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2020 (5) TMI 247 - HC - Companies LawRecovery Proceedings - Winding up petitions filed by a creditor during the time - HELD THAT:- Based on such recovery certificate issued by the Debts Recovery Tribunal, the petitioner bank initiated the proceeding before the Recovery Officer. At this point, a creditor of respondent No.2 had filed a winding up petitions under the provisions of the Companies Act in Company Petition No.8/2010. The said proceeding has resulted in the Company Court passing the winding up order. It is in that light the official liquidator is put in charge of the assets and the affairs of the respondent No.2 Company. In order to protect the interest of the workmen and also the other creditors of the respondent No.2 Company, the Official Liquidator raised certain objections in the recovery proceedings in before the Recovery Officer. In the interregnum the petitioner company having invoked the provisions of SARFAESI Act had brought the secured assets which belonged to the respondent No.2 Company to sale by conducting an e-auction through the notice dated 15.12.2017. The fact that the respondent No.2 Company is in liquidation due to the order passed in the Company Petition No.8/2010 is not in dispute. If that be the position, the provision as contained in Section 529-A of the Companies Act would come into play and the distribution of the amount recovered in the liquidation proceedings will have to be made in the order of preference as provided under the said provision. If that be so, the dues to the workmen and the dues payable to any other secured creditors, if indicated in the records, will have to be taken note by the Company Court and an appropriate order is required to be passed. If that be the position, the entire amount which has been realized by the petitioner and has been appropriated to the loan account cannot be appropriated to the detriment of the other preferential creditors as indicated in Section 529-A of the Act - when the position of law on that aspect is clear and at this juncture since the petitioner has already appropriated the amount, the contention with regard to the petitioner having right to sell the property under the provision of the SARFAESI Act need not be adverted at this juncture. If these aspects are kept in view and if the interest of the preferential creditors of the Company in the liquidation proceedings is protected, the direction issued by the Recovery Officer would not be sustainable at this point - the order passed by the Recovery Officer is set aside - petition disposed off.
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