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Judgment
Anand Byrareddy, J.—The present application is filed by the Official Liquidator to contend that M/s. Gadag Forge Fits (India) Private Limited (in liquidation) was ordered to be wound up by an order dated 17.03.1989 in Company Petition No. 116/88 and the Official Liquidator was appointed as the Liquidator of the Company. The company had assets of plant and machinery and ''industrial free hold land with the buildings thereon situated at land in Sy. No. 4/1 Hirekoppa village, Betageri Hobli, Gadag Taluk and District measuring about 2 acres 31 guntas with a built area of 965 sq. mts. Karnataka State Financial Corporation (hereinafter referred to as ''the KSFC'' for brevity), Government of Karnataka Undertaking, had filed C.A. No. 277/1994 seeking delivery of possession of the assets of the company in liquidation and the same was handed over to KSFC on 14.07.1995.
It is the case of the Official Liquidator that the order of winding up of the company in liquidation did recognize KSFC''s right as a secured creditor to stand outside the winding up proceedings for enforcement of the security for realisation of the amounts due from the company. This court had permitted the KSFC to sell the property by standing outside the winding up proceedings by an order dated 3.9.1993.
In Company Application 914/2010, this court by order dated 28.03.2012 had permitted yet another secured creditor, namely, Arcil to stand outside the winding up and to enforce its right under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ''the SURFAESI Act'', for brevity), to sell the assets of the company in liquidation.
In the meanwhile, the Official Liquidator was kept in the dark of the status of the assets of the company in liquidation in spite of letters written over the years from the year 2006 to 2010 and it is only in the year 2012 that the Official Liquidator has been informed of the KSFC having sold the property aforesaid of the company in liquidation for a sum of Rs. 13.50 lakhs.
It is in this background that the present application is filed claiming that the KSFC has breached an express order of this court holding that the KSFC should take the Official Liquidator into confidence in proceeding to bring the properties of the company in liquidation to sale, while standing outside the winding up proceedings. This not having been complied with, the present application is filed to set-aside the sale transaction. Notice having been served on KSFC and the purchaser who has purchased the said properties, this court had called for an independent valuation of the property as on 2010 in order to examine whether there was any irregularity. However, the valuation report now submitted is with respect to the valuation as on 14.08.2013, which is indicated as being 15.96 lakhs, towards converted industrial land, and the buildings at Rs. 1.14 lakh, totaling to Rs. 17.10 lakh. Having regard to the escalation of the prices over time, it cannot be said that the price at which the KSFC had sold the property, is in any manner detrimental to the winding up proceedings of the company in liquidation, or the disposal of the properties belonging to the company in liquidation being in any manner, illegal. Therefore, the lapse on the part of the KSFC in not having the Official Liquidator into confidence has not resulted in any prejudice. Therefore, the application stands disposed of.