NGEF LTD Vs. CHANDRA DEVELOPERS PVT LTD

JUDGEMENT

(1.) These appeals are directed against a common judgment and order dated 5.1.2004 passed by a Division Be'nch of the karnataka High Court in O. S. A. Nos. 67, 68 and 70 of 2003 whereby and whereunder a judgment and order dated 8.10. 2003 passed by a learned Company Judge in c. A. No. 771 of 2003 was affirmed. Background fact:

(2.) Ngef Ltd. , (for short, 'the company') herein, was a joint venture of the Government of Karnataka, holding 90. 18% shares and EHG Electro-holding GMBH holding 9.72% shares therein. The company became sick, whereupon a reference was made to the Board for Industrial and Financial Reconstruction (for short, 'bifr') in terms of the provisions of the Sick Industrial Companies (Special Provisions) act, 1985 (for short, 'sica'). It is not in dispute that virtually all its assets had been placed either under mortgage and/or offered as collateral security to various financial institutions amongst which the State bank of Mysore was the lead bank.

(3.) It is furthermore not in dispute that from time to time the company with the permission of BIFR and its secured creditors has been selling some of its surplus lands, inter alia, for the purpose of paying wages to the workers and refund of loans to the financial institutions etc. It had sold 29.225 acres of land to the Nuclear Power Corporation for a sum of Rs. 63.65 crores; 1.65 acres of land to CDAC for about Rs. 4.29 cores and 0. 625 acres of land to Indian Oil corporation for Rs. 1.63 crores. All the vendees were public sector undertakings.