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TaxTMI 
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2020 (8) TMI 340
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....quidator (OL) to hand over possession of secured assets of the company in liquidation i.e. Nirmal Steel and Tubes (I) Ltd. to respondent no.2 RIICO Ltd., in terms of Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002 and to permit respondent no.2 RIICO Ltd. to sell the secured assets by public auction under the provisions of SARFAESI Act and to distribute the sale proceeds in accordance with provisions of Section 529 and 529A of the Companies Act. The challenge to the order is made by the erstwhile Director of the company in liquidation i.e. Nirmal Steel Tubes (I) Ltd. namely Mr. R.K. Aggarwal. 4. The counsel for the respondent no.1 OL, on seeing the matter in the cause list and stating that no advance copy has been delivered and Mr. Pushpender Aggarwal, Manager (Law) of respondent no.2 RIICO Ltd. on advance notice, appear. Though none appears for respondent no.3 State Bank of India (SBI) and respondent no.4 Rajasthan Financial Corporation Ltd. (RFCL), but being prima facie of the opinion that the appeal is not maintainable and that the presence of the respondent no.3 SBI and respondent no.4 RFCL i....
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.... On 26th August, 2015 RFCL gave consent to RIICO Ltd. in terms of Section 13(9) of the SARFAESI Act for taking action under Section 13(4); (xii) the appellant, being the ex-management of the company in liquidation Nirmal Steel and Tubes (I) Ltd. and also holding 75% of the share capital of the company in liquidation Nirmal Steel and Tubes (I) Ltd., filed Company Application No.835/2017 in Company Petition No.112/1994 contending that the proceedings initiated under the SARFAESI Act were time barred; the same objection was also taken in the reply filed to Company Application No.3550/2016 supra; and, (xiii) in the meanwhile the appellant, being the ex-management of the company in liquidation Nirmal Steel and Tubes (I) Ltd., entered into an One Time Settlement (OTS) with respondent no.3 SBI and filed CA No.387/2018 in the Company Court informing the said OTS arrived at with respondent no.3 SBI; however the appellant was unable to pay the entire amount of OTS. 6. It is the contention of the counsel for the appellant that the SARFAESI proceedings are barred by time and though the said plea was taken in reply to Company Application No.3550/2016 as well as by way of CA No.835/2017 w....
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.... money secured by a mortgage or otherwise charged upon immovable property. The proceedings under the SARFAESI Act are not for recovery of money but are more akin to a proceeding for foreclosure of mortgage, limitation for a suit wherefor provided in Article 63 (a) of the Schedule to the Limitation Act is of 30 years commencing from the date when the money secured by the mortgage became due. It thus appears that Article 63(a) and not Article 62 of the Schedule to the Limitation Act would apply. 12. However, it is not deemed apposite to deal further on the said aspect because we have also enquired from the counsel for the appellant, whether not the challenge to the SARFAESI Act proceedings, on the ground of the same being barred by limitation, is required to be made by way of a proceeding under Section 17 of the SARFAESI Act and before the DRT and the jurisdiction of this Court would be barred by Section 34 of the SARFAESI Act. We may in this context notice that the SARFAESI Act came into force only in the year 2002 and going by Article 63(a) of the schedule to the Limitation Act, it cannot be said that the limitation of 30 years, even if counted from 31st December, 1991 has not exp....
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....ecured creditors, in favour of the workmen to the extent of the workman's portion in the security was created. 13. Reference is this regard may be made to A.P. State Financial Corpn. Vs Official Liquidator (2000) 7 SCC 291 holding that though the State Financial Corporations Act, 1951 is a special Act vis-à-vis the Companies Act but since the amendment to Section 529 and incorporation of Section 529A in the Companies Act, 1956 is of the year 1985 and contains a non-obstante clause, it would prevail over the State Financial Corporations Act and the statutory right of the State Financial Corporation to sell the property under Section 29 of the State Financial Corporations Act has to be exercised with the right of pari passu charge to the workmen created by the proviso to Section 529 of the Companies Act and that Section 529A confers upon a Company Court the duty to ensure that the workmen's dues are paid in priority to all other debts. In International Coach Builders Ltd. Vs. Karnataka State Financial Corpn. (2003) 10 SCC 482 it was further held that the Official Liquidator, as the representative of the workmen to enforce such pari passu charge, would have the right of repres....
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....of the controversy from the hearing before the Court, has also referred to Pegasus Assets Reconstruction Pvt. Ltd. Vs. Haryana Concast Ltd. (2016) 4 SCC 47 at paragraph 17, to contend that the sale of the secured assets has to be carried out by the secured creditor and only the workmen dues have to be ensured and which has been done in the impugned order by recording the undertaking of respondent no.2 RIICO Ltd. qua distribution of sale proceeds in accordance with Sections 529 and 529A of the Companies Act. 18. On going through Pegasus Assets Reconstruction Pvt. Ltd. supra we also find the same to be a precedent on the query made by us to the counsel for the appellant. The question for adjudication therein was, "whether a Company Court, directly or through an Official Liquidator, can wield any control in respect of a sale of a secured asset by a secured creditor in exercise of powers available to such creditor under the SARFAESI Act". It was held, (i) that the Recovery of Debts due to Banks & Financial Institutions Act is of 1993 i.e. later to the Companies Act and creates a special machinery for speedy recovery of dues of banks and financial institutions and which by an amendme....