Permod Kohli, J. - (1.) THE present application has been presented by the Haryana Financial Corporation for setting aside the attachment and sale of the land measuring 14 kanals and 4 marlas comprising khewat No. 94/92, khatoni No. 106, khasra No. 22, rec. No. 2 and killa Nos. 18 and 23 at village Bibipur, tehsil and district, Jind, made on October 8, 2002, by invoking the jurisdiction of this Court under Section 446 read with Section 441 of the Companies Act, 1956.
(2.) BRIEFLY stated the facts leading to the filing of present petition are that respondent No. 1 -company, namely, M/s. Dev Papers P. Ltd. (in liquidation) secured a loan of Rs. 30 lakhs from the applicant for setting up of an industry. The company executed a mortgage deed dated July 23, 1986, mortgaging its land, building, plant and machinery of the unit in favour of the applicant -Corporation. The total mortgage land was measuring 55 kanals 2 marlas comprising khewat No. 65, khatoni No. 70, killa Nos. 6/3 -11, 14/5 -7, 15/8 -0, 16/8 -0, 17/8 -0, 18/6 -16, 23/7 -8, 24/8 -0 (6.88 acres, i.e., 2755 sq. mtrs) at village Bibipur, tehsil and district, Jind. The mortgage land also include khewat No. 94/92, khatoni No. 106, khasra No. 22. On failure of the company to repay the loan, the Corporation recalled the loan. It is stated that besides the Haryana Financial Corporation, the company had also secured loan from HSIDC amounting to Rs. 76 lakhs and pan passu charge was made on the assets of the company in favour of the applicant as well as HSIDC. The company filed a reference before the BIFR under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The Board for Industrial and Financial Reconstruction (BIFR) vide its order dated March 8, 1994, declared the company as a sick company. Since the company could not have been rehabilitated in those proceedings, the BIFR vide its order dated May 15, 1999, recommended the winding up of the company to this Court being the competent court. On receipt of the reference, the company judge vide its order dated April 6, 2000, issued notice to the company for May 11, 2000. The applicant -Corporation filed a Company Application No. 120 of 2000 for keeping the Corporation outside the winding up and for permission to sell the property of the company under Section 29 of the State Financial Corporations Act. During the pendency of the winding up proceedings, Corporation was permitted to sell the assets of the company vide order dated May 24, 2006, by associating with the official liquidator and other secured creditors but the sale could only be confirmed under the orders of this Court.
(3.) IN the year 1999, respondent No. 4 filed a Suit No. 112 of 1999 against the company in the Court of the Civil Judge (Senior Division), Panvel, for recovery of an amount of Rs. 1,34,628. The suit was decreed ex parte by the said court vide its judgment and decree dated November 30, 2000. Respondent No. 4 filed an Execution Application No. 28 of September 19, 2001, for execution of the ex parte decree. In the execution of the aforesaid decree, land comprising khewat No. 94/92, khatoni No. 106, khasra No. 22 situated in village Bibipur, tehsil and district, Jind, was attached and thereafter land of rec. No. 22, killa Nos. 18 and 23, measuring 14 kanals 4 marlas was sold in favour of respondent No. 5 for a sum of Rs. 2,60,000 on October 8, 2002, to satisfy the decree. The applicant -Corporation filed the application for setting aside the sale in favour of respondent No. 5 before the civil judge which was still pending at the time of filing of the present application. The applicant has accordingly filed the present application invoking the jurisdiction of this Court under Section 446 read with Section 441(2) of the Companies Act, 1956, for setting aside the sale having been made in respect of the property of the company in liquidation during the pendency of the winding up proceedings. It is stated that though the company was ordered to be wound up on July 24, 2003, however, by virtue of Section 441(2), the winding up proceedings shall be deemed to commence at the time of presentation of the petition. It is stated in the present case that recommendation for winding up of the company were made by the BIFR on May 15, 1999 and notice was issued to the company vide order dated April 6, 2000 and thus, the date of the recommendation or at least the date when notice were issued should be deemed to be the commencement of the winding up proceedings. It is accordingly argued that the proceedings before the civil court could not have continued beyond April 6, 2000, nor decree could have been executed without the leave of this Court under Section 446. It is further contended that the decree having been passed and executed during the pendency of the winding up proceedings without the leave of the court is liable to be set aside. This application is, however, resisted by the contesting respondent No. 5 who is the purchaser of the land in execution of the sale made by the civil court on the following amongst other grounds: (i) order of the civil court is not a void but only voidable at the application of the official liquidator as is the requirement of Section 446 and in the present case, the official liquidator has not filed any such application challenging the sale. (ii) no order of winding up had been passed at the time of passing of the decree dated November 30, 2000. It is stated that winding up order was passed on July 24, 2003, much after the passing of decree when the proceedings stood concluded and even the decree was executed and satisfied by sale of the land on October 8, 2002, i.e., prior to the passing of winding up order and hence, the provisions of Section 446 are not attracted in the present case. (iii) Section 441(2) will not apply in the present case as the order of winding up cannot be deemed to have commenced on the date of issuance of notice but only when the court formulates an opinion that the circumstances under Section 424G exist.;