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CASE NO.: Appeal (civil)  4055 of 1998

PETITIONER: RAJASTHAN FINANCIAL CORPN. & ANR.        

RESPONDENT: THE OFFICIAL LIQUIDATOR & ANR.           

DATE OF JUDGMENT: 05/10/2005

BENCH: S.N. VARIAVA,TARUN CHATTERJEE & P.K. BALASUBRAMANYAN

JUDGMENT: J U D G M E N T  

P.K. BALASUBRAMANYAN, J.

                1.              Appellant No. 1, The Rajasthan Financial Corporation, is a  corporation constituted under Section 3 of The State Financial  Corporations Act, 1951 (hereinafter referred to as "the SFC Act").   Appellant No. 2, the Rajasthan State Industrial Development and  Investment Corporation Limited, is a deemed financial institution by  virtue of exercise of power by the Central Government under Section 46  of the SFC Act.  The appellants are the secured creditors of M/s Vikas  Woolen Mills Ltd. (hereinafter referred to as, "the company-in- liquidation").  By an order dated 14.6.1994, the company judge of the  High Court of Bombay ordered the company-in-liquidation to be wound  up.  The Official Liquidator was directed to take charge of the assets of  the company-in-liquidation.  On 18.4.1995, the Official Liquidator  applied for directions to the company court.  He sought permission to get  the property valued by a valuer from the panel of valuers of the Official  Liquidator, and to sell the properties by public auction.  He sought the  issue of a direction to the appellants, the secured creditors, to advance  Rs. 25,000/- each to the Official Liquidator to meet the expenses for  selling the assets of the company-in-liquidation on condition that the  amounts would be reimbursed to the appellants on priority basis from the  sale proceeds.  The information about the filing of this application was  conveyed by the Official Liquidator to the appellants by communication  dated 21.4.1995.  Apparently, the appellants had no notice of the  proceedings in liquidation and they, as secured creditors, now say that  they want to stand outside the winding up.   In their reply to the Official  Liquidator, the appellants indicated that they proposed to pursue the  remedies available to them under Section 29 of the SFC Act.  The  appellants had obtained a valuation of the properties of the company-in- liquidation and according to the valuers, the value of the assets came to  Rs. 92,56,000/-.  In addition to opposing the report of the Official  Liquidator, the appellants also filed an application praying that as  secured creditors standing outside the winding up, they may be permitted  to realize the securities and apportion the net sale proceeds between  them and the Bank of Baroda, another secured creditor, who was also  entitled to payment pari passu with them.  They undertook to pay over  the dues of the workmen on the same being adjudicated by the Official  Liquidator to the extent of the availability of the funds out of the net sale  proceeds of the properties of the company, in accordance with Section  529-A of the Companies Act.  The company court   rejected the  application of the appellants.  The company court took the view that the  right available under Section 29 of the SFC Act had to be exercised

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consistently with the right of the workmen represented by the Official  Liquidator who was a charge-holder and ranked pari passu with the  secured creditors, even if they stood outside the winding up.  The  company court held that in view of a valuation report already available,  it was not necessary to have a fresh valuation.  The Court permitted the  Rajasthan State Financial Corporation, Appellant No.1, to invite offers  for sale of the properties and directed it to finalize the same in  consultation with the Official Liquidator.  It was directed that the reserve  price would be fixed by the Company Judge on the report of the Official  Liquidator.  The sale proceeds were to be retained by the Official  Liquidator until further orders.  The Official Liquidator, in the  meantime, was to invite the claims of the workmen and was to assess the  extent of the claim of the workmen under Section 529 of the Companies  Act.  Challenging this order, the appellants filed an appeal before the  Division Bench of the High Court of Bombay.  The High Court  dismissed the appeal preferring to follow the earlier decision of that  Court in Maharashtra State Financial Corporation Vs. Official  Liquidator [AIR 1993 Bombay 392].  It is feeling aggrieved by the  dismissal of their appeal by the Division Bench, that the appellants have  filed this appeal by special leave before this Court.   

2.              It has to be noticed that even though the appellants could  have proceeded under Section 29 or under Section 31 of the SFC Act,  neither of the appellants has chosen to actually invoke those provisions  or to approach the concerned District Court under Section 31 of the SFC  Act.  In other words, no proceeding under the SFC Act has been set in  motion by the appellants even now.  In this situation, it is seen  straightaway that Section 32 (10) of the SFC Act has application.  The  said sub-Section reads:-

"32(10).        Where proceedings for liquidation in  respect of an industrial concern have commenced  before an application is made under sub-section (1) of  section 32, nothing in this section shall be construed  as giving to the Financial Corporation any preference  over the other creditors of the industrial concern not  conferred on it by any other law."

On the face of it, it is apparent that no right is acquired by the appellants  or no right has accrued to them or can accrue to them under Section 32  of the Act, unless any such right is conferred on the appellants by any  other law in force.  There is no plea that other than the SFC Act, any  other law confers any additional right on the appellants.   A mere right to  take advantage of an enactment without any act done towards availing of  that right cannot be deemed a right accrued.  [See Abbot Vs. Minister  of Land (1895) AC 425]

3.              On the facts of this case, the position is that proceedings in  liquidation of the debtor company are going on and two secured  creditors who could have had recourse to the SFC Act to proceed against  its assets, but who did not, are standing outside the winding up and are  claiming rights under the SFC Act by approaching the company court.   The rights so claimed have to be considered in the light of Section 529-A  of the Companies Act read with Section 529 of that Act.

4.              When this appeal came up for hearing before two learned  Judges, it was submitted that there was a conflict between the decisions  in Allahabad Bank Versus Canara Bank and Anr. [(2000) 4 SCC  406] and in International Coach Builders Limited Vs. Karnataka  State Financial Corporation [(2003) 10 SCC 482].  The two learned  Judges taking note of this submission and taking note of the importance  of the question of law involved, placed the matter before a larger bench.   That is how the matter has come up before us.

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5.              Learned Senior Counsel appearing for the appellants  submitted that the appellants had special rights under the SFC Act and  since there was no notice to them of the proceedings in liquidation and  they were not parties to the order of winding up, they were entitled to  proceed with the enforcement of their rights under the SFC Act and the  company court was not justified in not permitting the appellants to sell  the securities on their own and in directing them to associate the Official  Liquidator in the matter of sale and in the matter of disbursement of the  proceeds among the creditors.  Learned counsel submitted that  Allahabad Bank Versus Canara Bank and Anr (supra) was an  authority in support of the proposition that the SFC Act would prevail  over the Companies Act, it being general law as against the special law  protecting corporations, like the appellants, namely, the SFC Act.   Learned counsel submitted that the decision in International Coach  Builders Limited Vs. Karnataka State Financial Corporation (supra)  has not adverted to the earlier decision and had not properly understood  the effect of the provisions of the SFC Act.  Section 46B of the SFC Act  gave the provisions of that Act, overriding effect.  The claim of the  appellants that they are entitled to sell the properties independent of the  Official Liquidator, therefore, deserves to be accepted.   Learned counsel  for the Official Liquidator, on the other hand, submitted that on the facts  and in the circumstances of the case, the High Court was justified in  directing the sale to be held under the supervision of the Official  Liquidator and in directing the Official Liquidator to hold the sale  proceeds until further orders from the company court and that the  proceeds have to be distributed only in terms of Section 529-A of the  Companies Act.  Learned counsel further submitted that no interference  was called for with the decision of the High Court.

6.              There is no doubt that the appellants are financial  corporations within the meaning of the SFC Act conferred with the right  to proceed under that Act, to take over the management and possession  of the assets of the debtor, here the company-in-liquidation, or to enforce  their claims by resort to Section 31 of the SFC Act by approaching the  concerned District Court.  The appellants not having invoked the  provisions of the SFC Act, stand only in the shoes of secured creditors  entitled to enforce their security. A liquidation of the company, the  debtor, has intervened and what are the consequences of the order for  winding up is the question to be considered.  Once winding up of a  company is resorted to, Sections 529 and 529-A of the Companies Act  get attracted.  Section 528 provides for debts of all descriptions to be  admitted to proof.  Section 529 makes applicable the rules of insolvency  in the winding up of insolvent companies.  The rules with regard to debts  provable, the valuation of annuities and future and contingent liabilities,  and the respective rights of secured and unsecured creditors; as are in  force for the time being under the law of insolvency with respect to the  estates of persons adjudged insolvent apply.    Section 529(1)(c) of the  Act deals with the rights of creditors.  The same reads :

"529(1)(c).     the respective rights of secured and  unsecured creditors; as are in force for the time being  under the law of insolvency with respect to the estates  of persons adjudged insolvent:

       Provided that the security of every secured  creditor shall be deemed to be subject to a pari passu  charge in favour of the workmen to the extent of the  workmen’s portion therein, and, where a secured  creditor, instead of relinquishing his security and  proving his debt, opts to realize his security, -

(a)     the liquidator shall be entitled to  represent the workmen and enforce such  charge;

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(b)     any amount realized by the liquidator by  way of enforcement of such charge shall  be applied rateably for the discharge of  workmen’s dues; and  

(c)     so much of the debt due to such secured  creditor as could not be realized by him  by virtue of the foregoing provisions of  this proviso or the amount of the  workmen’s portion in his security,  whichever is less, shall rank pari passu  with the workmen’s dues for the  purposes of Section 529A"

7.              The proviso above quoted and Section 529-A of the Act  were inserted by Amendment Act 35 of 1985 with effect from  24.5.1985.  Section 529-A also can be set out conveniently at this stage.   It reads : "529A. Overriding preferential payment. \026  Notwithstanding anything contained in any other  provision of this Act or any other law for the time  being in force, in the winding up of a company \026  

(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) of 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.

A combined reading of Section 529-A and 529 indicates that  notwithstanding anything contained in any other law for the time being  in force or in the Companies Act itself, there is a preferential payment  provided for workmen’s dues and debts due to the secured creditors to  the extent such debts rank under clause (c) of the proviso to Section  529(1) pari passu with such dues.  Therefore, when the assets of the  company are sold and the proceeds realized, the debts by way of  workmen’s dues and that of the secured creditors have to be paid in full  if the assets are sufficient to meet them and if they are not sufficient, in  equal proportions.   

8.              In Karnataka State Financial Corporation Vs. Patil Dyes  and Chemicals (P) Ltd. and ors. [(1991) 70 Comp. Cas. 38], the  Karnataka High Court held that rights under Section 29(1) of the SFC  Act were available to the corporation only when the company is in  charge and control of its assets and not when the company has lost  control over its assets by the intervention of the company court and the  Official Liquidator.  Section 29 of the SFC Act did not justify a  contention that where the creditor is a financial corporation, the assets of  the company-in-liquidation pursuant to the order of the company court  are taken outside the purview of the jurisdiction of the company court.   On a proper construction of Sections 529 and 529A of the Companies  Act, the workmen’s dues and the debts due to the secured creditors to the  extent of clause (c) of sub-Section (1) of Section 529, should be worked  out in the light of the illustration given under Section 529 and that could  be ordered only by the company court   in exercise of his powers under  Section 446(2)(b) and (d) of the Companies Act.  

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9.              In Kerala Financial Corporation Vs. Official Liquidator  and anr. [(1991) 71 Comp. Cas. 324], the Kerala High Court held that  Section 529A of the Act prevailed over Section 29 of the SFC Act in  case of a conflict and since the workmen’s dues which rank pari passu  with the dues of the secured creditors will have to be paid from the  proceeds of the assets of the company including the security given to the  secured creditors, any dispute as to the apportionment of workmen’s  dues and the amount due to the financial corporation and other related  questions could not be left to be decided by the financial corporation.   Therefore, in the best interests of all concerned, the sale of the assets had  to be conducted by the Official Liquidator under the supervision of the  company court.  It may be noted that in that case, the financial  corporation had sought permission of the company court to initiate  proceedings under Section 29 of the SFC Act.   

10.             In Maharashtra State Financial Corporation, Bombay  Vs. The Official Liquidator [AIR 1993 BOMBAY 392], the Bombay  High Court took the view that rights conferred on a financial corporation  as a mortgagee under Section 29 of the SFC Act are not obliterated when  the company is in winding up.  The statutory right under Section 29 to  sell the property, had to be exercised consistently with the rights of a  pari passu chargeholder in whose favour a statutory charge is created by  the proviso to Section 529 of the Companies Act when the company is in  liquidation.  Therefore, such a power can be exercised only with the  concurrence of the Official Liquidator and the Official Liquidator is  required to take the permission of the Court before giving such  concurrence since he is an officer of the Court and is required to act  under the directions of the Court while exercising his powers on behalf  of the workers.  The Court held that there was no inconsistency between  the SFC Act and Section 529 read with Section 529A of the Companies  Act and hence Section 46B of the SFC Act was not attracted.   

11.             In International Coach Builders Ltd. (In Liquidation)  Vs. Karnataka State Financial Corporation [(1994) 81 Comp.Cas.19],  a Division Bench of the Karnataka High Court held that the right of a  secured creditor of a company-in-liquidation, there the Karnataka State  Financial Corporation, to realize its security by taking possession of  properties of the company subjected to security and selling them by  standing outside the winding up, cannot be said even remotely to be  affected by the amendment of Section 529 and the insertion of Section  529-A of the Companies Act, 1956 by Act 35 of 1985.  It was held that  the permission granted to the Karnataka State Financial Corporation, a  secured creditor of the company-in-liquidation, to sell the assets of the  company which constituted security for repayment of loans advanced by  the Corporation to the Company and which the Corporation had already  taken into possession before the winding up was ordered, and the  permission to realize the dues of the Corporation subject to payment of  the workmen’s dues as undertaken by it, by standing outside the winding  up, was well in accordance with the provisions of Section 529, as  amended, and Section 529-A as inserted in the Companies Act, 1956,  and Section 29 and Section 46B of the SFC Act.

12.             In Gujarat State Financial Corporation Vs. Official  Liquidator and ors. [(1996) 87 Comp. Cas. 658], the Gujarat High  Court doubted the correctness of the decision of the Kerala High Court  in Kerala Financial Corporation Vs. Official Liquidator and anr.  (supra) and followed the decision of the Karnataka High Court in  International Coach Builders Ltd. (In Liquidation) Vs. Karnataka  State Financial Corporation (supra).  The Court held that the right of  the secured creditor to deal with his security and realize the same  without intervention of the court, remains unaffected notwithstanding  such vesting, or property coming in the custody of the company court.   To the extent of the charge or mortgage, the property does not come to  the court and is not available for distribution of dividends generally  unless the mortgagee relinquishes it or the surplus, if any, comes to the

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court.  Enforcement of such right remains outside the insolvency  proceedings or winding up proceedings.  It was held that the power of  recovery of loans by State Financial Corporations under Section 29 of  the SFC Act was not in conflict with Section 529A of the Companies  Act, 1956.   

13.             In Industrial Credit and Investment Corporation of  India Ltd. Vs. Srinivas Agencies and ors. [(1996) 4 SCC 165], while  considering the question as to when should a company court   grant leave  to a secured creditor to proceed with his suit against the company after  an order of winding up was made, and on what conditions the permission  should be granted, this Court held that in the case of conflict in power  between the Official Liquidator appointed by the company court and the  Receiver appointed by the Civil Court in a suit filed by the secured  creditor, the interest of the Official Liquidator should have precedence.   The Court observed that the liquidator looks after the interests of a large  segment of creditors along with that of workmen, whereas the Receiver  appointed in a creditor’s suit confines his concern to the interest of the  particular secured creditor at whose instance, the Receiver had been  appointed.   

14.             In Allahabad Bank Vs. Canara Bank & anr. (supra), the  question of jurisdiction of the Debts Recovery Tribunal under the  Recovery of Debts Due to Banks and Financial Institutions Act, 1993,  vis-‘-vis the company court arose for decision.  This Court held that  even where a winding up petition is pending, or a winding up order has  been passed against the debtor Company, the adjudication of liability  and execution of the certificate in respect of debts payable to banks and  financial institutions, are respectively within the exclusive jurisdiction of  the Debts Recovery Tribunal and the Recovery Officer under that Act  and in such a case, the company court’s jurisdiction under Sections 442,  537 and 446 of the Companies Act stood ousted.  Hence, no leave of the  company court was necessary for initiating proceedings under the  Recovery of Debts Act.  Even the priorities among various creditors,  could be decided only by the Debts Recovery Tribunal in accordance  with Section 19(19) of the Recovery of Debts Act read with Section 529- A of the Companies Act and in no other manner.  The Court took into  account the fact that Recovery of Debts Due to Banks and Financial  Institutions Act, 1993 was a legislation subsequent in point of time to the  introduction of Section 529A of the Companies Act by Act 35 of 1985  and it had overriding effect.  But it noticed that by virtue of Section  19(19) of the Recovery of Debts Act, the priorities among various  creditors had to be decided by the Recovery Tribunal only in terms of  Section 529A of the Companies Act and Section 19(19) did not give  priority to all secured creditors.  Hence, it was necessary to identify the  limited class of secured creditors who have priority over all others in  accordance with Section 529-A of the Companies Act.   The Court also  held that the occasion for a claim by a secured creditor against the  realization by other creditors of the debtor under Section 529A read with  proviso (c) to Section 529(1) of the Companies Act could arise before  the Debts Recovery Tribunal only if the concerned creditor had stood  outside the winding up and realized amounts and if it is shown that out  of the amounts privately realized by it, some portion had been rateably  taken away by the liquidator under clauses (a) and (b) of the proviso to  Section 529(1).  The Court has not held that Section 529-A of the  Companies Act will have no application in a case where a proceeding  under the Recovery of Debts Act has been set in motion by a financial  institution.   The Court here was essentially dealing with the jurisdiction  of the Debts Recovery Tribunal in the face of Sections 442, 537 and 466  of the Companies Act.

15.             In A.P. State Financial Corporation Vs. Official  Liquidator [(2000) 7 SCC 291], this Court held that the Company  Judge, while permitting the financial Corporation to stay outside the  liquidation proceedings, rightly imposed conditions to ensure that the

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Corporation would : (i) discharge its liability due to workers under  Section 529-A of the Companies Act, (ii) inform the Official Liquidator  in advance about the proposed sale of properties of the indebted  companies, and (iii) would obtain the Court’s permission before  finalizing the tenders.  This Court specifically overruled the view taken  by the High Court that it was not necessary for the Financial  Corporations to seek permission of the company court to stay outside the  winding-up proceedings.  It was held that Sections 529(1) and 529-A of  the Companies Act had overriding effect and the 1985 amendment being  later in point of time, the non-obstante clause therein would prevail over  the non-obstante clause contained in Section 46B of the SFC Act.

16.             In International Coach Builders Limited Vs. Karnataka  State Financial Corporation [(2003) 10 SCC 482], this Court  considered the correctness of the views expressed by the Karnataka High  Court and the Gujarat High Court. This Court held that a right is  available to a financial corporation under Section 29 of the SFC Act  against a debtor, if a company, only so long as there is no order of  winding up.  When the debtor is a company in winding up, the rights of  financial corporations are affected by the provisions in Sections 529 and  529-A of the Companies Act.  It was also held that the proviso to Section  529 of the Companies Act creates a "pari passu’ charge in favour of the  workmen to the extent of their dues and makes the liquidator the  representative of the workmen to enforce such a charge.  The decision of  the Bombay High Court in Maharashtra State Financial Corpn. Vs.  Ballarpur Industries Ltd. [AIR 1993 Bom 392] was approved.    The  reference to a larger bench was occasioned by the fact that the decision  in Allahabad Bank Versus Canara Bank and Anr (supra) was not  adverted to in this decision.  This decision recognizes that, whether a  creditor is standing outside the winding up or not, the distribution of the  proceeds has to be in terms of Section 529 of the Companies Act read  with Section 529A of that Act in a case where the debtor is a company- in-liquidation.  As far as we can see, there is no conflict on the question  of the applicability of Section 529A read with Section 529 of the  Companies Act to cases where the debtor is a company and is in  liquidation.  The conflict, if any, is in the view that the Debts Recovery  Tribunal could sell the properties of the Company in terms of the  Recovery of Debts Act.  This view was taken in Allahabad Bank  Versus Canara Bank and Anr (supra) in view of Recovery of Debts  Act being a subsequent legislation and being a special law would prevail  over the general law, the Companies Act.  This argument is not available  as far as the SFC Act is concerned, since Section 529A was introduced  by Act 35 of 1985 and the overriding provision therein would prevail  over the SFC Act of 1951 as amended in 1956 and notwithstanding  Section 46B of the SFC Act.  As regards distribution of assets, there is  no conflict.    It seems to us that whether the assets are realized by a  secured creditor even if it be by proceeding under the SFC Act or under  the Recovery of Debts Act, the distribution of the assets could only be in  terms of Section 529A of the Act and by recognizing the right of the  liquidator to calculate the workmen’s dues and collect it for distribution  among them pari passu with the secured creditors.   The Official  Liquidator representing a ranked secured creditor working under the  control of the company court cannot, therefore, be kept out of the  process.   

17.             Thus, on the authorities what emerges is that once a  winding up proceeding has commenced and the liquidator is put in  charge of the assets of the company being wound up, the distribution of  the proceeds of the sale of the assets held at the instance of the financial  institutions coming under the Recovery of Debts Act or of financial  corporations coming under the SFC Act, can only be with the association  of the Official Liquidator and under the supervision of the company  court.  The right of a financial institution or of the Recovery Tribunal or  that of a financial corporation or the Court which has been approached  under Section 31 of the SFC Act to sell the assets may not be taken

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away, but the same stands restricted by the requirement of the Official  Liquidator being associated with it, giving the company court the right to  ensure that the distribution of the assets in terms of Section 529A of the  Companies Act takes place.  In the case on hand, admittedly, the  appellants have not set in motion, any proceeding under the SFC Act.   What we have is only a liquidation proceeding pending and the secured  creditors, the financial corporations approaching the company court for  permission to stand outside the winding up and to sell the properties of  the company-in-liquidation.  The company court has rightly directed that  the sale be held in association with the Official Liquidator representing  the workmen and that the proceeds will be held by the Official  Liquidator until they are distributed in terms of Section 529A of the  Companies Act under its supervision.  The directions thus, made, clearly  are consistent with the provisions of the relevant Acts and the views  expressed by this Court in the decisions referred to above.  In this  situation, we find no reason to interfere with the decision of the High  Court.  We clarify that there is no inconsistency between the decisions in  Allahabad Bank Versus Canara Bank and Anr (supra) and in  International Coach Builders Limited Vs. Karnataka State  Financial Corporation (supra) in respect of the applicability of Sections  529 and 529A of the Companies Act in the matter of distribution among  the creditors.  The right to sell under the SFC Act or under the Recovery  of Debts Act by a creditor coming within those Acts and standing  outside the winding up, is different from the distribution of the proceeds  of the sale of the security and the distribution in a case where the debtor  is a company in the process of being wound up, can only be in terms of  Section 529-A read with Section 529 of the Companies Act.    After all,  the liquidator represents the entire body of creditors and also holds a  right on behalf of the workers to have a distribution pari passu with the  secured creditors and the duty for further distribution of the proceeds on  the basis of the preferences contained in Section 530 of the Companies  Act under the directions of the company court.  In other words, the  distribution of the sale proceeds under the direction of the company  court is his responsibility.   To ensure the proper working out of the  scheme of distribution, it is necessary to associate the Official Liquidator  with the process of sale so that he can ensure, in the light of the  directions of the company court, that a proper price is fetched for the  assets of the company in liquidation.  It was in that context that the rights  of the Official Liquidator were discussed in International Coach  Builders Limited (supra).  The Debt Recovery Tribunal and the District  court entertaining an application under Section 31 of the SFC Act should  issue notice to the liquidator and hear him before ordering a sale, as the  representative of the creditors in general.

18.             In the light of the discussion as above, we think it proper to  sum up the legal position thus:-

i)      A Debt Recovery Tribunal acting under the Recovery  of Debts Due to Banks and Financial Institutions Act,  1993 would be entitled to order the sale and to sell  the properties of the debtor, even if a company-in- liquidation, through its Recovery Officer but only  after notice to the Official Liquidator or the liquidator  appointed by the Company Court and after hearing  him.

ii)     A District Court entertaining an application under  Section 31 of the SFC Act will have the power to  order sale of the assets of a borrower company-in- liquidation, but only after notice to the Official  Liquidator or the liquidator appointed by the  Company Court and after hearing him.

iii)    If a financial corporation acting under Section 29 of

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the SFC Act seeks to sell or otherwise transfer the  assets of a debtor company-in-liquidation, the said  power could be exercised by it only after obtaining  the appropriate permission from the company court  and acting in terms of the directions issued by that  court as regards associating the Official Liquidator  with the sale, the fixing of the upset price or the  reserve price, confirmation of the sale, holding of the  sale proceeds and the distribution thereof among the  creditors in terms of Section 529A and Section 529 of  the Companies Act.

iv)     In a case where proceedings under the Recovery of  Debts Due to Banks and Financial Institutions Act,  1993 or the SFC Act are not set in motion, the  concerned creditor is to approach the company court  for appropriate directions regarding the realization of  its securities consistent with the relevant provisions  of the Companies Act regarding distribution of the  assets of the company-in-liquidation.   

19.             Now reverting back to the case on hand, we find that the  directions issued by the company court are in the interest of all the  creditors and are well within its jurisdiction.  But we find merit in the  submission that the company court was not justified in not ordering a  fresh valuation of the properties.  Having regard to the lapse of time, we  are satisfied that a fresh valuation is necessary.  We direct the company  court to get a fresh valuation done by a valuer from the panel of valuers  of the High Court.  The other directions issued by the company court are  affirmed.   

21.             The appeal is thus disposed of affirming the directions  issued by the company court, but with a modified direction for getting a  fresh valuation of the properties as indicated in the earlier paragraph.       

22.             We make no order as to costs.