GOVARDHANDAS VALLABHDAS Vs. OFFICIAL LIQUIDATOR ELECTRO-METAL REFINING COMPANY LIMITED
HIGH COURT OF BOMBAY
OFFICIAL LIQUIDATOR, ELECTRO-METAL REFINING COMPANY LIMITED
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(1.) This appeal was opened to us as depending on the following question of law, viz., whether if a property is seized and attached and an order for sale made, an attaching creditor becomes a secured creditor. But that question is hardly the real point that we have to decide. The papers have been laid before us in a very confused way, and the paper-book omitted to contain a large number of material documents, said Official consequently we have been put to the inconvenience on endeavouring to elucidate the past history of the case by putting questions to counsel and being given extracts from documents or copies of documents at different stages.
(2.) The first matter to consider is, what is the precise application of the appellant creditor before the Court That appears to be contained in an affidavit sworn on September 2, 1928, in which he claims that the applicants are secured creditors and are entitled to payment first in preference to other creditors of the said company. On the appellant s counsel being asked what security his client claims, we elucidated after considerable trouble, that this particular claimant had never attached anything except an engine. Accordingly, before us his claim was reduced to ranking as a secured creditor of the engine. It was further stated at the bar that he would value his security and prove for the balance, but that he was not in a position are present to say what was the value of the security.
(3.) In passing, I may observe that the claim originally put forward was obviously misconceived because, in any event, his right was necessarily to be paid in preference to all other creditors of the company. If he was a secured creditor he could do one of three things. He could either rely on his security and ignore the liquidation proceedings. Or, he could value his security and prove for the balance. Or, he could surrender his security and prove for his whole debt. But his affidavit does nothing of the sort. Further, as regards his claim to be paid in priority to all other creditors this could at the most be out of the proceeds of this particular security. There may be other creditors who also have a security on this particular property. And it appears that in fact another creditor named Mangaldas had levied attachment on a large quantity of the property of the company other than the engine and had obtained an order for sale. He, however, is not before us to-day. Accordingly, the appeal proceeded on the above limited basis of the claimant claiming to be a secured creditor of the engine.;
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