AKOLA OIL INDUSTRIES Vs. STATE BANK OF MAHARASHTRA

JUDGEMENT

(1.) The present appeal has been preferred by the company in liquidation through the Official Liquidator, challenging the order dated 4-5-2005 whereby the learned Company Judge refused to recall the oider dated 17-10-2003, which was passed in Application No 142/ 2003 Further relief sought is to quash and set aside the order passed in Review Application No 55/2005 on 13-6-2005 By the impugned order dated 4-5-2005 the learned company Judge refused to recall the order dated 17-10-2003, permitting the secured creditors to proceed under Securitisation act, and in view of that rejected Company application No 97/2004 and 11/2005 The learned Judge further ordered that in view of the finding recorded in the order it was open to the State Bank respondent to proceed to sell the secured asset of 18 acres and 20 gunthas of land as advertised by it after complying with and furnishing undertaking to the Official Liquidator as required by sections 529 and 529-A of the Companies Act It was further made clear that, respondent State Bank of India is not entitled to sell the movables mentioned by it in the advertisement or otherwise under securitisation Act as the same is in the custody of Official Liquidator To that extent partly allowed Company Application No 83/2004 and Company Application No 9/2004 in view of this finding, the Court held that, it was not necessary to pass any orders in company Application No 57/2001 filed by the State Bank of India seeking leave to remain outside the winding up proceeding and the said application was ajso rejected hence, the present appeal as filed by the company through the Official Liquidator

(2.) A few facts may now be set out as under - By order dated 28-11-2000 B I F R recommended winding up of the company. Petition for winding up was presented on 8-6-2001, and it was admitted on 24-8-2001 On 17-9-2001 State Bank respondent filed company Application No 57/2001 to remain outside winding up proceedings and recover the dues by proceeding under the Debts Due To Bank and Financial Institution Act (hereinafter referred to as r D B Act) The respondent bank had filed o A No 474/2001 before Debts Recovery tribunal, Nagpur under the provisions of the Debts Due to Bank And Financial Institution Act The Official Liquidator was not made a party in those proceedings By order dated 18-1-2002 the Hon'ble Delhi High court dismissed the Writ Petition No 4404 / 2001 filed by the company against the order of B I F R On 6-6-2003 the appellant was appointed as Provisional Liquidator with a direction to prepare inventory of property. On 11-6-2003 according to appellant all the property at Akola both movable and immovable which forms the subject-matter was taken in possession in presence of the respondent, and it was locked and sealed, security was deployed, and inventory was prepared. The respondent bank filed an application bearing No. 142/2003 in the company petition without a copy to appellant or other creditors, and without any affidavit of schedule of property seeking permission to proceed against the company under Securitisation And Reconstruction of financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Securitisation Act). It is the case of the appellant that, the learned company judge without hearing any party in the proceedings, allowed the same on 17-10-2003. According to the appellant they filed OLR no. 63/2003 for sale of property. The State bank objected to the same and the objection is still pending. This was filed on 6-11-2003. In the meantime the SLP No. 17406/2002 preferred against the order of Delhi high Court, dismissing the petition against the order of B. I. F. R. was dismissed by the hon'ble Apex Court. On 23-4-2004 the company was finally wound up. It is the case of the appellant that by virtue of winding up all the properties of company including the subject-matter of the present appeal vests with the Hon'ble Company Court. The order was passed after hearing all the parties including the respondent to the proceedings. In the meantime by order dated 4-10-2004, o. A. No. 474/2001 preferred by respondent bank against the company and its guarantors before the Debt Recovery tribunal was allowed. Respondent thereafter issued advertisement on 12-10-2004 for the sale of property. Before that notice under section 13 (2) was issued by the respondent on 8-1-2004 under the Securitisation Act. Notice under section 13 (4) was issued on 22-4-2004. Another advertisement issued on 11-11-2004 was stayed by an order in Company application No. 91/2004. On 13-12-2004 appellant filed Company Application No. 97/2004 for recall the order dated 17-10-2003 which was granted ex parte and by which permission was granted to the respondent to proceed under the Securitisation Act. By an order dated 4-5-2005 in the Application no. 97/2004,83/2004 and 91 /2004 the company Court was pleased to allow the respondent to sell the property. Appellant preferred review Application No. 55/2005 on 9-6-2005 and the same was rejected on 13-6-2005.

(3.) One of the contentions as urged on behalf of appellant is that the property which was put up for sale a substantial part of it has not been mortgaged in favour of the respondent and as such the same could not have been sold under the provisions of securitisation Act. At this stage it may be pointed out that, it is the case of the respondent-Bank that equitable mortgage of 11 acres and 11 gunthas of Survey No. 62 of Mauje Umri, Ward No. 9 Akola was created in favour of the respondent by deposit of title deeds on 4-5-1990. On the credit facility being enhanced, further equitable mortgage for 7 acres 9 gunthas of Survey no. 61 of Mauje Umri, Ward No. 9 at Akola municipal Committee was also created in favour of the respondent bank by way of equitable mortgage by deposit of title deeds on 21-8-1991. It is the contention of the appellant that, the charge in respect of 7 acres 9 gunthas has not been registered with the Registrar of companies as required by law and consequently it is not secured asset. The Original Application No. 474/2001 has been disposed of on 4th October, 2004. Though Akola Oil Industries was a party and though Official Liquidator was appointed on 6-6-2003 as provisional liquidator, the Official Liquidator was not made party to the proceedings before D. R. T. The company was wound up on 23-4-2004. On the company being wound up, the provisional liquidator was made official liquidator consequent to the order of winding up. The Tribunal without the Official Liquidator being appointed to represent the company in liquidation proceeded to dispose of theo A by its order dated 4 10-2004 The learned D R T allowed O A with further direction, permitting the respondent to sell the mortgaged properties As noted earlier, while recording the facts, the learned Tribunal proceeded on the footing that, there are two deeds of mortgages by deposit of title deeds created in favour of respondent which will cover the entire property The first deed is dated 4-5-1990 for 11 acres and 11 gunthas and the second is dated 21-8-1991 for 7 acres 9 gunthas As a matter of fact, it may be pointed out that, till date inspite of having knowledge of the proceedings and the order of D R T the official Liquidator seems not to have moved the debts Recovery Tribunal for recalling its order dated 4-10-2004 on the ground that the order as passed against the company in the absence of Official Liquidator could not have been passed