TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether disposal of the Saakar Bungalow Property amounted to disposal of an "undertaking" within the meaning of Section 180(1)(a) of the Companies Act, 2013 requiring a special resolution; (ii) Whether the sale could be set aside on grounds of lack of good faith of the purchaser or undervaluation.
Issue (i): Whether the subject property qualified as an "undertaking" under the Explanation to Section 180(1)(a) of the Companies Act, 2013 thereby triggering the requirement of a special resolution for its sale.
Analysis: The statutory text and precedent distinguish an "undertaking" as a business or unit forming an integrated profit-making activity from isolated assets which are tools of business. The quantitative 20% threshold in the Explanation operates only after the subject matter is first found to be an "undertaking." The legislative use of disjunctive language in Section 2(16) further indicates that "assets" and "undertakings" are not synonymous. The facts show the bungalow was a mortgaged, passive, non-revenue-generating asset acquired in 2017 and not an integral operational unit or going concern.
Conclusion: The sale was disposal of an individual asset and not of an "undertaking" within Section 180(1)(a); the special resolution requirement under Section 180(1)(a) did not apply.
Issue (ii): Whether the sale should be set aside because the purchaser was not bona fide or the property was undervalued.
Analysis: The sale occurred in the context of bank enforcement under the SARFAESI regime to recover outstanding dues. The applicants did not plead mala fide conduct by the purchaser; allegations targeted company management. The sale deed disclosed pendency and vacation of interim orders, the purchaser paid part consideration before execution, and valuation explanations (including exclusion of contingent potential FSI/TDR) were supported by findings. Appellate interference with discretionary interlocutory orders is limited and requires proof of perversity, arbitrariness, or disregard of settled principles.
Conclusion: There is no basis to set aside the sale for lack of bona fide or on the ground of undervaluation; purchaser's good faith and the valuation process are upheld.
Final Conclusion: The appeals are without merit and are dismissed; the impugned orders upholding the sale and refusing relief are sustained.
Ratio Decidendi: For Section 180(1)(a) purposes an "undertaking" denotes a business or going concern (an organized profit-generating unit), not an isolated asset; the 20% quantitative threshold in the Explanation applies only after a qualitative determination that the subject is an "undertaking."
TaxTMI 
TaxTMI 
