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".... Because of the proviso to subsection (1) of Section 529 of the Act, KSIIDC is not only the secured creditor entitled to sell the security by invoking Section 29 of the SFC Act, KSIIDC has to contend with the pari passu charge in favour of the workmen's dues, the workmen being represented by the Official Liquidator. Official Liquidator would thus be an interested party in the sale of security. The proviso to sub-section (1) of Section 529 as also Section 529-A of the Act, having created pari passu charge in favour of the workmen, same would affect the right ofthe appellant KSIIDC to sell the security directly by itself by invoking Section 29 of the SFC Act. The appellant is required to join the Official Liquidator in the sale, and, the property cannot be sold ignoring pari passu charge holder. Similarly, though the Official Liquidator by virtue of Section 457(1) of the Act has the power to sell the property of the company in winding up, and as a pari passu charge holder under Section 529 of the Act, he has the power to sell the said property with the sanction of the Court to realise the charge, he cannot sell the property all by himself ignoring the secured creditors like KSIIDC. Thus both ihe secured creditor namely KSIIDC as also the Official Liquidator as the representative of the workmen, are to exercise the power to sell wider the directions of the Court.....
The power to sell which has been given to KSHDC under Section 29 of the SFC Act has to be exercised consistently with the right ofpari passu charge holder who, in the case of a company under liquidation, would be Official Liquidator, whose consent can be subject to sanction of the Court. Therefore, the statutory right given to the appellant KSIIDC under Section 29 of the SFC Act being required to be exercised consistently with the right of pari passu charge holder in whose favour statutory charge is created by the proviso to sub-section (1) of Section 529 of the Act when the company is in liquidation, and the said pari passu charge holder being Official Liquidator who is required to act under the directions of the Court, leave of the Court would be necessary, and, any sale without such leave would be void under Section 537 of (he Act. Learned Company Judge was therefore, right in declining to approve the sale in favour of respondent No.7 and giving fresh directions for resale of the property by the appellant KSIIDC by standing outside the winding up in association with the Official Liquidator right from the time of settling the terms of advertisement, and making the said resale subject to confirmation by the Court."

23. The other case reported in KSII & D Corpn. Ltd. v. Intermodel Transport Technology Systems, , deals with the sale of assets of the company by the BIFR, under the provisions of Sick Industrial Companies Act and the effect of Sections 529 and 529-A of the Companies Act and therefore may not throw any light in the context of the controversy in this Court.

24. In A.P. State Financial Corporation v. Official Liquidator, , a Division Bench of this Court dealt with the issue whether a learned single Judge exercising jurisdiction under the Companies Act is justified in imposing conditions while granting permission under Section 446 of the Companies Act in favour of the Financial Corporation to stay outside the winding up proceedings. The Division Bench after analysing the various provisions of the Companies Act, State Financial Corporations Act and the relevant case law on the subject, while justifying the imposition of the conditions, held that the right of the State Financial Corporation under Section 29 of the SFC Act '''ceases to be an absolute right the moment it comes on the record of the case that there is a pari passu charge in respect of workmen's dues on the assets and properties of the Company in liquidation" and further held that the insertion of new Section 529-A of the Companies Act "confers upon the Court a duty to ensure that the workmen's dues are paid in priority to all other debts in accordance with the provisions of newly added Section 529-A of the Companies Act and the Court acquires jurisdiction to impose reasonable conditions for this purpose."'