- (1.) This is an application filed under section 529, sub-section (2) of the Companies Act, 1956 (for short, "the Act"), by the official liquidator seeking a direction to the respondents, Bank of India, Tirupathi (the bank) and the A.P. Industrial Development Corporation, Hyderabad (APIDC), which are secured creditors of Business Machines (India) Pvt. Ltd., which has been wound up, to pay the salaries of the watch and ward staff including the arrears from 1/02/1992. According to the application, by an order dated 22/04/1988, in Company Petition Nos. 15 and 59 of 1987 this court directed winding up of the company. The bank filed a suit for recovery of the money due to it and also obtained leave of this court to stay outside the winding up proceedings. On the other hand, APIDC has not informed the applicant about the course of action it has adopted or proposes to adopt. Pursuant to the orders of this court in C.A. Nos. 251 and 252 of 1988, the Advocate Commissioner, who had custody of the assets of the company by the date of order of winding up, delivered possession of the assets other than those hypothecated to the bank, to the official liquidator in December, 1989. It is further stated that all the assets of the company are retained in the premises of the company along with the assets that were hypothecated to the bank. The bank accepted to meet the salaries of the watch and ward staff numbering four, appointed to safeguard the assets of the company and, accordingly, it paid salaries at the rate of Rs. 450 per month till the month of January, 1992, and that, thereafter, discontinued the payment on the ground that the official liquidator could not sell the assets of the company and reimburse the amount it had incurred towards the salaries. The affidavit is vague and does not give any particulars regarding the amounts due by the company to the bank and the APIDC, the approximate value of the assets hypothecated to the bank which were redelivered to the official liquidator by the Advocate Commissioner in December, 1989.
(2.) The bank has filed counter saying that it filed suit O.S. No. 156 of 1986 in the Court of the Subordinate Judge, Tirupathi, against the company for recovery of Rs. 29,37,851, that it has obtained leave of this court to remain outside the winding up proceedings to prosecute the suit, that the APIDC has not taken any steps to approach this court for suitable directions with regard to its security, that the bank had a second charge over the block of fixed assets of the company, the first charge being in favour of the APIDC, that the bank had a first charge on the current assets of the company, that on the request of the official liquidator, the bank had agreed to pay the salaries to the watch and ward staff for a temporary period and so far paid an amount of Rs. 1,09,981 and that neither the APIDC nor the official liquidator has done anything for the past three years to dispose of the assets or permitted the bank to sell the current assets hypothecated in favour of the bank.
(3.) The APIDC has filed a counter stating that an amount of Rs. 1,52,87,043 inclusive of interest, is due to it from the company and that under the proviso to section 529, sub-section (2) of the Act, the bank which has proceeded to realise its security is liable to pay the expenses to cover salaries of the staff for preservation of the security.;