2004 (4) TMI 312

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....ellant. R.N. Keshwani and Sudarsh Menon for the Respondent. JUDGMENT 1. The appellant had advanced loans to the respondent-company between 23-2-1976, till 10-7-1986. On 10-7-1986, an application for winding up was filed against the respondent by an unsecured creditor. Subsequent to this on 1-10-1986 and 19-1-1988, the appellant sanctioned two further loans to the company. In 1990 the company....

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....rpose of obtaining funds for the company or otherwise in the interest of the company which was being wound up. It was also held that permitting the company to dispose of all its assets to a particular creditor would affect the claims of all creditors of the company and that before any such order is passed publicity should be given to the application so that all creditors could file their objection....

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.... no appeal had been preferred therefrom. 3. It is not in dispute that during the pendency of the proceedings the company was referred to the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act. The efforts to revive the company were unsuccessful both before the BIFR as well as the AAIFR. The company was accordingly ultimately wound up. ....

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....ng from the appellant as to how these advances were made for over a period of ten years without obtaining any security. The appellant ultimately sought to create securities in respect of these transactions only in 1990. The Division Bench was also correct that the grant of leave under section 536(2) would not be appropriate after this delay. Leave under section 536(2) may be granted for the benefi....