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Showing contexts for: handing over possession in M/S.Bharat Heavy Electricals Limited vs M/S.Arunachalam Sugar Mills Limited on 12 April, 2011Matching Fragments
9. C.A.No.1786 of 2005:- The Official Liquidator, who was appointed as the provisional liquidator by order dated 22.7.2005, filed application in C.A.No.1786 of 2005 seeking various directions including direction to IREDA to hand over possession of the properties. By order dated 24.4.2006, the application C.A.No.1786 of 2005 was allowed and IREDA was directed to hand over possession of the properties on or before 28.4.2006 to the Provisional Liquidator. However, the Court directed that the security posted by IREDA in the premises shall continue. In the said order, the Company Court directed the Provisional Liquidator to file a report regarding the valuation of the properties for further steps to be taken. In pursuance of the said order in C.A.No.1786 of 2005, IREDA handed over possession of the assets of ASM to the Official Liquidator on 27.4.2006.
35. After issuing Section 13(2) and Section 13(4) notices, on 5.10.2005, IREDA has taken possession of the secured creditors under SARFAESI Act. The Official Liquidator has sent a notice dated 17.1.2006 to IREDA taking strong objection for taking of possession under SARFAESI Act. In the said notice, the Official Liquidator informed IREDA that "invoking the provisions of Section 13(4) of SARFAESI Act, 2002 and Rules framed thereunder is violative of the provisions of Sections 446, 456 and 537 of the Companies Act". It was reiterated that Section 37 of the SARFAESI Act, 2002 is in addition to and not in derogation of the Companies Act, 1956 and other Acts for the time being in force. On 20.1.2006, IREDA issued public notice for sale of movable assets and immovable properties of ASM. In response to the notice, IREDA has also received a bid for Rs.135.50 Crores. In these circumstances, after the judgment of the first Bench of this Court in Asset Reconstruction Company (I) Ltd. Vs. The Official Liquidator, High Court, Madras, (2006(3) CTC 529), Official Liquidator filed C.A.No.1786 of 2005. By the order dated 24.4.2006, Chitra Venkataraman,J. directed IREDA to hand over possession of the properties to the Official Liquidator. It was further ordered that the security appointed by IREDA shall continue as before. In pursuance to the order of the Court, IREDA has handed over possession to the Official Liquidator. Stating that IREDA continues to exercise its rights under SARFAESI Act of assets of both ASM as well as the machinery of NHSM installed/erected at the factory premises of ASM, IREDA filed the applications A.Nos.1038 and 1039 of 2006 to proceed further with the fresh advertisement for sale of movable and immovable assets of ASM by fixing the upset price of Rs.135.50 Crores and in case no fresh bid is received, to confirm the sale in favour of existing bidder for Rs.135.50 Crores.
60. Points No.4 to 6:- As pointed out earlier, since ASM and NHSM committed default in the payment of dues to IREDA, IREDA classified the accounts of ASM and NHSM as Non-Performing Assets and filed O.A.Nos.113 and 114 of 2004 before DRT-I, New Delhi for recovery of Rs.62.83 Crores and Rs.9.17 Crores respectively. IREDA also filed O.A.No.112 of 2004 against NHSM for recovery of Rs.20.03 Crores. After obtaining necessary permission from DRT, IREDA proceeded under SARFAESI Act. On 27.9.2005, IREDA has entered into MOU with Sundaram Finance Limited to effectively sell the respective assets to get better price in the interest of all creditors. On 28.9.2005, the Official Liquidator has held meeting of all secured creditors. After issuing notices under Section 13(2) and 13(4) of SARFAESI Act, IREDA has taken possession of the assets of ASM along with the machineries of NHSM on 5.10.2005. In pursuance of the direction of the Court in C.A.No.1786 of 2005, IREDA handed over possession of assets to the Official Liquidator on 27.4.2006. The Order in C.A.No.1786 of 2005 directing IREDA to hand over possession reads as under:-
66. The fact that there was no voluntary handing over of possession is well established by the various documents and materials. In the meeting of all the secured creditors held on 28.9.2005, IREDA, as the major secured creditor, who is having first charge over the entire assets of ASM, has volunteered to bear the whole expenses of appointing security. IREDA has obtained leave before DRT, Delhi to proceed under SARFAESI Act to exercise its rights as secured creditor. On 6.10.2005, IREDA addressed a letter to the Official Liquidator giving details of inventories and Panchanama pointing out that the minutes of meeting was signed without prejudice to IREDA's rights. In its reply to the Official Liquidator dated 6.1.2006, IREDA has replied hat it has no intention to defy the orders of the Court and that IREDA has undertaken to distribute the dues to the workers under Section 529-A of the Companies Act read with Section 13(9) of the SARFAESI Act. It is thus clear that possession was handed over to the Official Liquidator by the Order of the Court. It is explicit that there is no relinquishment of security and IREDA stands outside the winding up proceedings, however subject to Section 529-A(1)(b) read with proviso (c) appended to Section 529(1) and there is no surrender of its rights as a secured creditor. In fact, in its application C.A.No.1038 of 2006, IREDA has clearly stated that they continue to exercise their rights under the SARFAESI Act in respect of the assets of ASM and the machineries of NHSM installed/erected at the factory premises of ASM. There is no force in the contention of the appellants that IREDA's handing over of possession of the property amounted to voluntary surrender of security.