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2013 (4) TMI 596 - HC - Companies LawAuction of the property of company in liquidation (Respondent 1) by Karnataka State Financial Corporation (KSFC) (Respondent 2) secured creditor of the company in association with O.L. – appellant was the successful bidder of the property - erstwhile Directors of the Company-in-liquidation called in question the confirmation of sale made by filing an appeal. The said appeal came to be ultimately allowed setting aside the sale in favour of the applicant. With regard to the amount which had been deposited as the auction sale price, the same has been refunded to the applicant - The issue in the instant application is however with regard to the amount which had been incurred by the applicant for taking possession and that was invested for improvement of the said property for its utilisation and also to protect the property. Held that - In that regard, it cannot be in dispute that though the property was sold by the KSFC, the same was in association with the Official Liquidator and when such responsibility is cast on the Official Liquidator also to ensure the sale be conducted in accordance with law and when the Division Bench has found fault with the procedure, there would be joint responsibility. However, in the instant case, the undisputed position is that the dismantled steel structures and other materials which was available in the property due to the work of dismantling carried out by the applicant, which would in a normal circumstance have ensured to the benefit of the applicant has been subsequently sold for by the KSFC. The said amount is available with the KSFC. Further, when the property is re-auctioned, it would fetch a higher value and the liability of the KSFC in any event would be recoverable. The said amount with accrued interest will cover the major portion of the amount which is held as payable to the applicant. The application is allowed in part. The respondents 1 and 2 are held liable to pay the sum of, Rs.29,55,010/- to the applicant.
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