- (1.) The question which has come up for consideration before this, Court in the present application is whether a receiver can be appointed over the properties of the company on which the secured creditors have first charge when the company is in winding up and the Official Liquidator has already taken possession of the same?
(2.) Brief facts, so far as relevant for the purpose of deciding the present application, are that M/s Sidco Leathers Limited ( in liq.) was ordered to be would up by an under dt. 16- 12- 1993 passed by this Court on the application of the State Bank of India. The Official Liquidator, High Court, hits been appointed the Liquidator. The present applicants namely, (i) The Industrial Credit and Investment Corporation of India; (ii) Industrial Development Bank of India and (iii ) The Industrial Finance Corporation of India (the applicants in short) in pursuance in the request made by the company (in liq.) had advanced to the said company a terra load of Rs. 277 Lacs in consortium between the applicants. The company (in liq.) executed a loan agreement in favour of the applicants in respect of the aforesaid term loan. By a joint deed of hypothecation the company (in liq.) also hypothecated in favour of the applicants the movables (save and except the book debts and the bankers goods ) to secure repayment on account of the aforesaid term loan. The company (in liq.) however, failed and neglected to pity off the loan. Consequently the applications jointly filed a suit for recovery of their dues in the High Court of Judicature at Bombay which was numbered as suit No. 2789 of 1995 I.C.I.C.I. and others v. Sidco Leathers Limited and another. As the company had already come in liquidation by the time the suit was filed an application under S. 446 of the Companies Act, 1956 (Act in short) was filed before this Court. By order dt. 30-8-1995 this Court granted leave to the applicants to continue the proceedings of the said Suit before the Bombay High Court. The present applicant (A-43) dt. 242-96 has been filed on behalf of the applicants before this Court under S. 453 of the Act praying that leave be granted to the applicants to apply any pray for appointment of a receiver over the assets of the company in their aforesaid Suit pending at Bombay. The Official Liquidator has filed a counter-affidavit opposing the prayer made in this application and has submitted that the same was not maintainable and liable to be rejected as the Official Liquidator has already taken possession of the assets of the Company (in liq. ) Consequently the question of appointment of a receiver for the same properties over which the Liquidator is incharge does not arise.
(3.) I have heard Shri Yatindra Singh, learned counsel for the applicants and Shri Krishna Murari, learned counsel appearing for the State Bank of India as well as the Official Liquidator. On behalf of the applicants learned counsel has contended that as the applicants are the secured creditors of the company (in liq.) having first charge over all its movables they have a right to remain outside the winding up proceedings and to file a suit for recovery of their dues and execute the decree by selling the charged properties. For the same they have only to take leave of this Court under S. 537 of the Act which they are entitled to as a matter of course. Therefore, for safeguarding their interest over the secured properties the application under S. 453 of the Act if filed for leave to appoint a receiver, and the same has to be granted as a matter of course. Learned counsel has placed reliance on the decision of the Supreme Court in the case of M. K. Ranganathan v. Government of Madras AIR 1955 SC 604 wherein, it has been held that a secured creditor is outside the winding up and he can realise the security without the intervention of the Court by affecting the sale of the mortgaged properties by private treaty or by public auction. Learned counsel has also placed reliance on the decision of the Karnataka High Court in the case of International Coach Builders Limited (in liq.) v. Karnataka State Financial Corporation (1994) 81 Com Cas 49, wherein, it has been held that right of a secured creditor of a company (in liq.) to realise his security by taking possession of the properties of the company subjected to security and selling them by standing outside the winding up cannot he said even remotely to he affected by the amendment of S. 529 and the insertion of S. 529-A of the Companies Act, 1956 by the Act No. 35 of 1985. So far as these decisions are concerned, they have been considered and reconsidered by various High Courts including this Court. The law which seems to have crystallised is to the effect that by the amendment brought about it S. 529 and. S. 529-A by Act No. 35 of 1985, the Official Liquidator as a representative of the workmen has a pari passu charge of the properties of the company over which a security is created in favour of a creditor even though the said creditor opts to realise its security by standing outside the winding up. The property, therefore, cannot be sold outright ignoring the Official Liquidator of the Court. A Division Bench of Bombay High Court speaking through Justice Sujata Manohar in the case of Maharashtra State Financial Corporation v. Official Liquidator, Bombay High Court, AIR 1993 Bombay 392 has while accepting the aforesaid view has observed that where the dues of the workmen are likely to be very small and where the Official Liquidator has no funds to advertise the sale in these circumstances the leave is to he granted to the secured creditor to sell the said property jointly with the Official Liquidator. It is, therefore, quite clear that the Liquidator is entitled to join the secured creditor to realise the pari passu charge for the workmen dues created on the very security of the secured creditor, Consequently, the submission made by the learned counsel for the applicants that a secured creditor stands outside the winding up and has every right to sell his security and that permission is to he granted to him under S. 537 of the Act as a matter of course cannot be accepted in its entirety,;