2025 (11) TMI 14

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....the present Appeal is whether, once a final winding up order has been passed against a Company and the Official Liquidator has taken charge, the Company Court is required to come to the aid of guarantors so as to shield them from recovery proceedings initiated by creditors. 2. The present Appeal, under Section 483 of the Companies Act, 1956, assails the correctness of order dated 21.12.2023 [hereinafter referred to as the "Impugned Order"] passed by the learned Single Judge in CO.APPL. No. 947/2023 in CO.PET. No. 539/1998, whereby the application filed by the Appellants seeking, inter alia, to restrain Respondent No.3/IDBI Bank from proceeding under its Notice dated 02.12.2023 demanding payment of Rs. 252.53 Crores, came to be dismissed.....

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....mitted that the winding up proceedings had attained finality, with the OL having taken charge, sold all the Company's properties, and distributed the proceeds in accordance with law. It was pointed out that the liability of the guarantors is independent of the Company's liquidation and that proceedings against them could be pursued in appropriate forums. Finally, the Bank submitted that the jurisdiction of the Company Court is limited to winding up the Company, realising its assets, settling admitted claims, and distributing the proceeds, and that it cannot intervene to shield guarantors once the winding up process is complete. 6. The learned Single Judge, vide the Impugned Order dated 21.12.2023 dismissed the Appellants' Company Applica....

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....6 crores in the year 2022]; iv. In view of the above, the Appellants contended that the Bank's notice dated 02.12.2023 demanding Rs. 252.53 crores was premature and oppressive, and that the Company Court ought to restrain recovery proceedings to protect their interests. CONTENTIONS OF THE RESPONDENTS 8. Per contra, learned counsel for the Respondent/IDBI Bank submitted that: i. No valid OTS had been entered into with the Appellants, and the Bank has not agreed to any suspension of the guarantors' liability. ii. The Appellants were never members of the consortium led by Dena Bank, and the Company Court had no role in granting any relief to guarantors. iii. The Company has been under liquidation since....

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....winding up of a company, ensure the realisation of its assets, adjudicate claims of creditors, and oversee the distribution of proceeds. The Company Court is not a forum for shielding guarantors from recovery proceedings once the liquidation process has attained finality. 11. In the present case, the winding up of Respondent No. 1/ Jhalani Tools (India) Ltd. was ordered by this Court on 18.03.2003. A Provisional Liquidator and subsequently an OL were appointed. The Company's six properties have been sold under the supervision of the OL, and proceeds have been distributed to secured creditors and workmen in accordance with Court directions, including the orders dated 25.05.2011 and 13.08.2023. The cut-off date for adjudication of claims w....