IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MRS.JUSTICE S.SUJATHA COMPANY APPLICATION NO.204/2006 C/W COMPANY APPLICATION NO.739/2007 IN COMPANY PETITION NO.26/2003 IN COMPANY APPLICATION NO.204/2006 BETWEEN :
OFFICIAL LIQUIDATOR OF M/S IMPRESSIVE TOUCHWODD LTD (IN LIQN) ATTACHED TO HIGH COURT OF KARNATAKA IV FLOOR, ‘D & F’ WING KENDRIYA SADAN, KORAMANGALA BENGALURU-560034. ...APPLICANT (BY SRI SHRISHAIL NAVALGUND, ADV.) AND :
1. M/S KARNATAKA STATE INDUSTRIAL INVESTMENT & DEVELOPMENT CORPORATION REGD. OFFICE AT NO.49, 4TH FLOOR EAST WING, KHANIJA BHAVAN D, DEVARAJ URS ROAD BENGALURU-560001.
2. M/S KUMAR NIRMAN & NIVESH (P) LTD., REGD. OFFICE AT NO.485/9 14TH CROSS, 4TH PHASE PEENYA INDUSTRIAL AREA BENGALURU-560058.
3. ESKEE STEEL INDUSTRIES NO.27, NEW TIMBER YARD LAYOUT MYSORE ROAD BENGALURU-560026. …RESPONDENTS (BY SRI T.P.VIVEKANANDA, ADV. FOR R1, SRI MADUKAR DESHPANDE, ADV. FOR R2 R3-SERVED) THIS COMPANY APPLICATION IS FILED UNDER SECTION 537(1)(B) OF THE COMPANIES ACT, 1956 READ WITH RULE 9 OF THE COMPANIES (COURT) RULES, 1959, PRAYING TO DECLARE THE SALE TO M/S ESKEE STEEL INDUSTRIES A PARTNERSHIP FIRM WHICH BELONGS TO M/S KUMAR NIRMAN & NIVESH PRIVATE LIMITED AS VOID AND ETC., IN COMPANY APPLICATION No.739/2007 BETWEEN :
M/S KARNATAKA STATE INDUSTRIAL INVESTMENT & DEVELOPMENT CORPORATION REGD. OFFICE AT NO.49, 4TH FLOOR EAST WING, KHANIJA BHAVAN RACE COURSE ROAD BENGALURU-560001 REP. BY ITS MANAGER B.RAJENDRA. ...APPLICANT (BY SRI T.P.VIVEKANANDA, ADV. FOR SRI P.S.MANJUNATH, ADV.) AND :
1. THE OFFICIAL LIQUIDATOR OF M/S IMPRESSIVE TOUCHWOOD LTD (IN LIQN) ATTACHED TO HIGH COURT OF KARNATAKA IV FLOOR, ‘D & F’ WING KENDRIYA SADAN, KORAMANGALA BENGALURU-560034.
2. M/S KUMAR NIRMAN & NIVESH PVT. LTD., REGD. OFFICE AT NO.485/9 14TH CROSS, IVTH PHASE PEENYA INDUSTRIAL AREA BENGALURU-560058. …RESPONDENTS (BY SRI SHRISHAIL NAVALGUND, ADV. FOR R1, SRI MADUKAR DESHPANDE, ADV. FOR R2) THIS COMPANY APPLICATION IS FILED UNDER SECTION 446(2)(B) OF THE COMPANIES ACT, 1956 READ WITH RULE 9 OF THE COMPANIES (COURT) RULES, 1959, PRAYING TO PASS AN ORDER ACCEPTING AND CONFIRMING THE SALE MADE IN FAVOUR OF THE PURCHASERS OF THE LAND AND BUILDING AND ALSO THE LEASED PLANT AND MACHINERY AND ETC., THESE APPLICATIONS COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R These applications involving similar and akin issues, have been considered together and are disposed of by this common order.
2. C.A.No.204/2006 has been filed by the Official Liquidator to declare the sale to M/s Eskee Steel Industries a partnership firm which belongs to M/s Kumar Nirman and Nivesh Private Limited as void and to direct the Karnataka State Industrial Investment and Development Corporation Ltd., (KSIIDC) to hand over the assets of the company to the Official Liquidator.
3. C.A.No.739/2007 is filed by M/s Karnataka State Industrial Investment and Development Corporation Limited seeking for an order of this Court for accepting and confirming the sale made in favour of the purchasers of the land, building and also the leased plant and machinery and permitting the applicants to appropriate the amount released against the debts and liabilities of the respondent company.
4. The undisputed facts are that the winding up proceedings were initiated in Company Petition No.26/2003 by M/s TVS Finance and Services Limited on 06.02.2003. The winding up order of the company M/s. Impressive Touchwood Limited., (in Liquidation) was passed on 05.09.2005. The properties-land, building as well as the plant and machinery of the company (in Liquidation) was taken over by the KSIIDC under the provisions of Section 29 of the State Finance Commission Act and the assets of the company in liquidation were sold during August 2004.
5. In view of the aforesaid, the Official Liquidator has filed C.A.No.204/2006 to declare the sale effected by the KSIIDC during the winding up proceedings as void and to hand over the said assets to the Official Liquidator.
6. In the recent judgment of the Hon’ble Apex Court in the case of Official Liquidator, Metallic Soaps and Chemicals (PVT) Ltd V/s Manager, Karnataka State Financial Corporation and Another reported in LAWS(SC) 2019 2 426 in Civil Appeal 6079 of 2009 decided on 2019 February 06, it has been held that the role of the Official Liquidator and his association with the sale of the assets, where the action is taken under the SFC Act, is to ensure that a proper price is obtained for the assets sold so as to protect the rights of the other secured Creditors.
7. Reference is made to the earlier judgment of the Hon’ble Apex Court in the case of Bakeman Industries Pvt Ltd V/s New Cawnpore Flour Mills reported in (2008)15 SCC 1 wherein, it has been categorically opined that the provisions of Section 29 of the SFC Act, that being a special statute would prevail over the general powers of the company under the Companies Act, 1956.
8. In view of the aforesaid, the sale proceedings of the KSIIDC effected under the provisions of Section 29 of the SFC Act would not render void. Hence, C.A.No.204/2006 stands dismissed.
9. CA.No.739/2007 being filed by the KSIIDC only as a precautionary measure, in view of the judgment of the Hon’ble Apex Court, supra, no further orders are necessary. Hence, CA.No.739/2007 stands disposed of in terms of the order of the Hon’ble Apex Court referred to supra.
ssb SD/- JUDGE