R.K. Aggarwal v. Official Liquidator & Ors

RAJIV SAHAI ENDLAW, J.

ASHA MENON, J. AUGUST 10, 2020 'gsr'..

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 10th August, 2020 + CO.APP. 10/2020, CM No.18562/2020 (for condonation of delay of 114 days in filing the appeal) & CM No.18564/2020 (for stay) R.K. AGGARWAL ..... Appellant Through: Mr. Mayank Kumar, Adv. Versus OFFICIAL LIQUIDATOR & ORS. ..... Respondents Through: Ms. Ruchi Sindhwani & Ms. Megha Bharara, Advs. for R-1. Mr. Pushpender Aggarwal, Manager (Law) of R-2. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW HON'BLE MS. JUSTICE ASHA MENON [VIA VIDEO CONFERENCING] JUSTICE RAJIV SAHAI ENDLAW CM No.18563/2020 (for exemption) 1. Allowed, subject to just exceptions and as per the extant rules. 2. The application is disposed of. 3. This appeal, under Section 483 of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959, impugns the order dated 13th March, 2020 of the Company Court, allowing Company Application No.3550/2016 of respondent no.2 RIICO Ltd. for direction to the respondent no.1 Official Liquidator (OL) to hand over possession of secured assets of the company in liquidation i.e. Nirmal Steel and Tubes (I) Ltd. to respondent CO.APP.10/2020, CM No.18562/2020 (for condonation of delay of 114 days in filing the appeal) & CM No.18564/2020 (for stay) no.2 RIICO Ltd., in terms of Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002 and to permit respondent no.2 RIICO Ltd. to sell the secured assets by public auction under the provisions of SARFAESI Act and to distribute the sale proceeds in accordance with provisions of Section 529 and 529A of the Companies Act. The challenge to the order is made by the erstwhile Director of the company in liquidation i.e. Nirmal Steel Tubes (I) Ltd. namely Mr. R.K. Aggarwal. 4. The counsel for the respondent no.1 OL, on seeing the matter in the cause list and stating that no advance copy has been delivered and Mr. Pushpender Aggarwal, Manager (Law) of respondent no.2 RIICO Ltd. on advance notice, appear. Though none appears for respondent no.3 State Bank of India (SBI) and respondent no.4 Rajasthan Financial Corporation Ltd. (RFCL), but being prima facie of the opinion that the appeal is not maintainable and that the presence of the respondent no.3 SBI and respondent no.4 RFCL is not relevant for the purpose of the appeal, we have proceeded to hear the counsel for the appellant at length. 5. The counsel for the appellant has contended, that (i) the company in liquidation Nirmal Steel Tubes (I) Ltd., on 31st December, 1991 filed a reference under Section 15 of the Sick Industrial Companies Act, 1985 (SICA) before the Board for Industrial and Financial Reconstruction (BIFR); (ii) the company in liquidation Nirmal Steel Tubes (I) Ltd. had availed of financial facility from respondent no.2 RIICO Ltd., by securing the assets of the company being plant, machinery and premises of the company at A- 353A, RIICO Industrial Area, Bhiwadi District, Alwar, Rajasthan; (iii) since the company in liquidation filed a reference before the BIFR, the account of the company with respondent no.2 RIICO Ltd. is deemed to have become NPA as on 31st December, 1991; (iv) BIFR, vide order dated 23rd May, 1994 recommended the company Nirmal Steel Tubes (I) Ltd. for liquidation and Company Petition No.112/1994 was registered in this Court; (v) vide order dated 11th February, 2002 of the Company Court of this Court, a provisional liquidator was appointed and took over possession of all the assets of the company including the assets aforesaid secured with respondent no.2 RIICO Ltd.; (vi) the Company Court, vide order dated 28th September, 2004, ordered liquidation of the company and appointed the Official Liquidator attached to this Court as the liquidator of the company; (vii) besides respondent no.2 RIICO Ltd., respondent no.3 SBI and respondent no.4 RFCL were also the secured creditors of the company; (viii) respondent no.3 SBI initiated recovery proceedin