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Punjab State Industrial Development Corporation Ltd. & Another v/s Electronics System Punjab Ltd. (in liquidation) & Others

    CP No. 94 of 2004 (O&M) & CA Nos. 103 & 224 of 2015

    Decided On, 07 August 2015

    At, High Court of Punjab and Haryana


    For the Appearing Parties: V.M. Gupta, IPS Doabia, Alok Jain, Vibhor Sharma, Manjit Singh, I.P. Singh, Mohit Garg (Ruchika Gupta), Advocates.

Judgment Text


1. Mr. I.P. Singh, Advocate has filed reply to CA No.103 of 2015 in Court and the same is taken on record.

2. This order of mine shall dispose of CA Nos.103 and 224 of 2015 filed by one of the Secured Creditor i.e. PSIDC as well as Auction Purchaser, respectively.

3. It has been stated that PSIDC in terms of powers envisaged under Section 29 of the State Financial Corporation Act, 1951 (hereinafter to be referred as 'the Act') has taken over the assets of the company (in liquidation) on 11.06.2004.

4. The respondent company was recommended to be wound up by the BIFR and accordingly, the order for winding up of the company was passed on 20.01.2015 in CP No.94 of 2004. It has been submitted that on 11.06.2004, the possession of the properties of the respondent company (in liquidation) had been taken over by the PSIDC.

5. Mr. Vikas Mohan Gupta, learned counsel for PSIDC submits that no dues of any workmen/employee are pending for the reasons that the Government i.e. State of Punjab had offered VRS to the employees and employees who have not opted for VRS were compulsory retrenched under the provision of Section 25-F of the Industrial Disputes Act, 1947 and entire retrenchment compensation amount was paid to such workmen/employees.

6. The process of selling the properties is result of taking over the possession on 11.06.2004, was initiated by the PSIDC by way of public auction. Property situated at Flat No.114/115,1st Floor and Basement-I situated at Aurbindo Place Block-(C)-II, SCO Complex, New Delhi has been sold in favour of Mrs. Ruchika Gupta (respondent No.6) for total consideration ofL16.09 crores, whereas property situated at Plot No.B-81, Industrial Area, Phase-VII, Mohali has been sold in favour of M/s KJP & Associates (applicant in CA No.224 of 2015) for an amount ofL16.05 crores. However, property situated at Plot No.A-28, Industrial Area, Phase-VII, Mohali could not be sold.

7. It has been submitted that valuation of the properties situated at Delhi was fixed asL16.09 Crores and against the said price, the respondent No.6 has depositedL12.30 Crores with the PSIDC and as per the terms/compromise, balance amount has to be paid on the date of execution of the Sale Deed. As regard to the property situated at Mohali, M/s KJP & Associates has already deposited the entire sale consideration forL16.05 Crore and in respect of sale which was confirmed on 24.12.2014, thus, it is prayed that PSIDC may be permitted to hand over the possession of the properties to the respective Auction Purchasers so that sale deed/sale certificate in respect of both the properties be got executed and the balance amount in respect of the property situated at Delhi be also received. Mr. Vibhor Sharma, learned counsel for the Official Liquidator submits that winding up order in CP No.94 of 2004 was passed on 20.01.2015 and, therefore, the sale/auction of the properties of the company (in liquidation), were not in consonance with the provisions of Section 537 of the Companies Act, 1956.

8. He further submits that valuation of the properties situated at Delhi was not fixed at the market value but fixed at the distressed value on 24.03.2014 and 08.08.2014. Therefore, the properties could have fetched more price than the one which has been sold for and, therefore, sale should be canceled.

9. I have heard the learned counsel for the parties.

10. It is now settled that the said Financial Corporation has taken the measures under Section 29 of the State Financial Corporation Act, 1951, & Sections 456 & 537 of the Companies Act, 1956 would not be apply. In essence, the sale conducted by the PSIDC would not be termed as void.

11. In order to lend support of the aforementioned observations, I rely upon judgments rendered inAryavarta Plywood Ltd. v. Rajasthan State Industrial and Investments Corporation Ltd. and another 1991 Company Cases Volume 72 Page 5,State Industrial and Investment Corporation of Maharashtra Ltd. v. Maharashtra State Financial Corporation and another 1988 Company Court Volume 64 Page 102,Pankaj Mehra v. State of Maharashtra 2000(2) SCC 756.

12. In view of ratio descendi culled out in the aforementioned judgments, it leaves no manner of doubt that alienation of the properties of the Company made during the interregnum i.e. between presentation of the petition for winding up and passing of the winding up order, would not be void ab-initio. Thus, the objection raised by the Official Liquidator that since properties had been sold with

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out taking permission of this Court should be declared void, is herein rejected. 13. Accordingly, applications are allowed. PSIDC is directed to hand over the possession of the aforementioned properties to the concerned Auction Purchasers forthwith subject to receipt of the balance sale amount along with interest as per the undertaking given in the letter dated 03.12.2014 (Annexure A-13) of CA No.103/15, in respect of sale of property in favour of respondent No.6. Application allowed.