Satish Chandra, J. - (1.) These two Special Appeals arise out of the same winding up proceedings.
(2.) U. P. Oil Industries Limited, hereinafter referred to as the Company, was compulsorlly wound up by an order dated 16-8-1956. The appellant is the holder of the second series or debentures created by the Company under a Debenture Trust Deed dated 23-6-1950. This series consisted of twenty debentures of Rs. 5,000/- each, totalling a sum of Rs. 1,00,000/-. The appellant is recorded in the Register of Debenture Holders as the holder of all the twenty debentures of the second series. It is also admitted that the appellant had paid full consideration, that is Rs. 1,00,000/- for these debentures. These debentures created a charge over the fixed and immovable assets of the Company. The properties which were subject to this charge, were practically the only tangible assets available in the winding up for liquidation of the debts due against the Company. During the course of winding up, the learned Company Judge, by an order dated 4-4-1959 which was passed with the consent of the appellant, directed that the assets of the Mill be sold by public auction free from all encumbrances. The order further stated that: "The claim of debenture holders was admitted who consented to the sale being held free of charge provided the amount received by the sale was given to them first"
(3.) The Mills were on 12-4-1962 sold for Rs. 4,18,000/- free of the charge created by the debentures held by the appellant. On 24-5-1962 the appellant made an application to the learned Company Judge praying that the Official Liquidator he directed to pay the amount of the second series of debentures together with interest on execution of an indemnity bond, or in the alternative to deposit the entire amount of the second series of debentures with interest in fixed deposit with a Bank. The application stated that the charged properties having been sold free from encumbrance, the charge attached itself to the sale proceeds In the hands of the Official Liquidator, and that the appellant having valued his security was entitled ID be redeemed. It was also stated that the Official Liquidator in his report dated 29-4-1959 had held that the appellant was not in actual possession of the debentures and as such was not in a position to give an effective discharge.;