THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Company Application No.791 of 2011 19th September, 2011 Between :- M/s.Pridhvi Asset Reconstruction & Securitization Company Ltd., Rep.by its Vice President Having its Registered & Corporate Office 3rd Floor, Indira Chambers, Door No.8-2-622/5/A/3 Road No.10, Banjara Hills, Hyderabad .. Applicant and M/s.World Wide Pharma Ltd (in Liqn) Rep.by the Official Liquidator, High Court of Andhra Pradesh, Hyderabad .. Respondent THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Company Application No.791 of 2011 ORDER:- This application has been filed by Pridhvi Asset Reconstruction & Securitization Company Ltd., seeking leave of the Court to stay out of the winding up proceedings in dealing with the secured properties. As per order dated 15-7-1999 made in C.P.No.126 of 1998 this Court directed for winding up of M/s.World Wide Pharma Ltd., and appointed the Official Liquidator attached to this Court as its Liquidator. The applicant claims to be the assignee of the amounts due from the Company (in Liqn) under an agreement dated 27-3- 2010. The Company (in Liqn) availed loan of Rs.4,50,00,000/- from the IDBI. IDBI assigned the debt in favour of the applicant under agreement dated 27-3-2010. The applicant filed C.A.No.273 of 2010 seeking its substitution in place of IDBI in all the proceedings connected with C.P.No.126 of 1998. The said application came to be ordered on 13-4-2011. The applicant intends to proceed with the sale of the secured properties of the Company (in Liqn) and therefore it moved the application seeking leave of the Court to stay outside the winding up proceedings of the Company. The Official Liquidator placed on record his report vide OLR No.198 of 2011. The Official Liquidator reported no objection fo9r permitting the applicant to stand outside the winding up proceedings of Company subject to certain terms and conditions. Para 13 of the report reads as hereunder:- “That apart from the above, taking into consideration the interest of the workmen, Official Liquidator also deems it is just and necessary for this Hon’ble Court to direct the applicant to place the valuation report in respect of the assets of the Company before this Hon’ble Court and also to associate the Official Liquidator at each and every stage of the sale proceedings starting from the finalization of the sale notice, terms and conditions of sale etc. Further, it may also be directed that any sale conducted by the applicant pursuant thereto shall be subject to the confirmation of this Hon’ble Court. That apart, it is also pertinent to submit that in every winding up, in terms of Section 451(2) of the Companies Act, 1956 read with Rule 291 of the Companies (Court) Rules, 1959, there shall be paid to the Central Government out of the assets of the Company the fees as determined under the said Rules. Therefore, the leave may also be made subject to the condition that the applicant has to undertake to pay the above fees out of the sale proceeds of the Company in liquidation and also the liquidation expenses if any payable to the Official Liquidator.” Heard the learned Counsel appearing for the applicant and the Official Liquidator representing the respondent Company (in Liqn). Learned Counsel appearing for the applicant submits that the Company (in Liqn) has not even commenced the business and therefore the question of claim from any of the workmen does not arise. A further submission has been made that except the applicant, there are no other secured creditors of the Company (in Liqn). Per contra, the Official Liquidator submits that unless claims are invited as prescribed under Section 529-A, it is not possible to say as on this day that there are no workmen or no secured creditors of the Company (in Liqn). A further submission has been made that in similar circumstances, condition of deposit of part of the sale consideration has been imposed by the Company and the said condition was upheld by the Supreme Court. In support of his submission, reliance has been placed on the Judgment of RAJASTHAN STATE FINANCIAL CORPN. V. OFFICIAL LIQUIDATOR[1]. As on this day, the claims are not invited from the creditors of the Company (in Liqn). Therefore it cannot be said that there are no other secured creditors or no claims from the workmen. In the given circumstances, I deem it appropriate to grant leave to the petitioner to stand outside the winding up proceedings subject to the applicant depositing 1/4th of the sale consideration with the Official Liquidator in order to discharge the debts of workmen in accordance with the provisions of the Companies Act, 1956 and fee payable to the Central Government and liquidation expenses. The applicant has to submit the valuation certificate in respect of the assets of the Company through independent valuer and to place the valuation report before the Court before proceeding for sale. The applicant has to allow the Official Liquidator to associate with it at each and every stage of the sale proceedings starting from the finalization of the sale notice, terms and conditions of sale etc. Any sale held by the applicant shall be subject to the confirmation of this Court. Accordingly, the Company application is ordered. ________________________ B.Seshasayana Reddy, J 19th September, 2011 smr [1] (2005) 8 SCC 190