private Limited and settled by the applicant for Rs.42.55 crores. The applicant obtained a no dues certificate and the title deeds were returned. The court recognized the settlements with the workmen and creditors.

Issue 6: Ownership and Transfer of Properties
The court emphasized that the properties in question belonged to Thungbhadra Sugar Works Limited and not Deve Sugars Limited. The agreement for transfer dated 15.01.1994 was canceled on 30.09.1998, making the transfer of properties non-existent in the eye of law. The Supreme Court had allowed the impleadment of the applicant, confirming their ownership and readiness to settle dues.

Order:
1. The applicant, Thungbhadra Sugar Works Limited, has settled the debts of Deve Sugars Limited and received the title deeds.
2. The applicant is entitled to the possession of the land, plant, and machinery.
3. The Official Liquidator is directed to hand over possession of the properties to the applicant and is restrained from interfering with the applicant's enjoyment of the properties.
4. The Official Liquidator is directed to pay the arrears of rent after deducting security expenses to the applicant within four weeks.

Company Application Nos. 298 to 300 of 2021 were allowed, and Company Application No. 626 of 2017 was dismissed.

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