Judgment:
(Prayer: This Company Application is filed by the counsel for the applicant under Rules 6 and 9 of the Company (Court) Rules, 1959 read with order 39 Rule 1 and 2 of CPC, praying to restrain the 2nd respondent from selling the assets of the Company in liquidation by way of private negotiation and direct the 2ndrespondent to call for tenders for sale of assets of the company in liquidation and follow a transparent process.)
1. The applicant, who is one of the unsecured creditors of M/s B.S. Refrigerators Ltd. (hereinafter referred to as to the ‘Company in liquidation’) had instituted the petition in Co.P.No.185/2002) seeking winding up. The said petition along with the connected petitions were considered by this Court and by the order dated 18.08.2010 allowed the petitions and ordered the winding up of the Company in liquidation.
2. The second respondent which is the Asset Reconstruction Company under assignment agreement from the secured creditors viz., State Bank of Mysore, Bank of Baroda and ICICI Bank, has exercised its right under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI’ Act). In that context, the second respondent herein had objected to the passing of the winding up order. But, this Court on holding that the secured creditor’s right to sell the secured asset is not affected, had rejected the objections and proceeded to pass the order of winding up. Subsequent thereto, the second respondent has taken steps for sale of the properties belonging to the Company in liquidation as provided under the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as ‘Enforcement Rules’) and movable assets are already sold. In the said process, the second respondent is contemplating sale of the immovable property by private treaty. The applicant, apprehending that the said process would not fetch the true value, is before this court in this application praying that the second respondent be restrained from selling the assets by private negotiation, instead to follow a transparent process. The concern of the applicant is that if the real value is realised, the other creditors also could be settled.
3. The second respondent apart from justifying the action with regard to the sale of plant and machinery has further asserted the right to sell the property without any fetters. The decision to sell the property by private treaty is sought to be justified by contending that the repeated effort made by them by causing advertisements has not yielded any results and as such the present course is adopted which is also permissible under the Enforcement Rules. Without prejudice to its contentions, the second respondent has conceded that it is willing to once again advertise and call for the highest bidders. The first respondent Official Liquidator has however sought to support the case of the applicant relating to adoption of proper procedure for selling the property belonging to the Company in liquidation by associating the Official Liquidator, it is the case of the first respondent that it has equal right along with the second respondent so as to protect the interest of all the creditors who are entitled.
4. Heard Sri Sriranga, learned counsel for the applicant, Sri K.S. Mahadevan, learned counsel for the first respondent and Sri Udaya Holla, learned senior counsel on behalf of Sri Venkatesh Dodderi, learned counsel for second respondent and perused the materials on record.
5. At the threshold, it is necessary to notice that insofar as the prayer made in the application that the second respondent should be restrained from selling the property by private negotiation and that they should adopt a transparent process, the learned senior counsel on behalf of the respondent would state that in that regard the second respondent has no objection to cause public notice and invite offers. In that view, it would have been sufficient to dispose of the application accordingly. However, contentions have also been urged which would touch upon the right claimed by the secured creditor under the SARFAESI Act as against the right of the Official Liquidator under the Companies Act. Hence, the matter is examined in that perspective to adopt a uniform procedure in such cases.
6. The gist of the argument on behalf of the applicant, supported by the first respondent-Official Liquidator is that the properties relating to the Company in liquidation would vest with the Company Court and the Official Liquidator would be in-charge of such properties. The Official Liquidator is required to protect the interest of all secured creditors, employees and also the other outstandings including unsecured creditors are to be discharged, if sufficient funds are available. Therefore, even if a secured creditor exercises right under the SARFAESI Act, the Official Liquidator should be involved in the process of selling the properties so as to monitor the process by which the maximum benefit to the Company in liquidation is derived. Even though Section 35 of the SARFAESI Act provides for overriding anything inconsistent contained in any other law, the Act vide Section 37 clarifies that what is provided under the SARFAESI Act is in addition to and not in derogation of the Companies Act. Hence, it is contended that when the amount realised is to be distributed on pari passu basis as contained in Section 529 and 529-A of the Companies Act, the Official Liquidator has a role to play and cannot be excluded by the secured creditor acting under the SARFAESI Act.
7. The gist of the contention on behalf of the second respondent is that the secured creditor has exercised its right under Section 13 of the SARFAESI Act and possession of the property was taken in 2008, much prior to the winding up order passed on 18.08.2010. Even while passing the winding up order, the Company Court has declared the right of the secured creditor to exercise its right under SARFAESI Act. Hence, on fats, when inter-se right has already been decided, a similar contention is barred by res-judicata. Even otherwise, the overriding effect under Section 35 of SARFAESI Act is similar to the overriding effect under Section 34 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (‘RDDB Act’ for short) which has been considered by the Hon’ble Supreme Court and the right of the Recoveries Tribunal and Recovery Officer to permit sale even in respect of property of Company in liquidation is upheld. The only requirement is to keep the Official Liquidator notified so that he could secure payment of workmen’s dues as contemplated under Section 529-A of the Companies Act. The said requirement in any event is provided under the proviso to Section 13(9) of SARFAESI Act which would be complied, if there are such dues. Therefore, if Sections 35 and 37 of SARFAESI Act are harmoniously construed, the right of the secured creditor has overriding effect, however, the right of workmen to receive on pari passu basis is protected. Hence, the question of associating the Official Liquidator for sale does not arise. The only requirement is to deposit the workmen’s dues on pari passu basis and nothing more.
8. In order to consider the rival contentions, it would be appropriate to notice Sections 35 and 37 of SARFAESI Act, which read as hereunder:
“35. The provisions of his Act to override other laws.-
The provision of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.
37. Application of other laws not barred.-
The provision of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force.”
9. In that view, it is argued on behalf of the applicant and the Official Liquidator that Section 37 does not bar the application of other laws and by that section it is clarified that the provisions of SARFAESI Act is in addition to the Companies Act and not in derogation of the same. The said section is the later section in the same enactment and should prevail over Section 35 and as such, the provisions of SARFAESI Act cannot override the provisions of the Companies Act. The learned senior counsel for the second respondent, on the other hand relied on the decision of the Division Bench of the High Court of Madras in the case of K. Chidambara Manickam –vs- Shakeena and Others [2009 (152) Comp. Cases 196 Mad] to contend that it has been held therein that Section 35 has overriding effect.
10. A perusal of the above referred decision would indicate that the Division Bench was considering whether the right of redemption available before the execution of sale deed under the Transfer of Property Act could be taken away by the auction conducted as provided under SARFAESI Act. Having noticed the conflict with another law for the time being in force, the Division Bench was of the view that since Section 35 contains a non-obstante clause, it would provide overriding effect. In that facts, what is declared is that only when there is any conflict, the provisions of SARFAESI Act would prevail. Hence, in the instant case, the question is as to whether there is any conflict between the provisions of the Companies Act and the SARFAESI Act, in the situation of payment to the creditors by realising the property of the debtor is in issue, which needs consideration.
11. In that direction, if a debtor company is ordered to be wound up and amount is realised from its assets, Section 529-A of the Companies Act provides for overriding preferential payment as follows:
“529A. (1) Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in winding up of a company-
(a) workmen’s dues; and
(b) debts due to secured creditors to the extent such debts rank under clause (c) of the proviso to sub-section (1) of section 529 pari passu with such dues, shall be paid in priority to all other debts.
(2) The debts payable under clause (a) and clause (b) if sub-section (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions.”
12. However, by enacting the SARFAESI Act and introducing the right for enforcement of security interest under Section 13, right is given to the secured creditor to enforce the security interest without intervention of the Court. Whether that conflicts with the provision existing in the Companies Act is to be examined. Sub-section (1) to (7) of Section 13 provides for the secured creditor to follow the procedure, take possession and bring the property to sale for recovery of the amount due. Sub-section (8) provides the debtor an opportunity to settle the dues before sale is concluded and avoid the sale. However, if that does not happen and the property is to be sold and the realised funds are to be appropriated towards the dues, the procedure contemplated in sub-section (9) to Section 13 reads as hereunder:
“13 (9) In the case of financing of a financial asset by more than one secured creditors or joint financing of a financial asset by secured creditors, no secured creditor shall be entitled to exercising any or all of the rights conferred on him under or pursuant to sub-section (4) unless exercise of such right is agreed upon by the secured creditors representing not less than three-fourth in value of the amount outstanding on a record date and such action shall be binding on all the secured creditors:
Provided that in the case of a company liquidation, the amount realised from the sale of secured assets shall be distributed in accordance with the provisions of section 529A of the Companies Act, 1956 (1 of 1956):
Provided further that in the case of a company being wound up on or after the commencement of this Act, the secured creditor of such company, who opts to realise his security instead of relinquishing his security and proving his debt under proviso to sub-section (1) of section 529 of the Companies Act, 1956 (1 of 1956), may retain the sale proceeds of his secured assets after depositing the workmen’s dues with the liquidator in accordance with the provisions of section 529A of that Act:
Provided also that liquidator referred to in the second proviso shall intimate the secured creditor the workmen’s dues in accordance with the provisions of section 529A of the Companies Act, 1956 (1 of 1956) and in case such workmen’s dues cannot be ascertained, the liquidator shall intimate the estimated amount of workmen’s dues under that section to the secured creditor and in such case the secured creditor may retain the sale proceeds of the secured assets after depositing the amount of such estimate dues with the liquidator:
Provided also that in case the secured creditor deposits the estimated amount of workmen’s dues, such creditor shall be liable to pay the balance of the workmen’s dues or entitled to receive the excess amount, if any, deposited by the secured creditor with the liquidator:
Provided also that the secured creditor shall furnish an undertaking to the liquidator to pay the balance of the workmen’s dues, if any,
Explanation.- For the purposes of this sub-section,-
(a) “record date” means the date agreed upon by the secured creditors representing not less than three-fourth in value of the amount outstanding on such date,
(b) “amount outstanding” shall include principal, interest and any other dues payable by the borrower to the secured creditor in respect of secured asset as per the books of account of the secured creditor.”
13. The relevant provisions under the Companies Act and SARFAESI Act noticed above arose for consideration before the Hon’ble Supreme Court in the case of Central Bank of India –vs- State of Kerala and others [2009 (4) SCC 94], wherein it was observed as hereunder:
“114. By enacting various provisos to sub-section (9) of Section 13, the legislative has ensured that priority given to the claim of workers of a company in liquidation under Section 529-A of the Companies Act, 1956 vis--vis the secured creditors like banks is duly respected. This is the reason why first of the five unnumbered provisos to Section 13(9) lays down that in the case of a company in liquidation, the amount realised from the sale of secured assets shall be distributed in accordance with the provisions of Section 529-A of the Companies Act, 1956. This and other provisos do not create first charge in favour of the worker of a company in liquidation for the first time but merely recognise the existing priority of their claim under the Companies Act. It is interesting to note that the provisos to sub-section (9) of Section 13 do not deal with the companies which fall in the category of borrower but which are not in liquidation or are not being wound up.
115. It is thus clear that provisos referred to above are only part of the distribution mechanism evolved by the legislature and are intended to protect and preserve the right of the workers of a company in liquidation whose assets are subjected to the provisions of the Securitisation Act and are disposed of by secured creditor in accordance with Section 13 thereof.
116. The non obstante clauses contained in Section 34 (1) of the DRT Act and Section 35 of the Securitisation Act give overriding effect to the provisions of those acts only if there is anything inconsistent contained in any other law or instrument having effect by virtue of any other law. In other words, if there is no provision in the other enactments which are inconsistent with the DRT Act or the Securitisation Act, the provisions contained in those Acts cannot override other legislations. Section 38-C of the Bombay Act and Section 26-B of the Kerala Act also contain non obstante clauses and give statutory recognition to the priority of the State’s charge over other debts, which was recognised by Indian High Courts even before 1950. In other words, these sections and similar provisions contained in other State legislations not only create first charge on the property of the dealer or any other person liable to pay sales tax, etc. but also give them overriding effect over other laws.”
14. In the backdrop of the above, in my opinion, insofar as application of the proceeds from the sale of the properties belonging to a Company in liquidation, even though a right has been given to the secured creditor to bring the property to sale without intervention of the Court and enforce the secured asset, there is no conflict between the provisions in the SARFAESI Act as against the one contained in the Companies Act since the manner of distribution on preferential basis is similar in both the Acts. As such, there is no conflict and Section 35 does not come into play. However, the manner in which the right to sell the secured asset is to be exercised by the secured creditor requires further consideration.
15. In that direction, with regard to the options available to the secured creditor, the Hon’ble Supreme Court while considering the right of the Tribunal to order sale under Section 19(19) of the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 (‘RDDB Act’ for short) vis--vis Companies Act, in the case of Andhra Bank –vs- Official Liquidator and Another [(2005) 5 SCC 75] has held that the secured creditors have two options. They may desire to go before the Company Judge or they may stand outside the winding up proceedings. Even if they choose to stand outside the winding up proceedings, the secured creditor would come within the purview of Section 529-A(1)(b) read with proviso (c) to Section 529(1) of the Companies Act. The said position, in my opinion, would hold good even to a situation where the secured creditor chooses to stand outside the winding up proceedings and exercise the right to enforce sale of the secured asset under Section 13 of the SARFAESI Act since sub-section (9) of that section itself will ensure compliance of Section 529-A of the Companies Act as well. Therefore, there can be no ambiguity whatsoever with regard to the position that the secured creditor would be entitled to enforce the security interest even where such property belongs to the Company in liquidation. However, the manner of appropriation of the amount realised would be subject to the proviso to Section 13(9) of SARFAESI Act and Section 529-A of the Companies Act which operate in the same plane except that secured creditor would have the right to sell the property which would otherwise have been the function of the Official Liquidator. But, the Official Liquidator acting under the orders of the Company Court would have a role to play to an extent so as to protect the interest of the persons who would be entitled to the benefits of liquidation.
16. Having arrived at the above conclusion, the issue for consideration is; what is the extent to which the Official Liquidator entitled to participate in the process relating to sale of such property and the appropriation of the proceeds thereof? The learned senior counsel for the secured creditor with reference to Andhra Bank’s case (supra) would contend that the only right of the Official Liquidator is to ensure payment of workmen’s dues on pari passu basis and nothing more. Further, reliance is placed on the decision of the Hon’ble Supreme Court in the case of Rajasthan Financial Corporation and Another –vs- Official Liquidator and Another (AIR 2006 SC 755) to contend that the Official Liquidator is entitled only for notice and hearing before the Debts Recovery Tribunal under the RDDB Act orders for sale and that does not imply right to participate in the process of sale itself in any other manner. According to the learned senior counsel, there is no provision in law to enable such participation of the Official Liquidator. By relying on the decisions of the Hon’ble Supreme Court, in the case of Council for Indian School Certificate Examination –vs- Isha Mittal and another [(2000) 7 SCC 521] and in the case of Maharshi Dayanand University –vs- Surjeet Kaur [(2010) 11 SCC 159] wherein it is held that the High Court should decide the matters in accordance with law, it is contended that in the absence of provision, no right can be granted to the Official Liquidator. Consideration of equity cannot prevail since the Court has no competence to issue direction contrary to law. Though there can be no quarrel with regard to the proposition enunciated in the latter two decisions, the same does not become relevant in the present circumstances. The Hon’ble Supreme Court in Rajasthan Financial Corporation’s case (supra) has held that the Official Liquidator is entitled to notice and hearing. Hence the extent to which it applies or as to whether it is only an empty formality is to be examined since the learned counsel for the Official Liquidator has also relied on the same decision to assert the right of participation granted to the Official Liquidator.
17. The learned counsel for the Official Liquidator has also placed reliance on the decision of the Hon’ble Supreme Court in the case of M/s Bakemans Industries Pvt. Ltd. –vs- M/s New Cawnpore Flour Mills and Others (AIR 2008 SC 2699) to contend that the powers of the Company Court and Official Liquidator has been elaborately discussed and that there is a duty to protect all concerned. The said case arose under a circumstance where the role of Provisional Liquidator was considered, that too in a circumstance where the secured creditor had subjected itself to the jurisdiction of the Company Court. It is not in a similar circumstance, but certain observations made therein that the Court cannot ignore its officer even in a case where the secured creditor stands outside would not doubt be relevant. The decision in the case of International Coach Builders Ltd. (In Liquidation) –vs- Karnataka State Financial Corporation [1994 (81) Comp. Cases 19] relied on by the counsel for the Official Liquidator need not be adverted to in detail since it had fallen for consideration in Rajasthan Financial Corporation’s case (supra), wherein the Hon’ble Supreme Court has considered all aspects and condensed the requirements.
18. Hence, in the circumstance, where the security interest is enforced under the SARFAESI Act without intervention of Court, the procedure for sale would have to be followed as provided under Rule 6 (movable secured assets) and Rules 8 and 9 (immovable secured assets) of the Enforcement Rules. In such proceedings where the sale is conducted as per Rules, the Official Liquidator would be entitled to notice in similar terms as laid down by the Hon’ble Supreme Court in Rajasthan Financial Corporation’s case (supra) while considering the provision of RDDB Act.
19. The learned counsel for the applicant has relied on the decision of the Division Bench of the Punjab and Haryana High Court, in the case of Dhir and Dhir Asset Reconstruction and Securitization Co. Ltd. –vs- Air Liquide North India (P) Ltd And Others [(2009) 152 Comp Case 604 (P and H) (DB)], wherein the condition imposed by the Company Court while permitting sale was upheld by the Division Bench. The decision of the Allahabad High Court in BPL Display Devices Ltd., In re [(2009) 150 Comp Case 280 (All)] wherein conditions were imposed on ARCIL is also relied upon. Further, the decision in the case of Haryana State Industrial and Infrastructure Development Corporation –vs- Haryana Concast Ltd. and Another [(2010) 158 Comp Case 168 (P and H) (DB)] is relied. The said decision is more exhaustive wherein the above cited two decisions are also referred. Hence, it would be appropriate to notice it in detail. In the said case, the Division Bench was considering the validity of the directions issued by the Company Court in Pegasus Asset Reconstruction Pvt. Ltd. –vs- Haryana Concast Ltd. [(2009) 152 Comp Case 215 (P and H)]. The directions issued therein were as hereunder:
“19. If any attempt to harmonise the provisions of the SARFAESI Act and the Companies Act could be made, in the context of orders for sale having already been made by the Company Court and the participation of the assignor of the applicant at several steps for the conduct of sale through the Company Court, it will be inexpedient unyoke the proceeding that were put through the Official Liquidator. While upholding the claim that the procedure laid down under the SARFAESI Act would enable the provisions of the Security Enforcement Rules to be applied for conduct and confirmation of the sale, the dispensation in this case would be
(a) to permit the applicant to stay outside the winding up proceedings and take action to bring to sale the secured assets under Section 13 of the SARFAESI Act read with Rules 8 and 9 of Security Interest Enforcement Rules, 2002.
(b) The applicant-Reconstruction Company shall keep all the steps taken under the SARFAESI Act and the relevant rules transparent and submit all the proposals for sale to the Official Liquidator and the details of valuation obtained for the conduct of sale for the purpose of determining the used price.
(c) Sale shall be advertised with a specific clause that the winding up proceedings are pending before the Company Court, with details of case number and the Court of adjudication.
(d) The expenses already incurred for the conduct of the sale by Official Liquidator shall be deducted from out of the sale proceeds before any appropriation or disbursement and deposited with Official Liquidator.
(e) The Reconstruction Company shall place before the Company Court the details of its claim and all expenses incurred before the Company Court, before making any appropriation to itself and disbursed.
(f) The surplus proceeds over what is lawfully due to it shall be deposited to the credit of the Company (in liquidation) before the Official Liquidator.”
The Division Bench on referring to the decisions of the Hon’ble Supreme Court, more particularly relying on the decision in Rajasthan Financial Corporation’s case (supra) and the other decisions on the subject has affirmed the aforementioned directions issued by the Company Court which in my opinion has to be accepted by me. The said directions being supervisory in character, without fetters, as held by the Division Bench are therefore held to be applicable to the sale of assets by the secured creditors/Assets Reconstruction company in cases where they choose to stand outside winding up proceedings and opt to sell the same in terms of Section 13(9) of the SARFAESI Act read with Rules 6 and 8 of the Enforcement Rules, 2002.
20. On considering the legal position stated above, it is necessary to turn to the facts arising in the case on hand to arrive at the conclusion as to whether the procedure stated above for compliance would be applicable in the instant case also since it is contended that the observations contained in the winding up order would act as res-judicata. In that regard, the learned senior counsel for the secured creditor has relied on the order dated 18.08.2010 passed by the Company Court in Co.P.No.185/2002 ordering the winding up of the Company in liquidation. In the winding up petition, the secured creditor herein had objected to the winding up on the contention that they have invoked the provisions of the SARFAESI Act. The apprehension was that Section 537 of the Companies Act would aid the Official liquidator to step in and prevent the secured creditor from proceeding further. The company Judge keeping in view the decision of the Supreme Court in Allahabad Bank vs. Canara Bank and Another (2000 (4) SCC 406) held as hereunder:
“9. In view of the law declared by the Apex Court in Allahabad’s case provisions of SARFAESI Act overrides Section 537 of the Companies Act. Therefore, objectors being the secured creditors need not seek leave of the Company Court for the sale of assets of the respondent company under the provisions of the SARFAESI Act. Therefore the objections filed by the objectors are hereby rejected.”
21. In view of the above, the learned senior counsel had relied on the decision of the Hon’ble Supreme Court in the case of U.P. State Road Transport Corporation vs. State of U.P. and another [(2005) 1 SCC 444] wherein it is held that the principle of res-judicata is based on the need to give finality to judicial decisions and prevents the same case being twice litigated and that it applies also as between two stages of the same litigation and the parties cannot re-agitate. To the same effect, a decision of this Court in the case of Dattatraya vs. Srinivasa Bhat Thammanna (ILR 1985 kar 1946) is cited. The decision of the Hon’ble Supreme Court in the case of the State of West Bengal Vs. Hemanth Kumar Bhattacharjee and other (AIR 1966 SC 1061) is relied to contend that even a wrong decision by a Court having jurisdiction is as much binding between the parties as a right one and may be superseded only by appeals to higher Tribunals or other procedure like review. It is therefore contended by the learned senior counsel that between the parties herein, the company Court has already held that the secured creditor would be entitled to sell the secured assets and as such, the same issue cannot be decided by this Court.
22. The order of the Company Court extracted above if perused carefully would indicate that the Company Court at that juncture decided that Section 537 of the Companies Act would not be a bar for the secured creditor to sell the property and proceeded to order winding up of the Company in liquidation. The very same question is not in issue at this juncture. The right to sell the secured asset is not being reviewed or re-decided, rather it is being reaffirmed. But, in view of the winding up proceedings, the procedure to be adopted while exercising such right of sale due to the requirement of the provisos to Section 13(9) of the SARFAESI Act and Section 529-A of the Companies Act is in issue. Hence, the said decisions cited not being applicable to the present situation cannot detain this Court.
23. The secured creditor/second respondent herein shall therefore have the right to sell the secured assets in terms of Section 13 of the SARFAESI Act as per the procedure contemplated under Rules 8 and 9 of the Rules, 2002. Though sale by private treaty is also permissible under the said Rules, the same can be resorted to only in appropriate cases where a legal justification is made out to point out that the best price could have been secured by that process. In the instant case, at this stage, whether there is justification for sale by private treaty need not be gone into since the secured creditor/second respondent is not averse to selling it by public auction. The secured creditor/second respondent shall however adhere to the requirements of the supervisory directions which are indicated supra. It is no doubt contended by the secured creditor that there are no dues to employees and workmen. That is an aspect to be considered when the secured creditor seeks leave of this Court to appropriate the amount realised by selling the secured assets as necessary directions could be issued at that stage safeguarding claims in future and the pari passu interest should be protected in that regard.
24. One more aspect to be noticed is that the applicant had sought the present prayer for transparent procedure to be adopted since it is alleged that there were irregularities committed when the movable secured assets were sold. The secured creditor has disputed the said contention and has also produced copies of the documents to establish that proper procedure for valuation and sale was followed relating to plant and machinery. However, the said question need not be considered herein.
25. In the result, I pass the following:
ORDER
i) The second respondent/secured creditor/ARCIL is entitled to sell the secured assets belonging to the Company in liquidation by exercising the right under Section 13 of SARFAESI Act and as per procedure in Rules 8 and 9 of Enforcement Rules subject to the following:
a) They shall however adopt a transparent procedure after notifying the Official Liquidator.
b) The proposal for sale and the details of the valuation obtained for determining the modalities of sale shall be made available to the Official Liquidator.
c) On completion of the sale, the secured Creditor shall place before the company Court, the details of its claim before making appropriation to itself.
d) The appropriation shall be in terms of the order to be passed by the Company Court.
ii) The above Application is disposed of in terms of the above. No costs.