Partly allowed

Official Liquidator of M/S Dharma Sugar Industries (P) Ltd. v. the Manager

Karnataka HC4 Apr 2024CA/30/2022

Case brief

AI extract

What is this about?

Official liquidator sought direction to State Bank of India to sell the company-in-liquidation's mortgaged land. Bank disclosed original title documents were unavailable but consented to assist the sale. Court directed the bank to furnish certified copies within 45 days and to associate with the liquidator in the sale, and ordered an enquiry into officers' failure to disclose the missing originals

What did the court decide?

Bank directed to associate with official liquidator in selling the property, hand over certified copies of documents within 45 days, and zonal manager to enquire into officers' non-disclosure of missi

Official Liquidator of M/S Dharma Sugar… — Insolvency and Bankruptcy | Karnataka HC (2024)

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NC: 2024:KHC:13902 CA No. 30 of 2022 In COP No.52 of 1985

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF APRIL, 2024

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BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ COMPANY APPLICATION NO. 30 OF 2022

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COMPANY PETITION NO. 52 OF 1985

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BETWEEN:

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OFFICIAL LIQUIDATOR OF M/S DHARMA SUGAR INDUSTRIES (P) LTD (IN LIQN) ATTACHED TO HIGH COURT OF KARNATAKA CORPORATE BHAVAN NO.26-27 12^TH FLOOR, RAHEJA TOWERS M G ROAD BENGALURU-560001

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…APPLICANT

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(BY SRI. JAGADEESH GOUD PATIL.,ADVOCATE FOR O.L.)

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AND:

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Digitally signed by NARAYANAPPA LAKSHMAMMA Location: HIGH COURT OF KARNATAKA

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THE MANAGER STATE BANK OF INDIA HANGAL BRANCH DISTRICT HAVERI PIN CODE-581104

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…RESPONDENT

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(BY SRI. DEEPAK.,ADVOCATE)

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THIS COMPANY APPLICATION IS FILED UNDER RULE 6 & 9 OF THE COMPANIES (COURT) RULES 1959 PRAYING TO DIRECT THE STATE BANK OF INDIA, THE SECURED CREDITOR OF THE COMPANY TO TAKE URGENT STEPS TO SELL THE PROPERTY VIZ., LAND MEASURING 5 ACRES AND 8 GUNTAS SITUATED NEAR GIRISINKOPPA TRAVELLERS BUNGLOW, HAVERI-HANGAL ROAD,

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NC: 2024:KHC:13902 CA No. 30 of 2022 In COP No.52 of 1985

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GIRISINKOPPA TQ. HANGAL, DIST. HAVERI, AS PER THE ORDERS DATED 12.08.1988 IN CO.A.261/1987 (ANNEXURE-B) AND REPORT AND ETC.

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

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ORDER

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CA No.30/2022 has been filed seeking for the following reliefs;

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a) To direct the State Bank of India, the secured creditor of the company to take urgent steps to sell the property viz., land measuring 5 acres and 8 guntas situated Near Girisinkoppa Travellers Bunglow, Haveri-Hangal Road, Girisinkoppa, Tq. Hangal, Dist. Haveri, as per the orders dated 12.08.1988 in Co.A 261/19987 (Annexure-B) and report.

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b) To pass such other order or orders as may be deemed fit and proper in the Circumstances of the case.

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The contention of the official liquidator is that Company (in liquidation) - M/s Dharma Sugar Industries Private Limited was ordered to be wound

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up vide order dated 20.6.1986 in COP No.52/1985 is ceased of certain immovable properties which had apparently been mortgaged in

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3 - NC: 2024:KHC:13902 CA No. 30 of 2022 In COP No.52 of 1985

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favour of respondent-State Bank of India, Hangal Brach, Haveri District.

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Despite official liquidator having written several letters from the year 2001 onwards over a period of two decades the respondent-Bank did not take any action to sell the property, recover the monies and make payment of dues to the workers and any other persons who is having pari passu charge. Meetings held with the officials of the Bank also not having evoked any results the aforesaid prayers have been sought for in the present application.

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This Court had directed an inspection of the property and the status report to be filed, which came to so filed by 20.2.2024. This time stating that on inspection of the property it is found that there is certain encroachment, it is for State Bank of India who are in custody of the property to remove the encroachment.

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In that background, when the matter was taken up for hearing that this Court cause an enquiry on

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4 - NC: 2024:KHC:13902 CA No. 30 of 2022 In COP No.52 of 1985

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Sri.Deepak., learned counsel appearing for the State Bank of India, as to why the Bank has not brought the property to sale, when it came to light that the original documents were not available. Hence, he has called to verify again and make his submission. Today, a memo along with a letter dated 3.4.2024 addressed by the Branch Manager, Hangal, has been placed on record.

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A perusal of the said letter would indicate that there are no original documents available with the Bank and perusal of all the records available with the Bank do not disclose deposit of the original title documents nor were the original title documents produced in any of the proceedings filed by the Bank.

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A perusal of the said letter would indicate the reason why the State Bank of India has been on the side line and not taken any steps, it was for the State Bank India, to have initially itself responded to the official liquidator categorially indicating that the original documents were not available, in such circumstances

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5 - NC: 2024:KHC:13902 CA No. 30 of 2022 In COP No.52 of 1985

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the official liquidator could have himself gone ahead with the sale of the property or request for the State Bank of India to do so which was the request made by the official liquidator on several occasions. Even in the present application the prayer sought for is a direction to the State Bank of India, to sell the properties.

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Sri.Deepak., learned counsel submitted that the State Bank of India by itself cannot carry out any sale but would however hasten to submit that the State Bank of India would not have any objection to associate with the official liquidator for bringing about sale of the property.

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Learned counsel for the official liquidator submits that only photocopies of the documents have been furnished though there are no original documents i.e., certified copies would have to be furnished by the Sate Bank of India.

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Having perused the memo filed by Sri.Deepak., on behalf of the State Bank of India on 31.1.2022 it is

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6 - NC: 2024:KHC:13902 CA No. 30 of 2022 In COP No.52 of 1985

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seen that its only photocopies which have been filed. However, details of the documents were available, in that view of the matter when State Bank of India has no objection to associate with the official liquidator for sale of property, the State Bank of India is directed to furnish the certified copies of the documents within 45 days of the receipt of copy of this order. In the event of the State Bank of India not furnishing certified copies the official liquidator is also permitted to engage services of advocate or the like to obtain certified copies of the documents, the cost thereof will be borne from and out of the estate fund to be adjusted after the sale. Hence, I pass the following;

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ORDER

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i. CA No.30/2022 is partly allowed .

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ii. The reliefs sought for are molded and modulated . the State Bank of India is directed to associate with the official liquidator to sell the property of the company (in liquidation) viz., land measuring 5 acers 8 guntas situated near Girishkoppa

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7 - NC: 2024:KHC:13902 CA No. 30 of 2022 In COP No.52 of 1985

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Travellers’ Bunglow, Haveri-Hangal Road, Girisinkoppa, Hangal Taluk, Haveri District.

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iii. The State Bank of India is directed to handover the certified copies of all the documents pertaining to the property within 45 days of receipt of copy of this order, failing which the official liquidator is permitted to secure certified copies at his cost State fund.

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iv. On securing the said certified copies the official liquidator would have to make the necessary application for appointment of the valuer to value the property and inspection, as and when such application is filed necessary order would be passed.

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v. The Zonal manager of State Bank of India is directed to cause an enquiry as to why the officers did not disclose the non-availability of the Original documents causing delay in the sale of the properties, thus resulting in encroachment.

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Sd/JUDGE

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SR List No.: Sl No.:

Official Liquidator of M/S Dharma Sugar Industries (P) Ltd. v. the Manager

Case brief

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Official Liquidator of M/S Dharma Sugar Industries (P) Ltd. v. the Manager

Case brief

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What did the court decide?

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