- (1.) M/S. Metallic Soaps and Chemicals (Pvt.) Limited, a company incorporated and registered as a private limited company under the Companies Act, 1956 (hereinafter referred to as "Companies Act") went into financial difficulties which resulted in winding up petitions being filed by two creditors - Company Petition No. 90/1987 on 08.10.1997 and Company Petition No. 74/1989 filed on 10.07.1989. The said company had availed of loan facilities from respondent No. 1 - Karnataka State Financial Corporation, a Corporation within the meaning of the State Financial Corporation Act, 1951 (hereinafter referred to as the "SFC Act"). The immovable property and the machinery were mortgaged and hypothecated respectively with respondent No. 1. At the stage when the company petitions were still pending, respondent No. 1 took action under Section 29 of the SFC Act on 25.04.1992 to realise its dues. The relevant provisions read as under: " 29. Rights of Financial Corporation in case of default. - (1) Where any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any installment thereof or in meeting its obligations in relation to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the right to take over the management or possession or both of the industrial concerns, as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation. (5) Where the Financial Corporation has taken any action against an industrial concern under the provisions of sub-section (1), the Financial Corporation shall be deemed to be the owner of such concern, for the purposes of suits by or against the concern, and shall sue and be sued in the name of the concern."
(2.) The winding up order in the company petitions filed in 1987-1989 was made on 13.08.1993. The property taken possession of by respondent No. 1 was sold to respondent No. 2 on 21.02.1994.
(3.) It appears that the proceedings in respect of the company, now represented by the official liquidator as the appellant before us, under the SFC Act continued oblivious of the other proceedings.;