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3. The appellant  Asset Reconstruction Company (India) Limited is a company formed under the Securitisation Act and has been registered under the Companies Act as required under Section  3 of the Securitisation Act and in terms of Section 5 of the said Act, the appellantcompany steps into the shoes of the banks or financial institutions empowered to take possession of the assets of the borrower including the right of transfer by way of lease, assignment, sale and realize the sale proceeds of the secured assets and to take over the management of the business of the borrower. The majority of the creditors have given consent for the appellant-company to formulate the modalities of the sale and also to appoint the appellant as Chairman of the Assets Sale Committee along with the Official Liquidator to dispose of the assets of the company in liquidation. The appellant has moved Company Application Nos.712 and 713 of 2005 before the Company Court seeking to appoint the appellant as agent of the Official Liquidator to complete the modalities of the sale along with the Official Liquidator. By the impugned order, both the applications were rejected by the Company Court holding that once the winding up of the company is ordered the assets and effects of the company shall be deemed to be in the custody of the High Court from the date of the order of winding up. The Official Liquidator on whom the assets rest could only act as per the directions of the Company Court and cannot act independently. In such event when the power to deal with the property is entrusted to the Official Liquidator by the Company Court in its discretion the power of the appellant company by its incorporation for the purpose of reconstruction under the Securitisation Act, cannot override the power of the Official Liquidator under the Companies Act.

6. In order to appreciate the contentions raised at the bar, it would be necessary to note the relevant provisions of the Securitisation Act. It is seen from the preamble of the said Act that it has been enacted with a view to regulate the securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected there to. The Act enables the banks and financial institutions to realize long term assets, manage problems of liquidity to the assets liability, and to improve recovery by exercising powers to take possession of security, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. The Act further enables for setting up of Assets Reconstruction Companies which are empowered to take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realize the secured assets and take over the management of the business of the borrower. The validity of the provisions of the said Act was upheld by the Supreme Court in Mardia Chemicals Limited Vs. Union of India, AIR 2004 SC 2371 except that of sub section 2 of Section 17 which provides deposit of 75% before entertaining an appeal by the DRT under Section 17 of the Act. In Mardia Chemicals (supra) the Supreme Court observed as follows:

(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset;
(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset:
Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: