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Penta Properties And P.V. Mohanan vs Official Liquidator And Anr. on 13 January, 1995 cites

M. K. Ranganathan And Another vs Government Of Madras And Others on 20 April, 1955

17. Learned counsel for the applicant in M.C.A. No. 89 of 1994 contends by referring to a decision of the Supreme Court in M.K. Ranganathan v. Government of Madras, AIR 1955 SC 604 ; [1955] 25 Comp Cas 344 that the bank having opted to stand outside the winding up it can realise its security without the intervention of the court by effecting a sale of the mortgaged premises by private negotiation or by public auction. This contention is based on the premise that the sale held by the execution court is not liable to be set aside. If that be so, the negotiation between the bank and Penta Properties cannot be questioned. It is also pointed out that Penta Properties have agreed to safeguard the interest of the workmen as required under Sections 529 and 529A of the Companies Act. The Supreme Court decision was dealing with a case where a managing director of a company which was under liquidation which stood outside the winding up sold the property by private negotiation without the intervention of the court. But, in the present case, the secured creditor as one remaining outside the winding up, namely, the bank was allowed to file the suit with the permission of the company court. The bank, therefore, cannot enter into negotiation with a private party, when the suit was filed with the permission of the court. Confirmation of sale having been stayed by the company court it cannot enter into such a negotiation without the permission of the court. Moreover, in the reported decision, the sale in question was a private one and was made without the permission of the court. The facts are distinguishable and as such, in my view, the principle laid down in the aforesaid Supreme Court decision would not be applicable to the facts of this case. That decision was rendered before the amendment of Sections 529 and 529A of the Companies Act. Section 529A of the Companies Act lays down as follows ;
Supreme Court of India Cites 10 - Cited by 184 - N H Bhagwati - Full Document
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