Assets of C.V. Steel Limited to be Returned to RIICO After Winding-Up Order Reversal; Directors Held Liable for Expenses.

The HC directed the Official Liquidator to return the assets of M/s. C.V. Steel Limited to RIICO, following the recall of a winding-up order. RIICO's application under Rules 6 and 9 of the Companies (Court) Rules, 1959 was granted, acknowledging their rights under the Sick Industrial Companies (Special Provisions) Act, 1985. The court declined expense recovery from asset sales, holding the company's directors liable. Both parties agreed to inventory and notarize the assets during the handover, scheduled for a specific date, with the company's representatives present. The application was disposed of with these directives.

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Issues:
Application under Rules 6 and 9 of the Companies (Court) Rules, 1959 for direction to hand over possession of assets of a company back to the applicant RIICO.

Analysis:
The judgment pertains to an application by RIICO under Rules 6 and 9 of the Companies (Court) Rules, 1959 seeking direction to the Official Liquidator to return the possession of assets of M/s. C.V. Steel Limited. The background involves RIICO taking possession of mortgaged assets of the company due to default on repayment terms, followed by a winding-up order that was later recalled. The company was found not to be a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985. RIICO argued that since the company was not under winding up or had a provisional liquidator appointed, they should regain possession to realize outstanding amounts. The Official Liquidator had no objection but requested safeguarding of expenses incurred during possession. The company, although not a party to the application, emphasized the need for inventorying assets during handover.

The court considered RIICO's rights under the 1985 Act, the recall of the winding-up order, and the absence of a provisional official liquidator appointment. Consequently, the Official Liquidator was directed to return the assets to RIICO. The court declined to order expense recovery from asset sale, citing a previous directive holding the company's directors liable for such expenses. Both the Official Liquidator and RIICO agreed to the presence of the company's representatives during handover for inventorying and notarization. The possession transfer was scheduled for a specific date, with the company instructed to ensure the presence of its officials. The application was disposed of accordingly.

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