Kanthi Narahari - (1.)THE present application is filed under regulation 44 of the Company Law Board Regulations, 1991, read with Section 402 of the Companies Act, 1956, seeking order of approval to sell the property of M/s. Karnataka Pressure Vessels Ltd. ("the company") who is the ninth respondent -company in the company petition to the prospective buyers to protect the interests of the secured creditors, i.e., M/s. Karnataka State Financial Corporation ("KSFC") and Canara Bank.
(2.)SHRI P.H. Arvindh Pandian, learned Counsel for the applicant submitted that the company's outstanding dues to its secured creditors, viz., KSFC approximately Rs. 1.5 crores excluding the interest and other charges out of which the company has already paid Rs. 13,42,974 on April 11, 2008, vide DD Nos. 084547 and 084548. Further, the company also owes to the Canara Bank, i.e., thirteenth respondent herein approximately Rs. 90 lakhs excluding the interest and other charges. The company is not able to pay its dues to the secured creditors. While so, in order to settle dues to its secured creditors and company being public limited is governed by the provisions of Section 293(1)(a) of the Act and in order to comply with the provisions of the said section, called for an extraordinary general meeting or June 5, 2008 and passed resolutions enabling the company to sell or otherwise deal with the said property.
The said secured creditors by virtue of being holders of secured debentures/provider of working capital limits respectively have initiated legal proceedings to sell the property and to adjust the sale proceeds against the secured debt. In order to protect the interests of the company and as there is no other alternate except to sell the property of the company to the interested buyers rather than selling the same through an open auction it has been resolved in the extraordinary general meeting held on June 5, 2008, to sell the property of the company and thereby the company would settle the dues of its secured creditors.

(3.)HE further submitted that in the extraordinary general meeting held on June 5, 2008, the total members present are 33 and those voted in favour of the resolution are 29 and those voted against the resolution are 4, as such the resolution was passed with majority for sale or disposal of the whole or part of the land and buildings including plant and machinery whether movable or immovable belonging to the company on such terms and conditions as may be suitable in the best interests of the company. It was also further resolved that Shri P. Ramesh Kumar, chairman be authorised to finalise, settle and execute the documents/deeds/agreements/ papers, etc. Learned Counsel submitted that the petitioners also participated in the said extraordinary general meeting and exercised their rights as shareholders. He also submitted that the affairs of the company are being conducted in a transparent manner and that it is the commercial wisdom of the shareholders as well as their corporate right.