Dismissed

Official Liquidator of v. State Bank of India

Karnataka HC23 Jun 2022CA/174/2021

Case brief

AI extract

What is this about?

This application under Company Act, 1956, Section 446(2), sought directions to the secured creditor (SBI) to sell company property per a previous order. The High Court dismissed the application as unsustainable due to the creditor's objection regarding standing and lack of a crystallized debt, but permitted the liquidator to sell property legally and adjudicate claims later.

What did the court decide?

Application dismissed; Official Liquidator permitted to sell company property in accordance with law and adjudicate creditor claims thereafter.

Official Liquidator of Vs State Bank of India — Insolvency and Bankruptcy | Karnataka HC (2022)

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CA No. 174 of 2021 IN COP.NO.82/1989

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 23^RD DAY OF JUNE, 2022

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BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ

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COMPANY APPLICATION NO. 174 OF 2021

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COMPANY PETITION NO.82 OF 1989

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BETWEEN:

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OFFICIAL LIQUIDATOR OF M/S SALARJUNG SUGAR MILLS LIMITED (IN LIQUIDATION) ATTACHED TO HIGH COURT OF KARNATAKA CORPORATE BHAVAN, RAHEJA TOWERS, 12TH FLOOR, 26-27 M G ROAD BENGALURU-560001

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…APPLICANT

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(BY SRI. K S MAHADEVAN., ADVOCATE)

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AND:

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Digitally signed by POORNIMA SHIVANNA Location: HIGH COURT OF KARNATAKA

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STATE BANK OF INDIA ARMB BRANCH, K G ROAD BRANCH BENGALURU-560009

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…RESPONDENT

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(BY SRI. RAJITHA T O.,ADVOCATE)

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CA No. 174 of 2021 IN COP.NO.82/1989

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THIS CA IS FILED UNDER SECTION 446(2) OF THE COMPANIES ACT, 1956 READ WITH RULE 6 & 9 OF THE COMPANIES (COURT) RULES 1959 PRAYING FOR DIRECTION TO SBI TO TAKE SUITABLE ACTION FOR SALE AS PER THE ORDER DATED 12.08.1999 IN C.A.NO.249/1999.

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THIS CA COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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C.A.No.174/2021 has been filed by the applicant seeking for the following reliefs:

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a) "to direct the Respondent/SBI, to take further action of sale pursuant to this Hon'ble Court order dated 12.08.1999 (in Annexure-'C') and place the sale action taken report before this Hon'ble Court for appropriate orders

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b) to pass necessary orders as may deem fit and proper in the circumstances of the case."

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The contention of the Official Liquidator is that the secured creditor was required to sell the property of the Company in liquidation and report on the same.

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Objections to the said application have been filed stating that the secured creditor is not standing outside the winding up proceedings, i.e. the secured creditor is

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CA No. 174 of 2021 IN COP.NO.82/1989

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standing within the winding up proceedings and furthermore, there is no particular decree in favor of the secured creditor. As such, they are unable to sell the property of the Company in liquidation and they have no objections for the Official Liquidator to sell the property and assets of the Company in liquidation.

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Sri K.S.Mahadevan, learned counsel for the Official Liquidator would however submit that the claim of the secured creditor is not yet crystallized subject to the same being adjudicated at a subsequent point of time, the Official Liquidator is ready to sell the property of the Company in liquidation.

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In view of the submission made by Smt. T.O. Rajitha, learned counsel for the respondent-State Bank of India as also the statement of objections filed by the secured creditor, CA.No.174/2021 does not survive for consideration and as such, stands dismissed.

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The Official Liquidator is permitted to sell the property of the Company in liquidation in accordance with law. Thereafter, adjudicate the claims of the respondent-State

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CA No. 174 of 2021 IN COP.NO.82/1989

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Bank of India and other creditors and claimants as and

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when submitted.

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Sd/JUDGE

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KTY

Official Liquidator of v. State Bank of India

Case brief

What is this about?

What did the court decide?

Official Liquidator of v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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