KARNATAKA STATE INDUSTRIAL INVESTMENT AND DEVELOPMENT CORPORATION LTD. Vs. OFFICIAL LIQUIDATOR OF VIRTUAL DYNAMICS SOFTWARE LTD.

JUDGEMENT

(1.) THIS appeal is preferred by the Karnataka State Industrial Investment and Development Corporation Ltd., (for short hereinafter referred to as 'the Corporation') challenging the order passed by the learned Company Judge dated 08.10.2012 where he rejected both the applications filed by the Corporation.

(2.) THE Corporation is a financial institution within the meaning attached to it under the provisions of the State Financial Corporation Act, 1951. M/s. Virtual Dynamics Software Ltd., (for short hereinafter referred to as 'the Company') was incorporated under the Indian Companies Act, 1956. The company availed financial assistance from the Corporation but failed to maintain the financial discipline and commitment to the Corporation. Exercising their power under Section 29 of the Financial Corporation Act, 1951, the Corporation took possession of the machineries and other movables from the premises of the Company. At the time of taking such possession, a mahazar was drawn of the machineries, which was seized. Subsequently, the owner of the tenanted premises where the company was carrying on its business preferred a petition for winding up of the company on the ground of non -payment of rents. The company petition was allowed. An order winding up of the Company was passed. The Corporation, on a request by the landlord made an application to the Company Court for permission to shift the materials from 2nd floor to 3rd floor of the rented premises so that the vacant possession of the second floor could be given to the owner. After hearing the parties, by an order dated 28.11.2005 the said request was granted. In terms of the said order, yet another mahazar was drawn and all the machineries and materials were shifted from 2nd floor to 3rd floor. Thereafter, the Corporation made an application for permission to sell the seized articles. The permission was granted, wide advertisements were issued and thereafter, M/s. Elvi Enterprises being the highest bidder its bid was accepted. The Corporation filed an application for confirmation of the sale and the Company Court confirmed the sale by its order dated 07.12.2006. After sale of the materials, the Corporation addressed a letter on 06.03.2007 to the Official Liquidator to depute a person so as to be present at the time of delivery of materials to the purchaser and a mahazar was drawn at the time of delivery of materials. After the aforesaid event, the Directors of the Company filed C.A. No. 1828/2007 seeking direction to the Corporation to hand over the records.

(3.) THE material on record discloses before the winding up order and after winding up order there was a theft and the materials in the premises were scattered. The Corporation states they have lodged a police complaint also, whereas, the Directors of the Company dispute the said fact.