Quadri, J. - (1.) This appeal, by Special leave, is directed against the order of the Division Bench of Kerala High Court in M.C.A. No. 11 of 1983 passed on January 29, 1986. That was an application filed before the learned single Judge of the High Court of Kerala (hereinafter referred to as 'the Company Court') by the Official Liquidator against the Indian Bank and respondents Nos. 2 to 5 herein under Section 446(2) and Section 460(4) read with Section 125 of the Companies Act, 1956 (for short 'the Act') and Rule 9 of the Companies (Court) Rules, 1959 praying for a declaration that the charge created by the company in liquidation in favour of the Indian Bank against the land and buildings of the company, being plaint schedule properties in O.S. 169/80 before the Principal Sub-Court, Cochin, was void and a further declaration that the preliminary decree passed in the said suit to the extent that it created three charge on the assets of the company was contrary to the provisions of Section 125 of the Act and as such void and unenforceable against the Official Liquidator representing the General body of creditors excluding the decree holder.
(2.) It will be necessary to notice the facts giving rise to this appeal for a proper appreciation of the questions raised before us. The Indian Bank advanced certain amounts to M/s. Chemmeens Exports Pvt. Ltd. which was secured by an equitable mortgage by deposit of title deeds of the debtor company with the Bank. Thereafter, winding up proceedings were initiated against the debtor-company and on March 1, 1979 and winding up order was passed in Company Petition No. 18 of 1978. The bank sought leave of the Company Court to file a suit for recovery of the debt amount in a sum of Rs. 29,50,609.58 due to it. The permission having been granted by the Company Court on 7-12-79, the Indian Bank filed the said suit, O.S. No. 169/80 in the Subordinate Judge's Court, Cochin, against the debtor-company in liquidation which was represented by the Official Liquidator, duly impleading the Directors of the Company. The Official Liquidator filed written statement and contested the suit taking, inter alia, the plea that the charge against the properties of the company not having been registered under Section 125 of the Act, was void. On 28-5-82, in the said suit the Court passed a preliminary decree in favour of the Bank. No appeal was filed by the Official Liquidator against the said decree.
(3.) However, on March 21, 1983, the Official Liquidator filed an application being C.M.A. No. 11 of 1983 before the Company Court for the reliefs indicated above. The bank resisted the application on the ground that the decree passed by the Court had become final and operates as res judicata. The learned Company Judge referred the case to a Division Bench expressing the view that the question was not free from doubt. By the impugned order of January 29, 1986, the Division Bench held that the preliminary decree passed in the suit did not operate as res judicata; that on account of non-registration of the charge it was void under Section 125 of the Act and that plea could be raised by the Official Liquidator as such as also on behalf of the body of the creditors in the application and also declared that the preliminary decree passed on the basis of the charge created by the company in favour of the bank against the land, buildings and machinery of the company, and set out in the preliminary decree, was void against the Official Liquidator and the creditors of the company and that the same was not enforceable against the assets of the company.;