AI Drafter 
TaxTMI 
TaxTMI 
2018 (9) TMI 597
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....teco Ltd. In order to secure such facilities provided by the applicant bank, the company now (in liquidation) had created charge and hypothecation and/or equitable mortgage in respect of its movables and immovable properties. The diverse credit facilities were extended from time to time against enhanced securities and it was lastly to the tune of Rs. 77.39 crores. Initially the applicant bank and UCO Bank formed a consortium. Subsequently from August, 2009 there were further induction into the consortium and apart from the applicant bank and UCO Bank, IDBI Bank, Corporation Bank, Andhra Bank and Bank of India became members of the same with the applicant bank being the lead bank. The newly formed consortium granted total credit facilities to the tune of Rs. 283.25 crores out of which the total share of the applicant bank was Rs. 77.39 crores as per the sanction letter dated 10th August, 2009. The non-funded working capital limit was further extended to Rs. 112.89 crores under a sanctioned letter dated 21st February, 2013. It is, however, not clear from the application as to the exact extent of charge and/or hypothecation and/or mortgage created by of the company now (in liquidation....
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....L & T Finance Ltd. as an unsecured creditor filed an application under the provisions of Sections 433, 434,439 of the Companies Act, 1956 (hereinafter referred to as the 1956 Act) before this Court being C.P. No.91 of 2016. By an order dated 5th May, 2016 the said winding up petition was admitted for a principal amount of Rs. 8,47,93,759.00. Subsequently by an order dated 11th July, 2017 the said company, namely, Chandra Proteco Limited was directed to be wound up and the official liquidator was directed to take possession of all assets of the said company (in liquidation). The official liquidator was, however, directed to stay his hands for a period of 2 weeks to enable the said company to settle with its creditors. There appears to be several other winding up petitions filed in and around that time. There also appears to be no settlement by filing any scheme. 7. It is the further case of the applicant that the applicant along with the other consortium members had taken symbolic possession of the immovable properties of the company (in liquidation) situate at Survey No.139/2, Athola Silvasa - 396230 Dadra & Nagar Haveli (hereinafter referred to as the "Silvasa Properties") on 1....
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....nder SARFAESI Act. The 2005 (8) SCC 190 judgment which is in respect of DRT's authority to sell the assets of a company (in liquidation) clearly stipulates that the sale can be ordered or made only after notice to the Official Liquidator and upon hearing him. It further says that the Official Liquidator should be associated with the sale as and when necessary. The said judgment also provides for the mode of distribution amongst the secured creditors. In the instant case as records reveal the Debts Recovery Tribunal is in seisin of the matter by virtue of the two applications being filed by the secured creditor banks under the provisions of RDB Act prior to the order of winding up been passed. Restraint order has been also passed against the said company prior to the same going into liquidation. 12. The applicant bank further contended that the RBD Act being subsequent to 1956 Act the later Act should be given preference. It is submitted by the applicant bank that taking cue from the ratio laid down in the said two judgments, the applicant bank be allowed to stay outside the winding up proceeding and sell the assets of the company (in liquidation) given as securities to it and ap....
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....s in better position to distribute the sale proceeds as the list of other secured creditors and the claim of the workers are before him and not before the applicant bank. 15. In the instant case the 13(2) and 13(4) notices under the provisions of the SARFAESI Act had been issued prior to the order of winding up and as such there was no occasion for the applicant bank to serve a notice to the official liquidator. There is also no scope for service of such notices on the official liquidator any further. The official liquidator in view of the winding up order is, however, required to scrutinize as to whether the borrower did receive the notices under Sections 13(2) and 13(4) of the SARFAESI Act. The official liquidator in a situation like this will have to first scrutinize whether the Silvasa Property and the moveables lying thereat are the secured asset of the applicant bank. If he is satisfied that those are secured assets, he should allow the applicant bank to sell the same but only after giving him a 30 days' notice prior to sell of the assets of the company (in liquidation) as required to be served on the official liquidator, under the said rules before the secured creditor pr....
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.... the event he chooses to remove such encumbrances by observing the legal formalities. The official liquidator may have to either file proceedings or defend in a competent court having jurisdiction over Silvasa Property from its office at Kolkata. 17. The applicant bank is therefore permitted to remain outside the winding up proceedings since it had initiated proceedings before the DRT prior to the company being wound up and is also allowed to sell the Silvasa property in association with the official liquidator as stated hereinabove. The same procedure as laid down above has to be followed in respect of selling the movables of which the applicant bank claims to be its securities. 18. The official liquidator, if satisfied that the assets of the company (in liquidation) are secured asset of the bank he should make over the symbolic possession thereof or the actual physical possession if he has taken the same in the meantime to the applicant bank to effect the sale. The applicant bank should conduct the sale observing all formalities upon prior notice to the official liquidator as aforesaid and after completing the sale shall indicate the sale to the official liquidator the sale....