OFFICIAL LIQUIDATOR, METALLIC SOAPS & CHEMICALS (PVT ) LTD Vs. MANAGER, KARNATAKA STATE FINANCIAL CORPORATION & ANR

JUDGEMENT

(1.) M/S. Metallic Soaps and Chemicals (Pvt.) Limited, a company incorporated and registered as a private limited company under the Companies Act, 1956 (hereinafter referred to as "Companies Act") went into financial difficulties which resulted in winding up petitions being filed by two creditors - Company Petition No. 90/1987 on 08.10.1997 and Company Petition No. 74/1989 filed on 10.07.1989. The said company had availed of loan facilities from respondent No. 1 - Karnataka State Financial Corporation, a Corporation within the meaning of the State Financial Corporation Act, 1951 (hereinafter referred to as the "SFC Act"). The immovable property and the machinery were mortgaged and hypothecated respectively with respondent No. 1. At the stage when the company petitions were still pending, respondent No. 1 took action under Sec. 29 of the SFC Act on 25.04.1992 to realise its dues. The relevant provisions read as under:

(2.) The winding up order in the company petitions filed in 1987-1989 was made on 13.08.1993. The property taken possession of by respondent No. 1 was sold to respondent No. 2 on 21.02.1994.

(3.) It appears that the proceedings in respect of the company, now represented by the official liquidator as the appellant before us, under the SFC Act continued oblivious of the other proceedings.