2011 (8) TMI 1388

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....State Financial Corporation (hereinafter referred to as "Corporation" for the case of brevity) under section 442(2)(B) of the Companies Act, 1956 read with Rule 9 of Companies (Court) Rules, 1959 seeking following prayers:- (a)To permit the applicant KSFC to stand outside the winding up proceedings. (b)To issue direction to the 1st and 2nd respondents to pay to the Applicant-Corporation share out of the sale proceeds realized from the sale of the assets of 1st respondent company, in accordance with pari passu amount secured creditors, within reasonable time to be fixed by this Hon'ble Court." 2. This application came to be adjudicated by this Court by order dated 16-12-2004 and direction sought for was not granted. ....

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....sion of the amounts which are in excess of what is legally due to them, the KSIIDC shall repay the said amount with interest to the Offical Liquidator and such amount shall be distributed among the other creditors. (6) This exercise shall be done by the Official Liquidator within a period of 3 months from today as already 8 long years have elapsed." 3. It would be of benefit to extract the observation made by Division Bench in the above matter while disposing of the appeals at paragraph 11 of its judgment: "11. In the contest it is ........................ in the position of a co-mortgagee. Therefore, the State Financial Corporation Act cannot ignore the creditors who intend to enforce their security. It is an establish....