N. MANIKANDAN Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) These appeals have been directed against the order of the learned Judge passed in the Company applications by setting aside the sale effected by the Indian Overseas Bank by exercising its powers under Rule 8(5) of the Security Interest (Enforcement) Rules,2002 (hereinafter referred to as "Rules"). The Company in liquidation has borrowed the amount from the said Bank, in respect of which the assets of the Company as well as some of the machineries were given as security for the repayment to the Bank. As the Bank has enforced its powers under the Rules, inasmuch as the Companies' assets are under the control of the Official Liquidator, the Official Liquidator raised an objection that the prices were not properly fixed by the Bank and no consultation was effected by the Bank. Learned Judge has set aside the sale effected by the Bank in favour of one N. Manikandan, who is the appellant in O.S.A. Nos.206 and 207 of 2012. The said appellant was considered to be the highest bidder and the sale consideration was Rs.2.55 crores along with encumbrance including all statutory liabilities to be paid.

(2.) The above appeals have been filed on the main ground that when the appellant in O.S.A. Nos.206 and 207 of 2012 has undertaken to pay the entire statutory claim and take the property along with encumbrance, the Bank is justified in selling the same and that is also based on the valuation effected by the authorized valuer of the Bank and there is no mala fide intention on the part of the Bank in confirming the sale in favour of the appellant in O.S.A. Nos.206 and 207 of 2012. It is also the case of the Bank that in fact, the Official Liquidator was informed about the sale to be effected and even though there is no concurrence required under SARFAESI Act, the information was made to the Official Liquidator based on the earlier order passed by this Court in Application No.1905 of 2010 etc. in C.P. No.26 of 2005.

(3.) It is the case of the appellant-Bank in O.S.A. Nos.224 and 316 of 2012, as submitted by the learned counsel Mr. Benjamin George that when once the workers' claim is protected as contemplated under Section 529A of the Indian Companies Act as confirmed under Section 13(9) of the SARFAESI Act, it is not open to the Official Liquidator to object to the sale effected so long as the sale is bona fide. The provisions of Section 529A of the Indian Companies Act and Section 13(9) of the SARFAESI Act are as follows:-